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- Newspapers
are panicking and magazines have few options
to print. That are some of the major conclusions
in our most recent market study and we do also have some answers
of what to do about this situation. Welcome to Holmen Paper -
a company truly devoted to paper.
- A company occupied by people who is
actually exactly as you are - committed
to paper. My name is Jonas Lindell
and I will be a moderator and guide today. Welcome also to Braviken
Paper Mill
here in Sweden I where we today will meet
two of my most brilliant and committed
colleagues who will do the presentation of this market study
for you. Now
you can follow this webinar, of course live
as you do now, but also afterwards on Holmen.com.
- You can interact with this webinar by putting forward questions
in our chat room and you can find a little cloud down on your screen to
the left,
sorry to you right of course.
- Now I think we will skip
all small talk and just jump right into action.
It's a pleasure for me to invite one of my colleagues
she is the head of Holmen Papers Market Intelligence department:
Karolina Svensson.
- Please welcome here and you will actually tell us about this market study
and maybe you should start by telling how did you do it. - Yes,
we interviewed about 40 companies,
we had longer interviews with 30 of them.
- "We" that is me and my committed colleagues here and two other colleagues of ours.
The companies we met they are publishers, retailers, printers
service and content providers and they're located all over Europe.
- They're all among the top five in their own markets,
and we met stakeholders affecting the choice of media channels
and paper choices. We did this
study to understand what is going on in the print industry
what are they looking for and what will they be looking for in the future.
- So let's start!
- The key findings are that paper choice has never been as important as it is
today
and magazines they really don't have any alternatives.
- European retailers they're truly confident with print.
- Newspapers are panicking a bit and the environmental issues
are crucial to retailers. Let's start with magazines:
- A pan-european magazine publisher said that
"Printed magazines will become even more nieche. Smaller areas of interest,
and more local focus.
- That is just an example on magazines becoming more and more specialized
sports magazines becomes running magazines
and fishing magazines becomes fly fishing magazines.
- With the local part it so that people are more and more interested in
reading what's going on
around themselves, in their own communities so
reading about people they know, gossip and this
nieche areas. That is what we will do in the future.
- A Scandinavian media strategist told us that
"The number of new titles today is a 100 per year
but only ten percent of them survives long-term", and
this is an example of that everything's going so much faster.
- There might be more titles or at least as many as a couple years ago to start
but if they don't work, they close them down faster and faster,
they don't stay on the market for too long. This French media house
told us that
the loss of revenue through subscription and ads in printed newspapers and magazines
will never be
compensated by the web and by that they mean that
the money taken away can right now not be replaced by things online
or on mobile so the money taken away by print
it's not replaced by online. This German magazine publisher said that "Paid
apps and online magazines have to grow
but no one has taken the risk to charge for content". In the newspaper world they
have started to
charge and tried to out different things but in the magazine world they really
haven't
and no one has succeeded yet. There are iPad magazines
but they don't really make money and
there isn't really an alternative to print.
- So there is a strong belief in the printed magazines
they will stick around, they will be around for a long time.
- Future magazines will become even more nieched than they are today.
- There will be fewer subscriptions and shorter lifetimes to each magazine
but there is not really an alternative to print yet.
- What about the newspapers then?
- The Scandinavian media strategist said that
"You see yourself as a content provider and it doesn't matter how the end
customer consumes media.
The problem is that the money is in print right now."
- We in the print industry have to realize that
the newspapers don't care if they print or not. It might even be cheaper for them
not to print
because their print and the logistics are quite expensive.
- But right now they can't make money from the other sources
so there are a lot of experiments going on, they tried different
paper types but they also try it different subscription programs where
they mix
online with print.
"It is important to make readers understand that newspaper publishers
must charge for news,
this has started but is still not fully accepted."
- So there are newspapers with pay walls, there are newspapers we can read
a certain number of articles for free but then they start to charge you.
- And some of them have succeeded a little bit but they can't survive by it yet
so they still need the print.
"Print gives you a better overview and that is the iPads downside.
The future is a printed product in another shape containing
what it is good at - longer stories and analysis."
- That is one example of what the future newspaper will look like.
- It might not be published every day of the week. Maybe just three times a week.
