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Update from newspaperland, tariff edition

A few months ago I previewed the near future of the newspaper industry.

I wanted to share a material update regarding tariffs on newsprint and how the subsequent COGS increase is wreaking havoc on already precarious newsco budgets.

In January, President Trump instituted a tariff as high as 10% on Canadian paper, which is used by up to 90% of the publishing industry. Commerce Secretary Wilbur Ross claimed that Canadian paper companies were receiving subsidies from the Candian government and the tariff was conceived to help level the playing field.

Whether the consequences were intended or not, I couldn’t fairly speculate. But the impact has begun to manifest itself in further rounds of cuts and reductions at local newspapers. This morning the Tampa Bay Times announced that it would be cutting 50 jobs in response to the increased costs:

Times Chairman and CEO Paul Tash had already said the tariffs could cause layoffs by adding about $3 million in newsprint costs.

In a column published in March, Tash added more nuance to our understanding of what’s happened in the paper market.

Other American manufacturers opposed these tariffs because they know they will damage newspapers and reduce the demand for newsprint. But now that the tariffs are taking effect, the American companies are hiking their own prices, so we have little room to shop around.

He also noted that the cost increase was yet another impetus to revisit all standing contracts, like comics and columns.

In a period where cash flow is king, necessary to make reinvestments in digital, this contraction is surely being felt in the C-suite as 2018 financial plans deviate from projections. But what’s worse–as well know–this stress will fall disproportionately on the working journalists in the newsroom. Those souls face a difficult decision of leaving the field (or at least local news) or coping with deep uncertainty regarding their job security.

My next move is all about creating an API for these individuals to plug into, giving them the back office and technology required for local news startups. I see a future where news companies begin to mirror what happened in the restaurant industry. Gordon Borrell is wrong. The end game of print is nigh, but we are still in the very early stages of digital. Onward!

Philly Publishing – the technical partner for indy publishers

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Here is a copy of my presentation and prepared remarks from WordCamp for Publishers 2019 in Columbus.

Chris Gethard & Mal Blum – Crying At The Wawa (Official Video)

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