U.S. newspapers struggle with rising newsprint costs
By Alexandra Zeumer, Monday 24 March 2008 at 17:02 :: Printing & Production Systems :: #1438 :: rss
As demand for the paper newspapers are printed on shrinks, the cost of that paper is on the rise in the United States, The Wall Street Journal reported last week.
Paper companies spent much of 2007 idling the machinery used to make the paper, and sometimes even having to sell that machinery. This decrease in supply means paper companies have more power over pricing their products, and have turned to raising prices in the face of shrinking demand and revenues as readers turn to online.
Prices have increased by US$60 to $620 per metric ton, up from their October 2007 low. And as paper companies struggle with less demand for their product from the newspaper industry, the price hike is yet another obstacle for newspaper publishers struggling with declining circulation and advertising revenues, according to The Wall Street Journal's Wednesday article.
Media industry analysts estimate newsprint accounts for 20 percent most newspapers’ overall costs.
“Definitely the trend has been deteriorating for a long time, but it’s gotten worse in the last year, ” J.P. Morgan analyst Claudia Shank Hueston told The Wall Street Journal. “We keep thinking that at some point things are going to get better. Newspapers have gone to narrower pages, lighter-basis-weight paper, and we keep thinking that those sorts of declines will run their course or at least decelerate. But that hasn't happened yet.”
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