The print and paper industry in South Africa operates on four distinct tiers: paper producers, paper merchants, printers and publishers. The paper producers are Mondi and Sappi, they grow the trees, in twelve year stints (like a good single malt), pulp 'em, mill 'em and turn 'em into paper. This works well for newspapers, but for high-end magazine use, many publishers feel the local paper is not of a high enough quality. They source theirs overseas via a paper merchant.
As Atoll Media's publisher Craig Sims states. 'My personal thing with printers is the paper. All my magazines are printed on imported paper. I just don't like the local stuff. And all the printers I have dealt with have been willing to address that and the paper prices have been quite competitive.'
'When it comes to text and cover grades the variety and quality is a lot better internationally.' Explains First Paper's Pat Legge. 'In terms of normal uncoated the quality is as good in South Africa. But when it comes to coated, the quality is slightly better from overseas.'
Paper producers Mondi and Sappi cannot serve the printers directly because they do not make the wide range of paper required and they only supply in bulk. Paper merchants (Nampak, First Paper, Peters Paper etc.) source different grades of paper from all over the world and provide it directly to the print industry as required.
'Paper merchants buy in bulk, store it and resell it to the printers in smaller increments. The industry is about distribution and storage.' Says Legge.
The printing industry in South Africa is largely dominated by two big fish: Paarl Web and CTP. These leviathans control 85% of the commercial web and publication gravure printing market in South Africa.
There is no doubt that Paarl (Media 24) and CTP (Caxton) have the high bulk magazine printing industry, web and gravure, by the short and curlies. As Toni Venturini, Publishing Manager for Hirt&Carter, and a print industry expert, says, 'big publishers will only make use of web or gravure printers, so that narrows the market considerably. You either have the Paarl stable or the CTP stable, those are the two major players in the industry.'
Moreover, both Caxton and Media 24's print operations are big enough to source and store paper directly from the producers, therefore cutting out the paper merchants, and their mark up.
As media groups Caxton and Media 24 are also intensely vertically integrated, owning everything from a veritable smorgasbord of magazine titles to the printing presses and the distribution network and infrastructure that gets the publications onto the shelves and into the punter's hands.
Whereas smaller publishers' costs snowball as they outsource pre-press, printing and distribution functions, Media 24 and Caxton run very tight ships by owning the various stages of production and keeping overall costs down and profits up. This vertical integration has allowed media conglomerations like Media 24 to invest in streamlining the publishing and printing process with the latest technology, hardware and software.
Media 24's pre-press manager, Neville Poulter explains: 'We took the people who do the pre-press (scanning, retouching and assembly) out of a factory environment and put them in editorial. Our designers can talk directly to these guys, whereas previously the process was quite complicated. We've saved an incredible amount of time by doing that.
'We have a fairly complex back-end scenario using servers that unite the work flow from design to pre-press, which in turn gets put on a server and goes directly to the printers. And then that goes straight disc to plate. The whole thing is vertically integrated. In the past everything ran late, and that became a norm and there was a high level of anxiety and stress attached because obviously the on sale date doesn't change. In the new work flow we haven't actually missed a deadline, the guys don't have to work these long hours, we've done away with the shift system and its just made a far more pleasant working environment.'
Obviously the benefits of vertical integration do not just manifest in pleasant working environments and easy deadlines, they also make the business a helluva lot more money. It is fairly safe to bet, that even though Media 24's magazines, printing presses and distribution infrastructures operate as independent companies, they operate at cost when serving their sister companies in the chain, keeping overheads low and creating the biggest bottom line for the corporation, instead of profiteering at every stage of production. This is a very different scenario for the independent publisher, who generally gets fleeced at every stage.
At the same time Media 24 and Caxton, being the biggest players, offer their printing and distribution services to the industry at large. Which means that many of their 'in-house' magazine and newspaper titles are in direct competition with independently published titles that rely on the Caxton and Media 24 printing and distribution services. This creates an interesting tension in the industry.
Associated magazines are probably the most affected by the situation. They are the largest independent bulk magazine publishers in South Africa, outsourcing both their print and distribution needs.
Associated Magazine's business director, Julia Raphaely reckons vertical integration can often distract publishers from their core business. 'We're an independent, family run business. We choose to specialise in our core strength which is publishing magazines. Sometimes in a company you find printers taking on magazines to feed the printing press, because it is a contribution to overheads. And that is when you get magazines that are not published with the same passion or focus that a core publisher will have.
