USPS Adjusts Subscription Rate Threshold Down
In an age of "verified" circulation for consumer publications, an agreement was reached August 18th between the Postal Service and the Periodicals Advisory Group on a proposal pushed by consumer publishers to lower the qualification standard that measures the minimum of what subscribers must pay for a basic subscription rate from 50 percent to 30 percent. One immediate effect allows publishers more room to cheaply expand ratebase with free distribution.
The agreement caps about two years of discussion within the Periodicals Advisory Group — a committee made up of publisher reps and postal service members that meets regularly to hash out any issues having to do with mailing periodicals.
"The motivation came from consumer publications wanting to do some experiments to maintain or increase their ratebase," says David Straus, Washington counsel for American Business Media and a member of the Periodicals Advisory Group, adding that if a publication acquired too many subscriptions below the 50 percent cutoff they could lose their periodicals status. The new minimum will give publishers more wiggle room to play with subscription pricing while still meeting their periodicals status requirements.
The Postal Rate Commission has approved the proposal, which now awaits a rubberstamping from the Postal Service’s Governors to add the change to the Domestic Mail Classification Schedule. Straus estimates a few weeks for the changes to take effect. Once final, says Straus, "the qualification standard will be that 50 percent of the recipients must have paid at least 30 percent of the basic subscription price."
Straus adds that the impact will not be felt as much in the trade community, which is largely comprised of requestor publications. Those that do charge a subscription price, guesses Straus, don’t typically offer multiple pricing levels, making the rate ruling moot.
Yet for consumer publications, the greater pricing flexibility may have far-reaching subscription implications as publishers continue to wrestle with spiraling expenses tied capturing and maintaining readers — not to mention the new verified rules set forth by ABC. Straus hints at a potential trend-the-making: "I’m not saying it’s going to happen, but [the new rate rule] isn’t there so they can raise their prices. It’s there so they can lower them. And at some point, consumer magazines, some of them anyway, may decide that requestor is the way to go."