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Production costs: 5 minutes with… Mark Constance

Magazine production costs have risen sharply over the last few years, squeezing profit margins and putting some titles out of business. We grab five minutes with Marketforce’s Mark Constance to explore what publishers can do to control their costs.

By Mark Constance

Production costs: 5 minutes with… Mark Constance

Q: What are the main drivers of increased costs for magazine publishers?

A: The last 18-24 months have been some of the most difficult in terms of unprecedented cost inflation. The paper market saw cost surges as Covid affected demand. This resulted in paper machine conversions/closures that reduced supply, while simultaneously being hit with higher input costs. The paper strike in Finland saw further supply contraction and spiralling demand. Energy costs have soared and remain high, and inflation in general has seen print materials (ink, chemistry, plates etc) all result in cost hikes. Postage and supply chain costs also continue to increase.

Q: What do you expect to happen to the main production costs over the next 12-24 months?

A: Paper is starting to see some settling of price but is not returning to the levels previously enjoyed. Expectations are that this will continue, albeit slowly, and energy continues to be a huge factor. Now that costs have increased so dramatically, it’s hard to see them coming down to pre-Covid levels, so we need to think laterally at all ways of controlling costs. But there is no optimism that costs will significantly reduce in the short to medium term.

Q: How can publishers cut costs?

A: We have had to navigate through unprecedented production cost increases, whilst maintaining newsstand loyalty and subscriber retention. The traditional and go-to cost reduction measures such as less pages, reduced and cheaper paper quality, reduced volumes etc will only now go so far in mitigating spiralling costs. The cheapest cost is not always necessarily the best cost; simply printing less and on lower quality stock is more than likely to result in reduced sales.

Q: What are the risks associated with cost-cutting measures and how can these be mitigated?

A: These traditional measures bring immediate risks around perception of quality, value for money and customer engagement. Copy allocation and distribution is also key as reduced volume (if not optimally targeted) can result in non-availability, with customers picking up a competitor’s product if ours is not on the shelf. Increased cover price with a downgrade in quality ultimately results in alienating customers if the value offering is not in line with expectation. Advertisers can be easily turned off if quality is not to the standard they expect for their brands, and print ad £s are increasingly hard to come by.

Q: How can publishers look beyond traditional cost-cutting measures to optimise their costs?

A: It’s not just about simple cost reduction, it’s about examining all aspects of production and supply chain to optimise the spend to value ratio. Start by looking at areas that have maybe traditionally operated the same way for years without any examination. Ensure that presses are operating at their optimum and that paper usage is continually monitored and policed; if necessary, have a discussion with the printer on usage allowances being reduced once those presses are dialled into particular titles. Can a few millimetres be cut from the reel width to reduce tonnage? Examine the subscription proposition, and the subs volume order process to ensure those just-in-time volumes are aligned with demand.

Do we need to keep overstocks and high volumes of back issues? Do we need to keep materials, or order extra for emergency “what if” situations? Can we be more disciplined and align actual operations to budget forecast to control any potential overspend? Can we manage and streamline our paper inventory better to reduce cash tied up in stock and rationalise the number of paper types we use? How do we reduce aged paper stock and get more efficient order throughput of paper? Is the right magazine title being printed at the best fit printer for that title?

Asking these types of questions can produce some surprising answers, and it’s not always about the single significant cost areas. Reducing spend incrementally over a wide span can soon add up to a larger overall number, whilst maximising value for money.

Q: To summarise, what are your top cost control tips?

A: Working with and understanding other teams’ needs and goals within your business is key to understanding how costs can be optimised. Turn over every stone and challenge the status quo, just because something “is” doesn’t mean to say it’s “right” or fit for purpose. Look for those hidden pockets of cost that may just be dripping cash away without any validation and ensure that supply chains are not inviting unnecessary extra costs. Challenge and examine anything that is a recurring cost.

In an ever-changing publishing landscape, we need to change, develop and grow to meet the needs of our audience, whilst keeping our business profitable.

Q: What’s in the pipeline from Marketforce?

A: Given the current climate it’s more important than ever that we work closely with all our supplier partners across both the UK and the US, and continue to be vigilant in maximising production efficiencies. Not only in printing and paper inventory, but also in utilising our Apex allocation system to print the right number of copies and getting them to the right places. We’re also developing our internal print run systems to minimise manual input and exploring closer ties between our core systems to sweat the functionality of our tech as much as we can.

About us

With more than 30 years of experience, Marketforce leads the way in global sales, marketing and distribution for a wide range of publishing and media businesses. Owned by Future PLC, we are backed by one of Europe’s largest and fastest-growing media companies.

We are the #1 independent publisher newsstand distributor. Distribution is our core service, but our focus is also on helping publishers build their businesses through adding value. We aid product development, help determine optimal pricing and deliver customer marketing for brands that grows sales.

If you would like to hear why more publishers are choosing Marketforce, call us for a chat about getting the distribution you need.




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