Over the last 15 years I have read countless studies forecasting the end of various parts of our industry. Newsprint and graphic grades have most often been on the critical list. I'm sure I've been one of the doom-merchants, but the industry's ability to adapt and respond to changing markets has always impressed and surprised me. But, this time, is newsprint really in decline?
These thoughts have been provoked by two recent experiences. The first was in April when I was an observer at a London seminar run by the strategic managers of Rupert Murdoch's News International group of newspapers. The second experience was buying an out-of-print book over the internet. I was told it would take a few days to print and deliver. I asked some questions and it was clear that the book would be printed as a one-off order, exclusively for me. It was also cheaper to buy than the advertised volume. And this was, now, common practice in on-demand publishing. Readers of PaperAge will draw their own conclusions from this service.
The newspaper seminar was disturbing. All the managers were worried that fewer young people were reading newspapers. Older readers die. Just to stand still, each newspaper must win thousands of young readers every year. But the young are turning to new media, rather than newspapers for their information and entertainment.
In a sample of 1,000 15 to 24-year olds in the1960s, 800 said they bought a newspaper. Forty years later 200 of them say they no longer do so. In the 1970s, only 500 15 to 24-year olds bought a newspaper and more than100 of them had given up newspapers by their mid-20s.
There are many reasons why younger readers are no longer drawn to newspapers. Murdoch's planners suggested that potential newspaper buyers have less time, less need, less interest and less opportunity to buy newspapers, and newspapers are less important to them.
Television, radio and cinema are newspapers' obvious rival attractions. In the last five years, nearly every school in the UK has been linked to the internet. Most children now realize that they can learn more online than from newspapers. This generation now reads newspapers mainly for entertainment. Magazines and TV have been more astute than newspapers in bidding for young readers or viewers.
This is not surprising to our industry. But the generation now in its teens and 20s will be in its 30s and 40s by 2020. What will they be reading?
What next for newsprint?
I'm sure that all this worrying stuff is well known to newsprint manufacturers. And the figures for newsprint demand reflect the trends. In 2001 and 2002 in North America, 1.06 million tonnes of capacity were shut down due, in part, to a fall in advertising, but changing reading habits also played a part. The decline in newsprint prices dropped $175/tonne to $450/tonne on both U.S. coasts. Europe and the UK did just as badly. In 2003 British newsprint production fell by 4% to 1.05 million tonnes-this was the level reached in 1998. Across Europe newsprint production remained static at 10 million tonnes.
In these circumstances, are we likely to see any more giant newsprint mills built in Europe? Stora Enso's 400,000tpy mill at Langerbrugge in Belgium (the world's largest mill in one of the smallest countries) started up last year and is performing well. The main problem it faces is that the regulators regard the mill as a waste treatment plant.
I do not expect newsprint manufacture will entirely disappear. But, if these trends persist there will almost certainly be a declining demand for newsprint. In Europe, newsprint consumption is number three after packaging and graphic papers, and the gap between three and the top two is widening.
So the demand will fall, newsprint manufacturers will go out of business or merge into fewer but bigger units, no more giant mills will be built, and the industry will have to look elsewhere or make other products. I've heard China mentioned as the salvation of hard-pressed Western manufacturers. But that country's 1.2 billion population is mainly served by the party organ, The People's Daily, which has a comparatively minute circulation of 4.5 million. I don't believe that China is the answer to the problems facing our newsprint manufacturers.
We face social and cultural changes which newsprint manufacturers need to embrace; and newspapers seem to be challenged by these changes. So would it help if newsprint and newspaper managers got together to seek solutions?
