Magazine publishers can’t blame the Internet for their latest problem: The price of paper, which accounts for 15% to 20% of their costs, is expected to spike by 20% to 25% next year, says AdAge.
Paper costs tend to be cyclical, but AdAge says the coming increase is different. It theorizes that this one is due to “structural changes, including mergers and a growing role for aggressive private equity.” Some publishers may try to raise subscription and cover prices, and if that doesn’t work…
The other obvious recourse, trying to pass costs along to advertisers, just won’t work well enough for everyone, said Malcolm Campbell, publisher of Spin. “It’s going to put some people out of business,” he said.
And he didn’t just mean the indies. “Don’t kid yourself,” he said. “There are a lot of large-publishing-company old titles that are very marginal anyway. You’re going to see a lot of icons going down if paper prices go up that much.” AdAge
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