Newspaper & Mailroom
Interview with Marc Z Kramer, CEO of the New York Daily News
Tuesday 28. October 2008 - Daily News ingrained in New Yorkers lives
Over the past few years the US newspaper industry has experienced wrenching changes, exacerbated more recently by the financial meltdown and ensuing business crisis, both of which demand a strategic realignment. The print media industry is wracked by diminishing circulations and advertising revenues (particularly for classifieds), the erosion of formerly healthy profits, the closure of editorial offices and production locations, company takeovers, staff cutbacks and a perceptible shift in investment activities from print to online services. In this more defensive environment the New York Daily News bold investment last February in a multi-unit KBA Commander CT press line for its popular title daily caused a minor sensation. KBA marketing director Klaus Schmidt spoke with CEO Marc Z Kramer on the current situation in the US newspaper industry, the different strategies of individual companies and future plans for the high-profile publishing house he heads.
1. Mr Kramer, with an average operating margin of 10 per cent or more the US newspaper industry is still fairly profitable compared to many other branches of industry. How do you interpret the pessimistic mood prevailing in this sector, particularly in view of the fact that the ongoing mortgage and financial meltdown has pricked inflated profit targets?
Marc Z. Kramer: While the financial crisis has affected many companies throughout this country and throughout the world, the Daily News continues to remain optimistic about the future of newsprint and the future of our business which continues to grow in new and innovative directions.
2. Do you believe that purely defensive initiatives aimed at cutting costs, for example by adopting narrower formats, can strengthen printed newspapers position in a fiercely competitive market environment?
Marc Z. Kramer: Cost cutting alone is not the answer for the newspaper industry. Newspaper publishers need to continue to provide a valuable service to readers and advertisers. That means investing in the quality award-winning journalism the Daily News is known for, as well as being innovative and working with advertisers to develop their businesses.
A newspaper must constantly re-invent itself every 24 hours with each edition to maintain reader interest and provide advertisers with top-notch audiences. To be competitive in todays fast paced and evolving market the Daily News also recognizes the need to progressively integrate a transformation of the newspaper model, which is why we are investing in new KBA printing presses which will allow us to bring full colour to every single page.
3. Some publishers, also in Europe, prefer to invest their money in overpriced internet portals than in print – often with only modest economic success. Now Google, that highly successful search engine, has launched a fan magazine and is negotiating with leading newspaper publishers on accessing the archives they have built up over generations. When allocating your budget, how do you maintain the delicate balance between online and print with the limited resources at your disposal?
Marc Z. Kramer: Print is the backbone of our business and will remain so for many years to come, but we also recognize that our growing audience has new and diverse interests and needs. Extending our reach through online and mobile platforms is a key element in our overall media package and it allows us to enhance our print product by providing useful and entertaining information to as many households as possible. Web production is cheaper and faster, therefore the allocation of resources in relation to return is more easily managed. But while our online traffic and revenue continue to grow every year, print is the focal point of our business and will continue to command much of our energy for a long time to come.
4. Your website, NYDailyNews.com, is a big success, yet you are investing millions of dollars in your printed product. What prompted this decision?
Marc Z. Kramer: NYDailyNews.com is one of the fastest growing newspaper sites in the United States, having nearly doubled its online web traffic over the past year, and it was recently ranked one of the top 30 global news destinations by Nielsen. However, at this time, web revenues have not come close to approaching those of print. As the top-selling newspaper in the largest media market in the US, we continue to dominate in our local market. Every website competes against thousands of competitors on the internet, but the Daily News is very much ingrained in peoples lives and it generates a huge amount of loyalty because it is a trusted source of news and information. While we continue to grow and to innovate with other platforms, we do not have plans to divert from our printed product.
The way of the future in newspaper and semi-commercial production: KBA Commander CT compact high-tech press with conventional inking and dampening (2)
5. While press automation has never been as popular among US newspaper printers as it is in Europe, the triple-wide KBA Commander CT press you ordered is as automated as they come, and even includes automatic plate changing. What were your reasons for choosing this press, thus assuming a pioneering role in the USA?
Marc Z. Kramer: In making the investment in new presses, we knew that we had to do something different to gain an advantage in the marketplace. The key factor for selecting our new KBA presses was their vivid colour. We live in a colour world and need to provide our content and ads in 100 per cent crisp colour.
In addition, the new presses will provide advantages for editorial, advertising and circulation with their flexibility, enhanced speed and functionality which will allow us to make last minute updates to our product and provide our readers with a newspaper that is both top quality and timely.
Six by two (6×2) newspaper press technology offers significant economic and productivity increases over conventional four by two (4×2) presses. The flexibility of triple wide formers above the folder allows for a variety of special sectioning, wire stapling and other options to meet the future needs of our advertisers and readers.
Because each printing unit prints 50 per cent more pages, a third fewer printing units are required compared to 4×2 presses, making the overall press length shorter. With fewer printing units web leads are shorter, fewer rolls of newsprint need to be handled and fewer automatic reel changes need to be made.
On a traditional press where every page can be printed in full colour the number of plates that are required to plate up a press is considerable and very time consuming for the press operators, who have to climb up and down stairs on conventional colour tower presses. That wont be the case with our new presses.
One of our objectives was to reduce the time taken to plate up the press and have fast edition changes. The low height of the KBA Commander CT press means there are no stairs for the press operator to climb in order to plate up.
The fully automated KBA PlateTronic will plate the entire press in about two-and-a-half minutes.
KBA press control systems combined with NipTronic control of printing pressure and RollerTronic for the automated setting of inking rollers will assist in maintaining optimised press settings, print quality and productivity.
6. In view of the information overkill and the lack of interest in reading among young people in the USA, do you believe printed newspapers have a long-term future in metropolitan districts like New York?
Marc Z. Kramer: As the top tabloid in the largest media market in the world, we do believe in the future of newsprint. While it is impossible to predict the future, the Daily News plans to be around for a long time to come as both a printed and an online product. New Yorkers will always need access to news and information and our readership numbers and web audiences tell us that people rely on the Daily News as their trusted news and information source. As we mentioned earlier, our new KBA full-colour printing presses are going to raise the bar on newspaper printing in the United States. When our new presses are fully operational, the Daily News will be the only major market daily newspaper in the country that can print in 100 per cent full colour, positioning us miles ahead of our competitors.