Monday, May 05, 2014

Maybe it's time to take another look at
alternative delivery

The largest printing company in the U.S., R. R. Donnelly, is looking at ways to provide alternative delivery of magazines in most major urban centres in the country. In an article in Publishing Executive, Thomas J. Quinlan, the CEO, says Donnelly is interested in a recent proposal in Congress that would allows periodicals, newspaper and unstamped mail to be placed in mailboxes on days when the US Postal Service (USPS) does not deliver. Right now, the USPS has a  monopoly on the nation's mailboxes. But it doesn't deliver Sundays and, pretty soon, it may not be doing Saturday deliveries either.

Now it makes a certain amount of sense for someone who depends in part on the mailing industry to look at gaining some advantage over other printers. The increases in the price of postage and the reductions in service open an opportunity.
“Look what USPS is doing to the mailing industry. It's just not sustainable. There's significant cost increases that they've put through. They're shifting cost to the players in the mailing industry, Quinlan said. “All these things, these are costs for the mailing industry that, quite frankly, we and other people like us have to go ahead and mitigate to our customers because our customers can't go ahead and aren't going to take the additional cost and look for people like us to, again, go ahead and mitigate those.” 
“You look at Ladies' Home Journal that was announced by Meredith earlier this week [would be shutting down]. I mean, 40 to 47 percent of their cost was related to postage. It was nothing to do with electronic content.”
If the USPS is really losing money on delivering magazines, as it claims, then it will be hard to maintain a dog-in-the-manger attitude when it comes to alternative delivery. In fact, rather than fearing the private sector setting up an alternative delivery system, it might welcome offloading the burden. Of course postal workers would see it differently.
For a few years during the early 1990s, two alternate delivery networks that used newspaper publishers to deliver monthly magazines to driveways and front doors grew rapidly. But USPS won the magazines back – and squashed the private services -- by introducing more rate incentives for efficient Periodicals class mailers.
In 2006 a pilot project was run by a consortium of major Canadian magazine publishers to test the possibility of having their magazines delivered to subscribers in major urban areas (such as the Greater Toronto area (GTA)) via  independent newspaper contractors. At the time, it was found to be too expensive. A year later, Rogers launched its own pilot project, but it was not ultimately successful. The Toronto Star and the Globe and Mail in 2012 entered into a partnership to distribute their newspapers -- and other print publications -- in Ontario. It's not known how that's working out. 

A very large proportion of Canadian magazine subscribers live in three places in Canada -- the GTA, the lower mainland of BC and greater Montreal; places where economies of scale are most likely. 

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