ICT and e-Business in the Pulp, Paper and Paper ... - empirica

Pulp, paper and paper products
Although this development cannot simply be projected to the emerging economies of
today, such as the "BRIC" countries (Brazil, Russia, India and China), it appears
reasonably safe to assume that demand for paper will rise significantly in these countries
in parallel with the overall economic growth and industrialisation. Thus, on a global scale,
paper demand will probably increase substantially over the next 10-20 years, particularly
in Asia.
The environmental implications of this anticipated development are globally relevant and
should be a serious concern for international policy, considering the critical role of the
P&P industry in this respect (see Section 2.2). They are not discussed in this report,
however, as ICT and e-business cannot make a significant contribution to ease
environmental effects of paper production.
The key point for this study is that growth in the emerging economies is probably the
single most important factor governing the global demand for pulp and paper, towering
over all other factors such as substitution of paper products through ICT based services.
Substitution effects of the internet
Substitution effects are most significant in the daily and weekly newspaper markets. A
large proportion of their classified advertising is migrating to the internet. As a result,
the number of commercial pages (average volume) of newspapers is decreasing as well
as the total circulation. This concerns tabloids and quality newspapers, as well as the
special market segment that has entirely focused on classifieds. For example in the used
car and real estate markets, prior to the internet, a broad variety of special magazines
and free papers provided platforms for these markets; to a large extent, the same
functionality is now offered by marketplaces on the internet. Circulation of free papers of
this type has diminished.
Effects are most pronounced in the USA, but can also be observed in the European
newspaper market. A study by the European Publishing Market Watch on the European
Newspaper Market (2004) 106 concludes that "circulation is either static or falling in most
EU member states, and has been for some years. Declines are steady rather than
dramatic."
The fundamental change in classified advertising also creates pressure for standard
newspapers. First, they are losing a part of their former income, as fewer classifieds are
placed in newspapers. Second, it has also implications for the attractiveness of the
product. Classified advertising used to be an important content and buying motive for
many readers. The loss of this functionality contributes to the decrease in total circulation,
as some people stop buying newspapers if they are no longer the primary source for
"market intelligence" in the form of classifieds.
However, as it is certain that classified advertising is migrating to the internet, publishers
are adapting to this situation. In fact, statistics published by the World Association of
106 Cf. European Publishing Market Watch, Sector Report 1: The European Newspaper Market
(2004), p. 7; p. 90f. See www.publishing-watch.org.
150