The Nation Seeks Donations to Pay Ballooning Postage
The Nation, a 186,000-circulation political weekly, has recently begun soliciting its community of readers to help pay for its looming $500,000 postal bill. That price tag represents an 18 percent increase in postal rates that took effect this month;the industry average was estimated at 11.4 percent. According to The Nation president Teresa Stack, her magazine’s more dramatic rate increase is indicative of what smaller, independent magazines are experiencing.
The magazine’s weekly frequency has made it difficult for Stack to exploit distribution efficiencies such as co-mailing and co-palleting. "Our first experience was it was a disaster and no weeklies at our printer are co-mailing, the delivery compromises are too extreme," she says. "If you’re a monthly or bi-monthly obviously you have more options. The weeklies are getting killed."
Stack says the bulk of the $500,000 charge is attached to second class postage, and that it was a simple decision to turn to readers for help. "If you raise rates you get lower circulation, it’s a real balancing act. So it was a natural for us to say to our readers this is what we’re facing, can you help us?" she says. So far, contributions have gone beyond Stack’s expectations, with a core group of about 30,000 subscribers called The Nation Associates contributing over $270,000. However, Stack says this might be as far as it goes.
The Nation’s language in the fundraising campaign hit the postal regulators hard, saying they accepted a "scheme" pushed through in part by lobbyists for Time Warner that favored big publishing. Indeed, the big publishers don’t seem to be having difficulty participating in any of the distribution efficiencies that some smaller publishers are, but Jim O’Brien, VP, distribution & postal affairs at Time, Inc., who was unavailable at presstime for this article, noted in a BusinessWeek story that publishers that are mailing efficiently are subsidizing the publishers that aren’t "to the tune of 60 cents on the dollar."
Stack hasn’t been sitting idly by, however. "Nothing that we’ve looked at so far is going to save us money and give us reasonable delivery. We did scenarios prior to the rate increase;could we drop-ship, could we co-mail, could we co-bind with another magazine, and we’re constantly looking. But the delivery delays and the potential partnerships at our printers are just not there," she says.
David Straus, postal counsel for ABM, argued against the Time Warner proposal earlier in the year noting that it would hurt small-to-mid sized publishers who couldn’t take advantage of distribution efficiencies that the larger titles could. "The new rate approach indeed hits very hard those medium-sized and small circulation publications that cannot go into a co-mail program," says Straus.
Though the USPS sided with Time Warner in forcing the hand of smaller publishers, whether the distribution infrastructure is there or not. "My belief is that the Commission did what it did, and the USPS allowed the rates to go into effect without challenge, in part because despite the evidence they adhered to a view that if there’s the demand, there will be a supply. And in part because they believed that, even if some publications are forced to absorb very large increases, the time has come for them to bite that bullet and end what Time Warner, MPA and others have claimed is a cross-subsidization within the periodicals class," says Straus.