- It will contain the longer stories but it won't carry the news itself
because the news he will get elsewhere
on the Internet or on the radio or TV.
- So there's quite an uncertain future for newspapers.
- Circulations will continue to decline, everyone agrees,
and they will go online. They are experimenting with different kind of
subscriptions but also on paper choices:
different basis weights, different kinds of papers, different layouts,
different sizes.
- There is some feeling of panic, in the newspapers.
- The newsrooms are moving in together with newsrooms of other channels like
the newspaper
newsroom together with the TV team and other examples.
- They are firing their photographers and their journalists take
the pictures themselves
but they haven't really come up with a good solution. So it's like they're
running around a bit
and aren't quite sure what to do.
- The upside is local newspapers, they could have a brighter future because
people are, as I said, for the magazine's
interested in reading about what's going on around them, what neighbor had a baby,
what local celebrity did what.
- And advertising then. "The advertising portfolio is a very complex
and advertising agencies are no longer familiar with print."
- It was a German magazine publisher telling us this
and that's really a lesson for our industry
we haven't been there, we have been promoted our media
because we haven't had to, we thought. The others though, the new ones, they have
been there.
because they've had to promote their media. So we really have to
step up and be there.
- So multi-channel is here to stay. Hardly no advertiser will use only one
channel.
- They will use TV together with print and online
and it will all be done at the same time. Online advertising is the
one channel growing the fastest and advertising in local newspapers and
magazines
will remain important, even the print editions.
- And there will be more niched magazines that will help advertisers to reach
targeted groups.
So what did the retailers say, the advertisers themselves.
- To look at which advertisers we have spoken to and how they
advertise today. They mainly use print advertising. It's the number-one.
Broadcasting is number two and online is the
third one. What kind of print do they use then? Well they
use, as you can see in the diagram to the right, direct-mail
un-address direct-mail to 83 percent.
- Address direct mail is not very big only two percent of their advertising.
- Catalogs eight percent and then other
media, printed media, such as customer magazines or
consumer magazines
together constitute seven percent.
- So what will happen in the future then? Well someone says here that "Print media
is active,
internet is passive media." and that is why print works well.
- With print you have to do something actively to
to read it. If you get a pile of direct mail in your mailbox
you have to take it up and you look at it when you choose to do so
and people like to make their own choices. So at on the Internet
you do get it at you while you are passive and we don't enjoy that as much.
- So that's why print works quite well.
- This German service provider says that "What speaks for print advertising
is the touch and feel concept you can't get elsewhere."
- On the radio you can't feel it
and what you see on TV you can't smell. So you get with print the
whole experience.
- Catalogs, product catalogs, they will go more online
where we can more easily can visualise the product.
- So even though you might get inspiration in a catalog,
catalogues are becoming more of inspirational
magazines: magalogs. So it's a magazine catalog
where you get the inspiration. You might see the piece of clothing you're looking
for in a nice setting
or you see a trip you're looking in more of a story about
that place you want to travel to. But on the internet you do the actual
purchasing.
- And you can also see the products themselves in a bit more closely.
- If you're looking for shoes you can turn the shoe around and look at the sole
what it looks like.
- So that how it will work in the future.
- A pan-european retailer tells us that "We will continue to use paper, because it
drives traffic into the store,
but during 2013-2014 the web will be more developed."
- And by that them, and others we spoke to,
meant that the web is constantly developing and
offering new alternatives
like web TV and other things on the web
that makes it more more attractive alternative.
- So that's why the online advertising is growing more and more
we learned.
- Another international retailer told us that "on group level
the trend is to use less and less paper. There are big differences between
countries
In the UK we stopped sending direct mail but it is still important in Poland,
France and Spain.
- And we met this at other retailers as well
but there are a bit different between the markets. I'm not saying it's the same
markets. But what works in one market might not work in another
so they are all constantly trying and
testing what works.
- The multi-channel strategy will be the norm. Everyone will use more than one
channel.
- It won't be just print or just TV or just online
everyone will use at least a couple of them.
- They will spend pretty much the same money they spend today, the same amount in
three years time.
- But more and more of it will be online. Printed advertising will continue to
drive traffic to stores
so there will still be printed advertising and the concept of "magalogs"
is believed to increase.
