R&D in Tight Times: How Research and Development Fares among Pinched Consumables Suppliers
Rosenberg, Jim, Editor & Publisher
IN A TIGHTER AND LIGHTER market, how much research and development can newspapers expect from consumables suppliers?
As raw material costs continue to climb and newspaper demand declines, R&D interest and investment among ink and plate suppliers have by no means disappeared. But most report a focus on process improvement as much as or more than product development.
They have to. They're tracking their customers. For while new or better products are likely to eventually see demand, for now, seller and buyer are just trying to contain costs and stay in business. Those new or better products can expect a place among special wraps or covers, premium and niche products. But conventional products available to print most dailies or weeklies can do the job.
Of course, necessity does drive invention--for example, the reasons behind the early push for newspaper flexo, as one executive recalls, citing concerns over the availability and cost of the naphthenic oils used in offset litho news inks. But that was more than 25 years ago. Though concern over a major raw material's supply and cost was as real then as it is now, circulation declines were slow and small, and newspapers were adding Sunday editions and new sections. So demand, too, was a powerful incentive for the inventive.
But that's all changed in this new century for newspapers, when they and suppliers can expect to see print production either outsourced or transformed into a business all its own.
The very nature of newspapers' business required fast presses to print a lot of copies in a little time. But as one consultant observes of big iron that's too often run for only a few hours a day: "We really have the worst capital profile of any industry."
How, and how fast, that will change surely figures into every supplier's strategy--just as surely as any new model for the newspaper business will benefit from R&D that can deliver further efficiencies in current practices and new technologies to replace them.
But while newspapers cast about for operations-side support for whatever new model evolves, it's worth remembering that beyond false starts and blind alleys, even winning ideas have their time--being dependent on interrelated technologies and changing market realities. After all, following attempts with earlier computer-to-plate output systems, when CTP finally was shown to be a practical prospect in the early 1990s, it was another decade before costs, speed, service life, laser/plate choice and mechanical automation options made it a practical industry-wide reality.
Prospects for News Ink
MANUFACTURERS ARE FACED WITH MAINTAINING QUALITY WHILE CONTAINING COSTS
"There's really no pressure on the ink companies right now except to give the lowest prices," says consultant and production veteran Chuck Blevins.
From a supplier's perspective, however, the combination of higher costs and lower demand "certainly places a lot of pressure on us," says Flint Group News Ink Business
Director Norm Harbin. But he and his competitors insist that hasn't changed research and development investment. And whatever else it may accomplish, when newspapers are "looking for improved efficiencies," he says, R&D's job is to "come up with innovations to save money."
R&D, he adds, is "even more important today" as raw material companies come and go, leaving the manufacturer to ensure "a dependable supply of materials to generate a dependable supply of ink for our customers."
While none denies that demand has fallen off, ink makers don't divulge sales figures. US Ink Marketing Manager Todd Wheeler discreetly points to an obvious production parallel: last year's acceleration of a 10-year decline in newsprint consumption. But he optimistically adds: "During the first five months of 2010 we are beginning to see newsprint consumption stabilize. …