Magazine article Folio: the Magazine for Magazine Management

Publishers Seek Solutions as USPS Nears Brink: Postmaster General Will Try to Avoid Rate Increases, but Makes No Promises

Magazine article Folio: the Magazine for Magazine Management

Publishers Seek Solutions as USPS Nears Brink: Postmaster General Will Try to Avoid Rate Increases, but Makes No Promises

Article excerpt

The United States Postal Service is teetering at the edge of collapse, and magazine publishers--almost completely dependent on the postal service--are desperately looking for answers.

The challenges are enormous. Publishing companies face a massive shift in consumer habits online, but revenue isn't following nearly as fast as the reader. Consequently, print-magazine revenue remains a key to the economics of most companies. These topics and more were discussed in January at the MPA's first-ever Postal Summit, held in New York. The keynote was Postmaster General Patrick Donahoe.

In a discussion of what a smaller, slower and possibly more expensive postal service would look like, People managing editor Larry Hackett laid out what would happen if delivery service went from six to five days.

"We're closing by Tuesday afternoon and we're generally on sale in major transit hubs by Wednesday morning," he said. "We aim to have 70 percent of our subscribers have a copy by Friday evening. Customers expect to get their magazines at a certain period of time. If you start disappointing them, they may stop subscribing."

NO PASS-ALONG PRICING

Nina La France, vice president of consumer marketing for Forbes Media, was asked by Hearst Magazine EVP John Loughlin if a publication could pass postal-rate increases on to customers.

"Our calculations show it wouldn't be unusual for us to see a fall-off of 10 percent if we raise prices, or a falloff of 20 percent when you hit certain pricing tiers," she said. "The challenge is getting people to pay more for content. In this day and age it is exponentially harder than it's ever been. Add to that the opportunity to get free information online, you've got this sort of confluence of things that can get harder and harder for us to pass along those higher prices. …

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