- What about environmental issues? Do our customers and potential customers care
about that?
- Someone said that the industry needs to get better at informing the
end customers about the
environmental benefit of print. So once again here is something that we as
paper industry
haven't really been good at. So we have to teach them
about the benefits of print.
- Then we asked about specific certificates and
what certificates they were looking for. In the left
diagram you can see here that FSC and PEFC
are the two biggest ones, the most well known ones, the ones they asked for.
- The EU eco-label becomes more and more popular
and is more talked about especially by the retailers
since its in some countries been base for some new legislation or some
new taxing where they have to pay tax
on what this sent out.
- To the right you can see what publishers... If they think it'll be more
and more important
with this. The retailers already think environmental issues are crucial
a lot due to the new legislation, but also for other reasons.
- They want to be perceived as environmental friendly and they don't
want anyone to blame them
for cutting down the trees when they send out their direct mail.
- But the publishers aren't as concerned yet. 33 percent of them think they will be
more concerned in a couple of years
where as 67 think it will be the same as today.
- So to have an environmental profile
as a paper supplier is highly important. But it's more important to the retailer
than to the publishers.
- Recycled fibres are seen as more environmental friendly than ***
fibres by many that we've met.
- After discussing it for a while they've might change around. Many of them aren't
as knowledgable, or they don't know as much about it, but that
something they believe. Many of them also take for granted
that paper suppliers are certified. That we use certified wood
and they don't really think too much about specific certifications.
- Then also un-address direct mail is perceived as poor
while addressed mailings are perceived as better.
- This is a bit struggling for some
retailers. About printing then.
- What methods will be used? Gravure printing will decline
and today retail print is dominated by heat set while publishing is
dominated by gravure. But as
circulation drops gravure will disappear more and more
and this is because it won't be cost efficient anymore. You need quite high
circulations to
be able to do it cost-efficient with gravure.
- Printing method is a question of taste and price.
- Advertisers like the look of gravure better, someone said,
so that might be a reason it will be around for some more time.
- So, we are a paper company; we were interested in what to the customers
choose paper on? What effects the paper choice?
- As I first started out saying: paper choice has never been as important as it
is today.
- And we found that basically there are three different reasons:
it's the strained economic conditions.
Especially the publishers, but also the retailers, have a rough time.
- They really need to know where the money is going and what options they have.
- So they are experimenting and doing trials with different basis weights,
paper grades,
new formats. All different kind of things.
- So they're looking for alternatives. Also it's a recognition that paper builds
image.
- If you choose a certain kind of paper, you will give your product
a certain image and also the advertisers are
well aware of this. So they might want to choose to
advertise in a magazine or a news paper on a certain kind of paper.
- And the last reason is there are so many different products out there.
- There are a huge number of opportunities and a different
papers to choose from and they weren't all there a couple years ago.
- So, someone said: "Most important to the advertisers
is the quality of the print result, rather than the paper grade."
- We gave all interviewees
quite a large number of criteria
that we asked them to rank. You can see them all here, I won't go through them
one by one.
- But in total a good overall print result was the most important one.
- With good readability, and press room performance and cost at third place.
- What was not as important, looking at the bottom, you can see that high stiffness
and high paper gloss,
they weren't very concerned about that. I will
break it down a little bit more. Publishers though, they had a rough
situation
and their paper selection is quite affected by that. So they think
competitive pricing
and a reduced cost, that's what they are really concerned about.
- Where the retailer's values good print results
a little bit more. They aren't as concerned about the price but they want their
products to look
their best on paper.
- Putting these different criteria together in three groups:
we put overall aspects in one group, haptics in another and traditional paper
characteristics such as: whiteness and opacity
in the third. And then we saw that the overall aspects such as good runnability
and value for money
is the most important one, by far. To publishers value for money was the most
important one. And retailers
the good print result. Haptics
comes in second place. How you perceive the paper; the touch and the feel and
the smell and everything like that
that comes before the actual characteristics themselves.
- However we are interested in the characteristics as well.
- Because we might wanna find out what we can do about it.
- So looking at thos we see that opacity is the most important one.
