Periodicals Postal Rate to Increase by 9.9 Percent

By Giordano, Kevin | Folio: the Magazine for Magazine Management, December 1, 2000 | Go to article overview

Periodicals Postal Rate to Increase by 9.9 Percent


Giordano, Kevin, Folio: the Magazine for Magazine Management


Publishers view the decision as more a relief than a victory.

Magazine publishers will see a postal rate hike of 9.9 percent for periodicals. The increase, announced by the Postal Rate Commission in mid-November, is a small victory for publishers who lobbied hard against the double-digit hike originally proposed by the USPS last January.

The proposed 15 percent increase would have had a huge impact on the industry. Previously, the Magazine Publishers of America estimated that both consumer and business-to-business publishers would incur a $300 million increase next year, based on the $2 billion the industry will spend in 2000, according to the USPS. The 9.9 percent decision brings that figure down more than $100 million, to $198 million. (See box, above.)

According to David Straus, counsel for the American Business Media, the increase represents an $8 million savings for ABM members, compared to the projected cost increase at a 15 percent average rate hike. Speaking at the ABM Top Management Meeting in Chicago, Straus indicated the Standard A rate (for direct mail) will see a 6 to 7 percent increase. At this point, he said, the industry's best guess is that the increases will go into effect January 10.

Gordon Hughes, president of American Business Media, adds that, having calculated the numbers, b-to-b publishers are actually facing a 9.7 percent increase.

"We are gratified that we succeeded in getting such a large percent of the increase knocked off," says Jim Cregan, executive vice president of government affairs for the MPA.

Straus says the decision comes more as a relief than a victory. "It could have been much worse. We're certainly happy the rate commission cut it down to single digits," he says.

The magazine industry fought the increase through a $10 million lobbying effort, which documented the financial impact of a large increase on all segments of the industry.

Publishers felt an increase in the 6 percent range--while still above the inflation rate--was fairer. In September, Cregan told "FOLIO: First Day" that the MPA sought a 7 percent increase, at most. …

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