R. R. Donnelley has just finished digesting Courier. And now it is splitting into three bits. Is this a good thing for us publishing people? Dead Tree Edition sees the motivation primarily as liberating value in their financial communications business which is perceived as being saddled with the dead weight of the printing operation, where a good year can be regarded as a year in which sales didn’t decline! And the hiving off of the logistics operations they account for as a means of freeing the resultant print division from the accumulated debt and unfunded pension obligations, so that they will be able to incur fresh debt in pursuit of even more industry consolidation. So FinanceCo is free to see its value soar; the print division, PRSCo, standing for Publishing and Retail-Centric Print Services Company, can incur new debt and acquire yet more bits of our beloved old book manufacturing business; and the debt-heavy remainder (CMCo, Customized Multichannel Communications Management Company) can soldier on as best it can. It does all appear to make some sort of sense even if it does rather negate all that talk of synergy. Whether it works time will, I guess, tell.

If new acquisitions are going to be made, it may be that having Donnelley make them is a fine thing. They’ve always been a well-run company. Of course acquisitions tend to come trailing clouds of capacity reduction and job loss. The long and short of it is that we print-based folks are living in a shrinking world. Excess capacity (or too much of the wrong kind of capacity) will be with us for a long time. It’s not so much a matter of e-books taking away from the printing press; e-book sales have been stable or slightly shrinking for a while. The real problem is that the bulb went on in our heads and we publishers are no longer blithely over-printing everything. There must be few publishers who are not very tightly controlling their inventory, printing shorter runs in the first instance, and then reprinting small quantities early and often. This is not a very helpful environment for the capital-intensive book manufacturing industry, which would ideally like to see one vast machine running for weeks on end. Constantly having to stop and change plates because the run is so short is just not the model these companies grew familiar with over the last quarter of the previous century. The adjustment is grinding.

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