- Whiteness is the second most important,
and bulk is the third most important. There was a slight difference between
retailers and publishers there. The retailers look for the bulk a bit more
than the
publishers. They look for print gloss instead.
- So to summarize: the paper choice is more important than ever.
- The magazine's don't really have any alternative to print
- European retailers they are confident with paper
- The newspaper are panicking and the environmental issues are crucial
especially to the retailer's. - Okay
thank you Karolina, very interesting. I myself was thinking a bit about what
you mentioned about
the fresh fibers versus the recycled fibres.
- What would you say is the most common
misconception about those to greatnesses?
- Well, the ones we've spoken to that
were thinking that way they say "well since they are
recycled
the have to be more environmental friendly",
- But they don't really think about that something has to feed the system
and also in Sweden or in northern Europe
we are very good at the forestry and we take good care of our forests. We plant
more trees for every tree
we harvest. And we have a lot of forest, more than we did.
- So we have some work to do with communicating true facts really?
- Absolutely. - And taking away the myths about fresh fibers?
- Okay, thank you very much! We will come back to you later
during this webinar. Now
Karolina was talking about paper characteristics
and that leads us with great precision to our next speaker.
- He is very much the soul and brain behind
Holmen Papers specialities papers a very successful
story indeed. And as head of
Holmen Papers market and product development
he's truly committed to the possibilities that the fresh fibres bring.
- Tommy Wiksand, welcome.
- Thank you.
- We've just been presented a very interesting market study.
- Why do Holmen Paper do such things at all and have we done it before?
- Yes we have quite a long history of different market studies.
- We try to understand the market a bit more and that's why we
go out on a regular basis and also to see if the market has changed.
- We have done studies longer than this, but on the other hand we just
point out some of the last
10-12 years. You see that it is
alot of different studies and that has changed over the years.
- Thanks to these studies we have been able to develop new grades
like Holmen XLNT, Holmen BOOK and
Holmen VIEW. Now also
since one year ago we launched Holmen TRND.
- And this is quite interesting because we have to the customers,
to the end uses and than to see what kind of grades can we do
with our forest here and our different grades.
- What is then the
requirements for a future paper that we have learned over the years?
- It has to fit for the purpose. That means that the paper is
really part of the image of the different brands
and what kind of publishing
item that they do if it's a leaflet or if it's a flyer or if it
is a magazine. It has a
really have big influence on the image. So the feel and touch
is important on the paper grade. We will of course come back to cost efficiency
all the time. Thanks to the spruces we have here in Sweden
we can work with that and then we can find more cost-efficient alternative
for the customers.
- High definition print quality, that's what Karolina talked about,
the print quality is crucial nowadays. We are used to look at screens, that's always HD
and and we have to have paper grades that can be as good as
possible when it prints.
- When it comes back to low basis weights, this is something we have a long history
in within Holmen Paper.
- We try to develop this because the cost efficiency in low basis weights
come back.
- Low basis weight is important for distribution costs and the total cost
of the end product.
[fixing microphone]
- Thank you Jonas
that was really good, maybe now someone hear me now. Continuous
improvement that is
really what we have to do then. We have to listen to the customers all
the time,
bring back the information and together with teams at the mill together
with marketing and
product development then we are on the right track.
- Talk about haptics. What this haptics then?
- It's a combination of the different senses
that means the look, smell, the sound
and also the feel of a paper grade. This is something we always consider
when we do a new paper grade.
- We do blind tests among our colleagues and see what kind of paper they like
etcetera before we launch something.
- In the end of the day, what do we do with all this information then?
- And how does the market take it? The market position
our brands like this. That means Holmen XLNT is a good alternative
since a couple of years now to SC.
- Holmen VIEW is a good alternative to coated grades.
- And now when we have started to launch Holmen TRND up there,
then we will see how the market response, but we have good hopes for it.
- It feels really good. We come in at the Holmen VIEW.
- Holmen VIEW is developed since of a
couple years. It has the characteristica of a silk feeling.
- The touch is really there and the sound also is quite nice.
- We have a high brightness on this one. The basis wights is quite OK
also
- The end use today is mainly magazines
and catalogs. Some retailers also use it
but we think that its on its way, it started just recently.
