Saturday, March 27, 2010

Washington Post's New Magazine Will Bypass USPS

In what may be a troubling precedent for the U.S. Postal Service, The Washington Post is about to launch a paid subscription magazine that will bypass the USPS delivery network.

Capital Business will be delivered each week to paying ($49 per year) subscribers along with their Monday copy of the Post, according to the Post’s announcement. The move suggests that the country’s newspaper industry may be ready to try a new twist on a strategy that failed in the 1990s -- competing with the Postal Service to provide home delivery of magazines.

Two networks of daily newspapers delivered a variety of consumer magazines in their home markets during the early and mid-1990s. At the time, the delivery systems for most daily newspapers (kids on bicycles using marked-up address lists) were not suited to delivering a specific package to a specific customer, so the magazines were rarely delivered along with the newspaper, a former insider tells me.

The struggling efforts collapsed when the Postal Service restructured Periodicals postal rates to encourage worksharing (such as dropshipping), which led to lower postage costs for many publishers.

But times have changed. Postal officials want to return to the practice of increasing Periodicals postage prices much faster than the rate of inflation. Newspapers have learned to deliver several products through their daily carrier network -- already capturing a significant portion of The Wall Street Journal delivery business from the USPS. And customers have become accustomed to having publications delivered to their driveway rather than their doorstep.

With major newspaper companies like Hearst and the Washington Post Company (which owns Newsweek) also publishing magazines, finding a critical mass of newspapers and magazines willing to follow the Post’s lead would not be difficult.

Getting heavily into magazine delivery would require further enhancements to newspapers’ delivery systems, but the Postal Service seems unlikely to undercut them this time around. Postal officials believe they are losing money on Periodicals, though in reality the Postal Service would be even more unprofitable without them -- especially without the large consumer magazines that tend to mail most efficiently.

Another unusual feature of Capital Business, which will focus on the Washington area, is that it “will be available only to subscribers of The Washington Post,” according to the magazine’s Web site. And its content will apparently be available on the Web only to the magazine’s subscribers.

For more information about Periodicals postage rates, please see:


B said...

The USPS already gave away parcels and express mail. Why not give 2nd class away? Also by cutting back on mailboxes,collections,stamp machines and window clerks they seem poised to get rid of first class. That will leave the PO with nothing but junk mail and whatever UPS and FED-EX don't want.

Anonymous said...

The Post would be smart to work jointly with the Postal Service to create a hybrid product for newspapers and magazines. The service from the Post does nothing to increase circ, which is what they really neeed.

Anonymous said...

If the newspaper delivery people followed the same delivery rules as USPS (i.e. drive on the correct side of the road not the dangerous practice crisscrossing road) they would find it takes twice as long to deliver their product.

Anonymous said...

Let me find one in a mail box with no postage and that customer will never recieve it.It will be returned to P.O.---NOT IN MY BOXES!

Anonymous said...

I wonder how many USPS employees live in the eastern part of the US where the majority of the Posts readers would naturally be? If the USPS employees and families and friends were smart they would return the favor to the Post. I doubt that would ever happen though.