BIZ PUBLISHERS BRACE FOR PAPER, POSTAGE HIKES

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AVENTURA, Fla.-Buoyed by rising advertising fortunes, business publishers enjoyed their day in the sun, but many who gathered here at the annual American Business Press confab also saw approaching storm clouds from rising paper and postage costs.

"Compared to the last three or four years, most publishers are having very good years," said Roger Friedman, CEO of New York-based Lebhar Friedman, who nevertheless acknowledged "our margins are being squeezed" by the cost pressures.

Marshall Freeman, chairman-CEO of Miller Freeman Publications, foresees "steady, not spectacular advertising growth" in every area except medical publishing. He cautioned, "The strength of the underlying businesses are being overshadowed by the postal costs and the specter of further paper increases."

One bright spot: Paper analyst John Maine, VP of Resources Information Systems, Bedford, Mass., predicted a June/July paper hike will be the last one this year. Said Mr. Maine, "It will probably be modest, in the 4% to 5% range."

If publishers can find some solace now that the paper spiral is finally slowing down, there is no such relief in sight on the postage front. Small publishers are seething over the proposals in the pending rate case now before the Postal Rate Commission. The Postal Service is seeking changes that will end up boosting the mailing costs for small publishers by 17% while larger publishers end up getting discounts.

If the prospects in the ink-on-paper world proved unsettling, most publishers heard encouraging words on the high-tech frontier.

Burt Manning, chairman-CEO of J. Walter Thompson Co., New York, said trade magazine publishers are ideally positioned as content suppliers to the new media.

Amy Snyder, a partner in the Boston-based Baxter Associates urged publishers to form strategic alliances to ease them onto the superhighway. "Except for the largest and most deep-pocketed companies, alliances are the key to success," she said.

In other ABP news, Gordon Jones won the McAllister Fellowship Award. Mr. Jones, most recently retired as the president of the Professional & Book Publishing unit of Hearst Corp., is also a past president of McGraw-Hill Publications Co. The award honors lifetime achievements in business-to-business publishing.

Keith Crain, vice chairman of Crain Communications Inc., was elected to a one-year term as ABP chairman, succeeding Roger Friedman.

A heavier than usual flurry of rumors about mergers and acquisitions also kept publishers buzzing, but by the end of the three-day gathering very few of them materialized. In one of the few that proved real, Veronis Suhler Associates is set to release the black books of key financial data today for Shore Communications, a $19 million a year publisher of seven magazines including Sports Trend and Apparel Industry.

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