Scott Pellicone, VP, Digital Publishing, Quebecor World, Magazine Business

MM: Let’s start off with your full name and role at Quebecor.

SP: My name is Scott Pellicone. I am the Vice-president of Digital Publishing Business Development for the Quebecor World Magazine Division.

MM: What does the Quebecor World Magazine Division do? What’s its principle business?

SP: Our principle business is putting ink on paper; however, we do have a number of ancillary businesses that support our printing business, including digital publishing, premedia and logistics. These businesses all wrap up into our supply chain.

The role of the digital publishing business is to help Quebecor World (QW) move with the marketplace toward a dual platform – print and digital – reality. My role in creating this new market is really to get more on the revenue generation side of our customers’ business, rather than always being associated with the cost side.

If you look at premedia and logistics, we have always concentrated on cost containment, rather than revenue generation.

MM: I’m really glad you’re bringing that up. In a lot of the presentations and conversations around digital asset management (DAM), many of the people tend to drive a productivity strategy. It’s either reducing cost structure or increasing asset utilization.

SP: Exactly.

MM: They very rarely ever talk about a growth strategy. That is, how do we drive increased revenues either as a function of selling more stuff to people we already know, or creating new stuff and selling it to new people?

SP: Absolutely. I’ve been on both sides of the business, premedia, print, business development and sales over the past 20 years. However, over the last five years, I have been, concentrating on developing and supporting the synergies between magazine and catalogue print and premedia.

Our initial value proposition was always focused on reductions in cost and cycle time, by utilizing technology solutions to manage content as well as developing efficiencies in the publishing process via workflow automation. These solutions actually helped our customers internalize the process, cut costs and reduced cycle times. In fact, this strategy actually allowed the publisher to improve profitability by way of cost containment. This strategy only works in the short term, as efficiencies in process eventually become incorporated into the workflow. You can only be so efficient; there comes a time when you have to increase your volume, reinvent your business and migrate across multiple channels to drive revenue.

At Quebecor World, we utilize a digital content management strategy in our customers’ workflows, to help them repurpose their creative assets, manage their brand and marketing strategy more effectively to ultimately drive revenue generation. The same assets that are delivered to our printing presses can drive website development, interactive marketing, targeted and automated publishing as well as e-commerce solutions. Then we can converge across these different market verticals by using the same digital content and provide a solution which will allow a publisher to sell a product from a magazine, or driving sales by way of a catalog to a website.

MM: Scott, I want to explore two things you’ve touched upon. I’d like to expand upon them. One is the notion of a digital supply chain or content supply chain. From your perspective what does that mean?

Then the second thing is the kind of transformation of magazine publishers into multimedia platforms with multiple revenue channels.

Let’s start with the transformation of multimedia platforms. In another conversation interview that I’ve conducted, one of the things that emerged as an almost startling development…

The magazine business in North America stands in sharp contrast, for example, to the magazine business in Europe or Asia. In Europe and Asia, the Post Office does not subsidize the distribution of printed material. That’s why when you launch a new magazine in Europe or Asia, principally, it’s a newsstand. It’s distributed at a newsstand. As a function of uptake at the newsstand, you know within two or three issues whether you’ve got a profitable magazine or not.

Now in the US, because of the subsidization, oftentimes what it means is that magazine publishers in North America have to really launch a magazine and they don’t really know until two or three years out whether they’re actually going to achieve profitability, as a function of a combination of paid circs and advertising support.

That makes the North American magazine publisher to have really good sense, in terms of what’s going to work before they drop the $5 or 10m across a two- or three-year development cycle. Does that correspond?

SP: Yes. That makes a lot of sense.

MM: As a function of that, one of the things that magazine publishers are beginning to do now is — instead of launching a magazine and hoping to build an audience or readership around that, they’re launching micro-sites. Dedicated websites that are heavy on the social media. Heavy on the blogs and postings. Forum discussions. Heavy on the user-generated content with uploading videos and sharing and so on.

They build an audience, first. As soon as they get to a critical mass of opted-in participating subscribers to an idea, then they’ve pulled the trigger and launched print magazine. Harvesting a lot of the pre-existing media assets and editorial that came from the more Wild West, unstructured stuff that you got on the web.

SP: Understood

MM: Explain to me how DAM, per se, or a larger digital supply chain strategy — from your perspective at Quebecor — facilitates or accelerates that kind of a business setting.

SP: This is exactly what my new role at QW is. If I could just start again and recap a little bit. Digital publishing is: (1) Revenue generation for our customers. (2) Product differentiation. QW is more than just paper-print-bind. (3) Value chain management, which all wraps up into what I refer to as, “Digital logistics.”

Typically the core strategy of the logistics businesses at most of the larger commercial the printers — Quad, Quebecor and RR Donnelly, Consist of co-mail and co-palletization, two very similar manufacturing solutions that target cost containment by moving mail and printed materials more efficiently.

MM: For the readers not familiar with that particular part of the industry — what is co-mail and co-paletization? What does that mean?

SP: Basically, we take all the magazines and catalogues that print in all our plants, and send them to a consolidation facility. At the consolidation facility, these magazines and catalogs are aggregated, sorted and bundled based on the postal carrier route, and delivered deeper in the postal stream to take advantage of lower per piece postage rates.

Typically, there are five stops between the print plant and your mailbox.

MM: It kind of reminds me of a simplified version of internet routers.

SP: It works much the same way. Rather than going from the plant to the local post office to the regional post office to the national post office back to the regional post office near you, back to your local post office to your home, it will go from the plant to the consolidation facility to either the national or the regional one near your home. So you’ve saved two or three mail stops. The product gets delivered quicker, with reduced per piece postage, and actually arrives at the mailbox in better shape because there are fewer touch points.

MM: What kind of savings are you talking about, typically?

SP: The savings are significant, approximately 10–20 per cent. In addition, we can also keep track of it in that we know when the individual mail pieces are processed at the post office. We can actually mine that data and let the magazine, catalogue and direct mail publishers know that —”Okay, the mail is two days away from your potential client getting the magazine, catalog, or direct mail campaign in their mailbox, so they can staff up their call centers and prepare their websites.” This is the conventional logistics business.

Digital logistics is a lot of the things you were talking about. It all revolves around the vision of brand management. Publishers need to look at their magazines as brands. Not just ink-on-paper or printed editions. They need to have a multichannel convergence strategy, where they can utilize their micro-sites and blogs to interact with their readers. Further, publishers can use both the printed edition coupled with the digital edition to deliver customer value by way of real-time interactive content which can compete with other more interactive medias such as television and the internet. Then there is Automated publishing for the more targeted B2B type of titles or cities and regionals or colleges and universities. Shop the magazine which actually incorporates e-commerce directly in the magazine. We also provide search engine optimization, website traffic building solutions, viral marketing, social networking as well as web2print solutions. All of the above mentioned solutions roll up into this digital logistics front-end revenue generation business.

If you think about it, those assets that are coming in as images or pages need to be repurposed. You need a common filing space or repository, which would be your DAM. These solutions need to be efficient and actually drive the production process. So technologies XML, XMP and JDF as well as open source, cross media publishing tools need to be included in the workflow as well.