One of the main points of difference between us and Caxton, with regard to Marie Claire, is that we are publishers and they were printers and publishers.'
However Associated Magazine's huge print runs on magazines like Cosmo and Femina necessarily dictate that they have to go with either Caxton or Media 24 because there are no other printers in South Africa that can handle their volume.
'I can honestly say that in terms of printing we have a good relationship with Paarl.' Says Raphaely. 'It is a mutually beneficial relationship and they are good partners. But I always think competition is good. I would never say it is good that there is so little competition in our critical areas of printing and distribution.'
However for smaller print runs (up to about 50 000) there are several independent printing presses such as Ince, Ultra Litho and Printability as well as printers associated to Caxton and Media 24 such as Paarl Post and BM Litho, all competing for your hard earned Titos in the small to medium print sector.
Toni Venturini, Publishing Manager for Hirt&Carter reckons these smaller printers provide a little bit of competition to the CTP/Media 24 block. Take for example, 'If one of the machines at CTP Web or Paarl Web go down you lose 50% of the productivity - whereas with a small printer, running 5 or 6 small presses then you feel you are in safer hands.'
Printability in Durban are fast becoming one of the most proactive and competitive small to medium printing operations in South Africa.
Their client Atoll Media's publisher Craig Sims says, 'my printers do a great job. I find printers to be radically pro-active and sympathetic to the reality of publishing, and that is simply that we never get our shit together and we are always late. I have never met a printer who does not accept that as part of the territory. I don't have anything negative to say.'
Leslie Heeger of Printability laments of the industry at large. 'One of the biggest impediments we have is the state of the material we receive and are expected to work with. If everyone were like Atoll it would be great. We're totally digital and we don't receive film, but many of those putting together the material to supply it print ready are not sufficiently informed - so when we get it, we find so many mistakes and errors.'
But surely the impetus rests with the publisher?
'No. It doesn't work that way. We are in the service industry. We go back to them and report that these things are wrong and they say please fix them. And there are a lot of companies out there that don't understand, and are not fully informed as to what is required when one says "print ready material".'
'There is a sense of service here in South Africa that is really great in terms of printers who work for publishers.' Says Venturini. 'Yes, there is very little competition but everybody is always afraid of losing business. Also new small printers are becoming players, they're not as big as the big ones but they want to be players.'
So despite the lopsided shape of the print industry when it comes to bulk printing the overall relationship between publishers and printers is strong.
'Publishers won't change printers as quickly as other industries like advertising.' Venturini continues. 'Our print prices are quite competitive in terms of web printing and the quality is also quite good, comparable to any magazines in Europe.'
Regardless of South Africa's global print price comparability, printing remains a very costly business. Magazine cover prices rarely cover their printing, production and distribution costs. Cover prices are necessarily subsidised by advertising sales. What this means is that your most influential player in the magazine publishing industry is, most often, not the reader but the advertiser.
'I think all consumer magazines are not making money off the cover price,' explains Julia Raphaely. 'the problem is that we're not able to get another revenue stream from cover prices because of the cost of distribution, plus you've got very high printing costs. So it's all good and well to sell an added value supplement, and it's great for the reader. But you can also end up, if you don't do your costing right, just bringing in more business for the printer and not bringing in more revenue because the costs of producing it are so high.'
Necessarily what happens is that magazines go all out to attract advertising to cover their costs and increase profitability. Magazines increasingly refuse to run edgy content that might challenge the status quo, or offend advertisers in any way. And like Star Wars, publishers tend to the dark side and the corporate take-over of the fourth estate is almost complete. Increasingly publications start looking like brochures and content morphs into 'added value' and editorial to 'advertorial'. Readership is seen only as a way of justifying more advertising spend. Because of the lack of competition in print, the publishing industry in South Africa has grown fat on the nipple of advertising. In so doing many publications fail in their primary function to mirror, inform and serve society.
A full colour, A5, glossy, 96 page magazine printed on 180gsm paper, 4 page 250gsm Matt cover, perfect boundPaarl Post came in at R76000 or R15.20/magazine
To break even my magazine would have to cost R30 - considering distribution generally swallow 45% of your cover price for providing their service. This is not including contributors fees, staff costs, rent, computers and other operational costs.