- To the new grade we launched this autumn:
Holmen TRND. The feeling is so rough and tough.
- It's really thick and you hear
the sound is so also of a thick paper. The printing and the images is quite
nice and this works very well
in in heat set. It has an impression of luxury
and that is also how we've been able to develop it the
thanks to different publishing houses. You can also
order this ones, if you want samples, on the web page.
- Okay, thanks very much. Looks very nice doesn't it?
- Yes. - Thank you very much Tommy. I think we should ask Karolina to come
back to us
here to have a sort of final discussion about this. Tommy I would
like to start with you.
- You mentioned Holmen TRND here as
our latest product. How has it been received by the market
by our customers?
- Both customers and also end uses:
everyone goes for this paper and want to touch and feel and the
they like it. So far we have only positive comments
about the grade. - And both Holmen VIEW and Holmen TRND is a result of
our previous market studies? - Yes - And now we have a new market study at our
hands so can we expect something new from Holmen Paper
going forward? Yes, but I will not tell you any details about it because it's
in the pipeline. We have ideas.
- Alright, but we can expect something? - Yes.
- Now Karolina, when you have met customers
throughout Europe, what is your sort of ...
- How do they receive you? How do they greet you?
- Are they open with talking about their situation?
- Yes, they were very welcoming and they almost
asked us to come in and wanted to talk about to their situation. They
were happy we listened to them and they wanted to help out
and as one colleague put it: that if they wouldn't let us in a couple
years ago, now they wouldn't let us out.
- So what would you say
if you meet a retailer or if you meet a printer or if you
meet a publisher; what differs them in this market study?
- A little bit that the publishers are in
a tougher time. It's rougher. They have to think more about
cost. They don't really know what to do to survive.
- Whereas the retailers still have several options.
- Okay. What did surprise you the most? - That the magazine's don't really have a choice.
- They don't really have a good alternative to print.
- I thought it would be more developed by now.
- Tommy,
what are the customers looking for right now would you say?
- And does it differ anything from your earlier experiences
or how it used to be? - Yes, we see a difference in
this study compared to the last one.
- And also when you meet with other customers, people ask for more
matt grades
- I would say that matt is the new luxury.
- A couple years ago we did a survey and everyone was talking about: gloss, gloss,
gloss but now it's matt grades. It's a kind
of change of mind. - And what would you say that Holmen Papers response to that is?
- Especially Holmen VIEW there with
a matt grade but with a high print gloss, I think that this is
really a result of this. Also then Holmen TRND. That is really a niche
product with a very matt and rough surface.
- We talk about magazine grades here
and and Holmen Paper has a tradition of being a newsprint supplier.
- Are the customers somewhat bewildered by this? Are they
surprised that we actually have products like this?
- Not now but a couple years ago they were wondering what we were
doing more or less. But nowadays we are a supplier especially
to some segments and then we are a newcomer in
the publishing side. But the newsprint is very important still
for the,
both southern Europe and Northern Europe.
- Karolina, when talking about sustainability and environmental aspects
- What would you say stands out in this survey?
- That the retailers are so concerned about it.
- It's basically because new legislations and new taxes coming on to them.
- They are really on top of is and they're looking for
papers that are certified, or meets the needs.
- And the publishers, don't they mind at all? - They do! It's
an important
question but they more or less assume that all paper is certified
and it's not the hot topic yet for them.
- Okay. Will it be? - Might be so.
- We talked earlier about, you know,
our specialty papers being based on fresh fibers.
- How is that perceived? We touched upon it, but are they
reluctant to go there? - Not really. When we explain what it's all about
and they really like the product so we just explain it. They seem like
they are interested in and there's no problem.
thank you very much. Looking here at the audience here at the Braviken Paper
Mill
or to the web out there, do we have any questions?
- Anyone here want to ask a question?
- Okay. Well many thanks Karolina and Tommy for a nice
presentation. Thank you
very much for watching this webinar from Holmen Paper.
- The wwebinar will of course be available afterwards
on Holmen.com and here you aslo can, as Tommy mentioned, order
samples or get in touch with appropriate contacts
in our organization of course. We are so happy that you joined us today. Have a
very nice day.
- Thank you!