In the January 14 issue of BusinessWeek Magazine (yes, I do read things on paper sometimes...) Media Analyst Jon Fine predicts an oncoming Paper Media Apocalypse...
...Bear with me while I sketch out the structural changes in the paper market. In years past, publishers bought from a wide constellation of papermakers. So it was easier to play one supplier off another to get price cuts, and thus manufacturers' attempts at price increases often did not stick.
That state of affairs is over for the foreseeable future, if not forever, thanks to a wave of mergers that reached a zenith last year with the nuptials of Bowater and Abitibi Price, the top two newsprint players in the North American market. Private equity has consolidated ownership among manufacturers of coated paper which magazines use. ,
All these deals have dampened supply. Coated paper prices increased 10% last year, and further hikes are expected in '08. Newsprint prices will balloon 11% this year, according to industry tracker Pulp & Paper Week, although other observers are convinced prices will go even higher. The crowning irony is that this is happening even as dropping circulation has taken much demand out of the market, and thus the suddenness of the increases has surprised many.
This doesn't sound like good news to fans of paper comics. Or for the people who sell them. It used to be that people would suggest going back to the old newsprint style paper to save the industry, but now, even that might be too expensive.
Didn't DC and Marvel just go through a price increase last year? I wonder if they are prepared to go through another?