Friday, August 31, 2018

Though newsprint tariffs are gone, printing and delivery costs are still heavy burdens for newspapers

Though the Trump administration's newsprint tariffs have been reversed by the International Trade Commission, "It’s essential to understand that they represent only a small part of the problem that daily newspaper publishers now face," Ken Doctor writes for NiemanLab. Doctor is a news industry analyst and former vice president of Knight Ridder Digital.

For one thing, newsprint is still pricey; the tariffs were responsible for only 30 percent of the recent price increase. Newsprint producers were responsible for the other two-thirds of it, hiking the price "because they could," Doctor writes.

It's unclear whether the price hikes will stick, especially since the face of the industry has changed in recent years: "Publishers use maybe a third of the newsprint they used in the year 2000, according to industry analysts," Doctor writes. "That means the mills themselves, as suppliers to a receding industry, have consolidated. There are fewer owners, fewer mills, and less supply. Consequently, publishers who might have tried to play three suppliers off against each other in days gone by no longer can."

The tariffs, which caused many papers to cut pages and sections, made the problem worse: "As publishers cut back on newsprint, cutting sections and pages, they worsened their value proposition with their best and most loyal, high-paying customers: their print subscribers. Even subscribers who were loyal for decades are cancelling," Doctor writes.

Publishers are trying to shift away from print revenues but still depend on them. "And so we have expense cuts, which will only deepen in 2019," Doctor writes. "Newspaper companies have been cutting expenses literally for a decade, and it’s not clear how much more there is to cut."

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