1. We Read America Hearst Magazines Building the Prepress-Printer-Publisher-Paper Supply Chain Infrastructure February 13, 2003 Amre Youssef Director of Publishing Technology Hearst Magazines

2. We Read America Hearst Magazines

3. We Read America Hearst Magazines Publishers’ Points in the Supply Chain Digital Photographers Advertising Agencies Agency Prepress Publisher Prepress Printer Paper Mill Aggregators Web Content Distributors Electronic Magazine Distributors

4. We Read America Hearst Magazines Text Layout PUBLISHER Final Pages Printer Points in the Supply Chain Digital Capture PAPER Agency Prepress Agency Stock Photo Asset/Content Management System Prepress Distribution Production

5. We Read America Hearst Magazines Points in the Supply Chain International Image/Ad Repository Aggregators Lexis NYTSyndicate ProQuest EBSCO GaleGroup E-Distribution Zinio Newstand.com Qiosk PDAs Classifying Link Rights Link MIC Distribute Final Pages Web Site

6. We Read America Hearst Magazines The Major Pains Publisher is at worst point of the chain: highest liability and least control Publishing most data intensive and least automated Great deal of manual procedures Limited exercise of industry guidelines/standards Limited leverage of existing technologies Limited control of creative process Poorly defined liabilities across the supply chain with our partners

7. We Read America Hearst Magazines PAINS Digital Photography Newest addition to the supply chain Varying file format (raw vs. JPEG) Varying color space sRGB, Adobe RGB File size: Handling Gigs of data for single shoots Resolution - data for color management Each mandating a separate workflow Searching for image information –Caption, photographer, agency Linking information to rights –Digital asset and paper contract

8. We Read America Hearst Magazines PAINS Stock Photo Agency Resolution File format Color guidance Color management Metadata –Name –Date –Copyright –Licensing information –Model releases

9. We Read America Hearst Magazines Digital Photography DISC guidelines –Digital Image Submission Criteria Guidelines for digital photography Print-specific guidelines for photographers Potential leverage with stock photo agencies PRISM standards –Publishing Requirements for Industry Standard Metadata Controlled vocabulary for magazine publishers ERI Technology (Kodak) –Extended Range Imaging for file file format, size, color correction Post capture compensation Print Media Gazette. March 2003 Help is on the way...

10. We Read America Hearst Magazines Digital Photography Hearst pilot DAM/DRM (feb-jun 03) –Standardize on rights language from > 200 to 7 definitions –Automate contract generation (MIC) –Electronic contracts/ model releases (PDF) –Establish consistent internal file naming convention for all files images and edit layout –Link contracts/releases to original asset/article in an asset management system (XML) –Use PRISM language for consistent digital rights vocabulary –Pilot on three publications of high international distribution

11. We Read America Hearst Magazines PAINS Agency No link between job information and the digital content between ad agency, publisher, printer Time consuming changes and revisions in coordination and reconciliation of orders Billing discrepancies Re-key of data Tracking submission and arrival of insertion order –Faxes, e-mail, v-mail –Average 2-3 revisions per ad

12. We Read America Hearst Magazines Agency SPACE XML and JDF –Specifications for Publisher & Agency Communications Exchange XML –JDF - Job Definition Format Standard –Space reservation –e-insertion orders – Job tickets –Change order and confirmation

13. We Read America Hearst Magazines PAINS Agency A key point of potential increased efficiency in the chain Implementation is complex –Analysis and process re-engineering at corporate level –Translator to interpret XML support across all points –Reconstruction of databases Requires high-level approval as it impacts cross-departmental efficiencies –circulation –advertising –finance –manufacturing –sales

14. We Read America Hearst Magazines PAINS Agency But didn’t we try this before? - Yes. Learn from history –Must be Initiated by publishers (forget the chicken and egg issue) –Requires collective support by the publishers –Required critical mass Forced dual workflows that drive up costs –Plan for a comprehensive but gradual implementation –Must use open standards

15. We Read America Hearst Magazines Publishers’ Consortium - Pilot Initiative Agency Demand standards (SPACE XML / JDF) –Facilitate deployment –Specifically defined to publisher’s needs –Continually modified to meet our changing needs IDEAlliance acts as prime contractor IDEAlliance provides mechanism to work with appropriate vendors The Consortium –Establish a pilot of a single publisher adopting SPACE XML / JDF –Initiative funded by publishers –Agencies provide operational support –Get all members of the supply chain involved (incl client) –Develop ROI shell to help determine internal inefficiencies (16-18%) –Remember: Most publishers lack support infrastructure to properly deploy XML Establish Proper Expectations: the long haul –ad production - linking I/o and digital ad –Next billing systems (AIS), sales, manufacturing, circulation

16. We Read America Hearst Magazines Paper Manufacturers Hearst Enterprises –Paper supply and physical inventory management Magazines Newspapers Trade publications Hearst strictly utilizes EDI since 1996 Hearst uses a proprietary system built on EDI X12 Hearst prefers direct relationship with the suppliers –not a currently a member of papiNet

17. We Read America Hearst Magazines Paper Manufacturers Incomplete standards adoption across the board –Non-complaint back-end systems Creates inefficiencies in invoicing Shipping notices Manual effort to process exception reports More pronounced after recent mill consolidations High costs: safety stock in inventory and paper waste –Move toward empowering mills to manage inventory through the press –Share safety stock with other publishers PAINS

18. We Read America Hearst Magazines Printers Lack of integration to our existing workflows New debates on file formats: vector vs. raster Manual processes associated with Flat plan systems Identifying Web Service tools to enable the process –Share real-time page status information with printer –Tracking work internally and tying to back-end systems PROSE XML. Lack of clarity of responsibilities between publisher and printer in regards to imposition PAINS

19. We Read America Hearst Magazines PAINS Syndication Low revenue in secondary licensing Manual task of tagging content, “De-Quarking” Tools that facilitate the process –Still at investment and time compared to revenue Legal departments get very nervous about syndication High cost of internal development of DTDs - rules for naming Late delivery to aggregators Work out errors in mapping content with each aggregator Syndicator-subscriber transactions are not automated

20. We Read America Hearst Magazines Syndication PRISM - DTD specific to magazines and aggregators –Recently released –One DTD for multiple aggregators PDFx - file format for e-magazines, PDAs ICE - Information for Content Exchange –data transfer and delivery protocol, syndication relationship, Use of web services (ICE) RESOLVES

21. We Read America Hearst Magazines What We Need Internal house cleaning: no more islands More collaboration with other publishers Pull standards together, less overlap Simplify XML deployment Clearer definitions of liabilities Complain less and do more

22. We Read America Hearst Magazines Thank You