Thursday, May 25, 2006

Fox postal report makes grim reading

Michael Fox, the acknowledged industry expert on Canadian postal matters, has released another of his periodic reports on Canada Post pricing. Fox is Senior Vice-President, Circulation and Development for Rogers Media. And this one is, like others, a shocker; in addition to providing a detailed analysis of the post office's rate card and increases, it reports the indifference (bordering on contempt) that Canada Post President Moya Greene has for the industry* and predicting that the contribution margin magazines will be paying will have reached 34% in 2006. You can read the whole report, dowloadable as a pdf file, at the Magazines Canada website.

*It is reliably reported from multiple sources (not Fox) that Greene, at a recent meeting with senior industry executives, told them that their non-publication mail (renewals, direct mail etc.) is so insignificant to her that she regards it as "a rounding error".

(It doesn't seem to be doing the industry much good to have former Maclean's editor Anthony Wilson-Smith advising the CPC president on communications strategy.)


Anonymous joyceb said...

Grim reading indeed, but not without Fox's trademark wit. Favourite line:

"Being based in Ottawa, CPC executives assume that increasing rates is the only way to increase margins."

4:31 pm  
Anonymous Anonymous said...

Rogers, Trancon, Quebecor & Readers Digest consume 70% of the PAP publication subsidy. Why should the taxpayer take their burden? M. Fox is a paid to lobby for Rogers. (Great job if you can get it.) His only creativity lies in his myopic presentation of the figures.

7:29 pm  
Blogger Jon Spencer said...

It ain't the publishers' burden, it's the public's. For whatever reason, the Canadian populace reads more of the magazines that those 4 companies produce than all the other magazines combined. Ours is not to reason why ... ours is just to shrug and deal with it.

The PAP subsidy helps reduce the cost that publishers would have to charge readers if they bore the full (roughly + 100-200%) cost of what Canada Post charges to deliver magazines to readers.

In its absence, it's not like the large publishing firms would simply decide to earn less profit. That's not quite how things work, I'm afraid. An awful lot of readers would simply have to pay more.

I think the general principle behind all this is that reading is good.

9:33 pm  
Anonymous Anonymous said...

Interesting read, but the bigger question should be to what extent should the Goverment be subsidizing the publications industry. Even by Fox's own figures, Canada Post gets less margin from Publications (including the subsidy share) than it gets from its core letter service. In other words, regular postal users are carrying some of that burden. From my read, what the Feds don't give as a subsidy to Canada Post, regular mail users have to foot the rest of the bill. I'm not sure if I support that form of cross-subsdidy.

9:24 am  

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