Brown's Territory

PI: What about the customer side? How was 1999 for Brown?

Nitz: We were successful in adding several new multi-title customers to our base, while at the same time renewing contracts with several long-time customers. We saw pages from our customer base being relatively stable with the exception of pages from the computer technology sector, which fell between 10 percent and 20 percent. Although print orders remained stable, the lack of pages—particularly in the computer market—pushed printing volume for various titles down significantly. In total, circulation for special interest titles has shown mixed results this year.

The good news is that the number of new consumer titles launched the past several years continues to set records. Also, business publication advertising budgets remain at the same level as 1991, despite the growth of the Internet and electronic media.

PI: This was a record year for major news in industry consolidation, with significant activity linked to names such as World Color and Quebecor. What are Brown's views on this industry trend?

Nitz: Without doubt, 1999 was yet another year of significant consolidation activity in the industry. Was it too much? Time will tell, but I don't think so. In the end, fewer printers that can and will stay technologically up-to-date and financially sound will better serve the publishing community. Don't forget that the industry is still one of the most fragmented in the nation and that a great deal of consolidation can take place before anybody has to worry about lack of competition.

Our industry has been plagued by chronic overcapacity for at least the last decade, if not longer. Bringing capacity in line with demand is never a bad thing and, as this happens, the market should bring to the remaining printers a fairer price. With a better price, printers can improve their margins to the point where they ensure their reinvestment in the new technologies, which, in turn, allows them to serve their customers even better.