BY SEAN CALLAHAN
In an effort to duplicate the buying power of larger publishers, a group of small publishers has created a purchasing cooperative called the Integrated Media Consortium.
Alan Douglas, president of Douglas Publications, and Bill Walker, formerly an executive with B2Bworks, are the founders of the group. In addition to Douglas Publications, the charter members are Allured Publishing, Dowden Health Media, Edgell Communications, Farm Journal Media and National Trade Publications. IMC hopes to have 10 members by Jan. 1, and 23 by the end of next year, said Walker, who is the president of the venture.
The IMC, which was announced Nov. 15, is the brainchild of Douglas, the group's chairman. "This has been my vision since I initiated the Small Publishers Committee at ABM [American Business Media] in 1991," he said.
The main goal, of course, is to reduce costs for smaller publishers. Humphrey Tyler, president of National Trade Publications, is optimistic about the capability of the group to achieve that objective. "My expectations are moderate to high," he said. "Obviously, the objective here is to get some of the discounts that larger publishers get because of their volume buys."
The question, though, is where the consortium will generate savings. It has as a long-term goal helping small b-to-b, consumer and custom publishers save on big-ticket items such as paper and printing, but the immediate focus will be elsewhere. "I think we can get the savings on those products and services that tend to be commodities," Tyler said. "Those are things like laptop computers, hotel rooms, paper goods, cell phone services."
The focus on commodities—and not paper and printing—has left some potential members unconvinced of the IMC’s value and, more important, unwilling to buy a share in the concern, which costs in the neighborhood of $10,000, according to publishing executives who spoke on condition of anonymity. Additionally, because the relationship with printing and paper vendors is so service-oriented and central to their business, some smaller publishers are reluctant to cede that relationship to a third party.
Tyler agreed that finding savings in the paper and printing arena would be difficult. "We’re not joining this believing we’re going to get savings from our printers and our paper suppliers," he said. "That is the last thing on our minds."
At this point, Hoyt Publishing Co. is one company that is taking a pass on joining the IMC. "It looks like a really good idea, but it’s pretty different from how we’ve done business before," said Peter Hoyt, president of Hoyt Publishing. "We’re going to take a wait-and-see approach, but we’re very open-minded and hope they meet with some success."
Guy Wendler, chairman of Stamats Business Media, is taking a similar approach. "We’ve been approached and we are considering it," he said. He is particularly interested in saving money on benefits and health care costs. "We’d be very interested in that," he said.
"There are a lot of Missourians in publishing today: Show me," Tyler said. "And I don’t blame them."
A few voices among publishing industry vendors questioned the legality of the venture, but buying groups are well established in many industries. Walker pointed out that the newspaper industry has its own buying group (PAGE Cooperative), as do the dairy industry (Land O’Lakes) and hardware store owners (True Value).
"I think it’s a good plan," Roland DeSilva, managing partner of media investment bank DeSilva & Phillips, said of IMC. "Co-ops have been successful in many other industries. If it works, it will be very beneficial to them."