POSTAL RATE REVAMP IRKS NEWSPAPER INDUSTRY; AT SAME TIME, RECLASSIFICATION WILL EASE BLOW ON TRADE TITLES

By Published on .

The Postal Rate Commission's general approval of the U.S. Postal Service's proposed reclassification and rate restructuring pleased magazine publishers but rankled the newspaper industry.

With paper costs rising steadily over the last two years, postal hikes have added to publishers' burdens.

The commission's recommendations, still subject to review by the governors of the Postal Service, rejected dividing small- and large-circulation publications into separate mailing categories.

Large, presorted titles will see an average rate decline of 3.7%, rather than a 14% drop. The average increase for magazines otherwise handled will be 3.5%.

If approved by the governors, the new rates could go into effect in the third quarter.

The planned division had been a bone of contention among executives at smaller titles.

The original proposal recommended creation of a publications service subclass for mailers that sorted more than 90% of their mail to three or more ZIP codes; those mailers would save 14%. Magazines that didn't qualify, often smaller trade or opinion journals, would have seen 17% hikes.

SMALL PUBLISHERS WIN

"Derailing the reclassification proposal that would have split the magazine community in two was a victory for small publishers," said Victor Navasky, publisher-editorial director of The Nation.

American Business Press President-CEO Gordon Hughes said trade publishers that could have faced the 17% increase were "generally thrilled." And the Magazine Publishers of America expressed support. But Newspaper Association of America President-CEO John F. Sturm labeled the commission's approval "a sorry commentary," noting that it will result in "lower rates for bulk advertising mail that generally ends up in the wastebasket and higher rates for first-class mail."

6.5% HIT FOR PAPERS

Based on the commission's estimates for typical publications, reclassification would raise rates at some national newspapers by 6.5% while lowering rates for typical newsweeklies by 10.7%. The new plan would also lower rates on many third-class mail categories, including selective advertisements mailed as letters, down 6.6%; or flats, down 3.1%.

Any damage to newspapers would come from changes benefiting rivals, such as targeted direct mail and newsweeklies, said newspaper analyst Kenneth T. Berents, director of research, Wheat First Securities, Richmond, Va.

In this article:
Most Popular