No More Big Squeeze
Book manufacturers and publishers used to squeeze each other to cut costs at the other's expense. Now they are cutting costs together in partnerships of convenience.
Welcome to 2004. It's like 2003, only the recession's grip has lessened. Production managers continue to shave a penny here, save a dollar there, while keeping up hope that the vaunted recovery will hit their employer's slice of the book publishing industry soon.
Meanwhile, large retail and bookstore chains are returning books by the truckload, according to industry regulars. This dilutes revenues and increases costs for the publishers, leaving them with diminished cash flow and pinched profits.
With publishers all the poorer, book manufacturers aren't dancing in the aisles over the alleged recovery of the U.S. economy, either. Certainly it will come, but it's not here yet, according to several book manufacturers Booktech spoke to.
Book manufacturers are continuing their quest to increase sales and profits, while they cut costs and look for more savings. This quest for greater efficiencies is certainly a factor in the recent wave of mergers and acquisitions among book manufacturers and component makers.
For recession-weary book publishers and manufacturers, the process of cost containment and reduction goes on. And that, say the publishers and manufacturers we spoke to, is actually a good thing. Surviving the recession has resulted in leaner, meaner publishing and manufacturing organizations.
For production managers, cutbacks and consolidation of offices, plants, managers, and staff means they have to do more with less. Faced with smaller teams and budgets, publishers and manufacturers leveraged their relationships to help their organizations maintain productivity, quality, and a competitive edge.
"The biggest change I see in the traditional relationship is the one of the publisher sitting down with the printer and demanding lower prices," says Owen Mitchell, VP for global supplier management at Pearson Co., an international media company based in London and New York.