National Associations
Distribution has long been a headache for media owners, who regularly face rising postal rates and biter union or legal disputes. Then there’s the logistical challenges of delivering magazines to the back of beyond. The North American experience will seem familiar to many...
Returns to sender
economic meltdown and the digital delivery explosion that triggered the decline in CPC’s addressed letter mail business. Today CPC is bleeding, and not just operationally. It has a CAD$5.6bn unsecured employee pension liability. It is speculated that Green was set to privatise CPC but the minority government of the day balked. What will CPC do now? CPC aims to be the leading 21st
century
“Is there a future for Canada Post delivering Magazines?” Mark Jamison, CEO, Magazines Canada
elcome to Canada, through the eyes of a print magazine circulator. This is a nation with a massive geography and a small population: the population density per square kilometre is 3.7 (by comparison, India’s is 400 and the US, 34). Although 81 per cent of the population is considered urban, in Canada, urbanisation really means suburban sprawl. There are also extremely remote areas. Every year we have a few months of summer and about 18 months of winter. Canadian magazines also contend with foreign competition on the newsstand, where home-grown titles have only 15 per cent of total newsstand sales due to the impact of foreign magazines. But Canada’s magazines have 85 per cent of all print subscriptions in the country. Why? Canadians love Canadian magazines and magazine circulators are superlative direct marketers. It is in this environment that publishers are trying to work with their principal print delivery service, Canada Post, a Government of Canada crown corporation. Canada Post (CPC) can deliver to places so remote digital services are not available. Of course magazines have challenges with CPC when it comes to rates and service standards. The annual rates over the last decade have exceeded the consumer price index, often dramatically. However, most users agree that CPC is doing a good job. But the question is for how much longer? Under former CEO Moya Green (who now heads the Royal Mail in the UK), Canada Post was profitable by 2008. We then entered the
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physical and digital delivery service. In particular, it wants to be the parcel delivery of choice for consumers and retailers. It can back this up with a network of retrieval options, such as its growing number of pharmacy-centred outlets. Furthermore, about 70 per cent of Canadians do not have door-to-door mail delivery, and CPC plans to phase it out in the rest of the country as well. In place of door-to-door service, walk-to ‘super boxes’ are now being made more parcel-sized. Changes to delivery are among many that CPC is introducing over the next five years. But there remains the big moose in the room—the pension liability for which CPC cannot expect relief from a government managing its own staggering pension liability. CPC has been very open about its plan to address the need to bring its labour costs in line with its competitors. This is to be accomplished in a corporate space where the relationship with its principal unions is based upon decades of acrimony. Publishers are using other systems now. More are being tested. Beyond the turmoil that hinders CPC, there is the math. Evidently the cost of delivery at CPC is roughly $37 per-hour. Some private delivery services associated with
newspapers claim rates starting at $20 per- hour. That presents a considerable margin to manage customer experience while saving a great deal of money. Canadians want their Canadian magazines, and publishers must respond in cost-effective ways for the long haul. Will 2014 be the tipping point to alternative delivery in Canada? At the FIPP World Congress in Toronto (13-15 October 2015), we may well have the answers.
See more about Magazines Canada’s initiatives at:
www.magazinescanada.ca
“It’s back to the table...” Mary Berner, president and CEO, MPA – the association of magazine media in the US
which regulates the US Postal Service (USPS), announced its approval of a temporary, two-year “emergency” rate hike, resulting in a six per cent increase in postage rates, more than triple the rate of inflation. In filings made at the PRC, MPA, along with a coalition of mailers, we argued strenuously against the significant rate increases, declaring the decision “counterproductive”, with its consequences having “ripple effects through our economy – hurting consumers, forcing layoffs, and impacting business” and doing nothing to fix the Postal Service’s problems. While the decision was
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very disappointing, MPA was gratified that the Commission made the increase temporary, and did not increase underwater classes more than the average, instead leveling the surcharge “across the board” – all positive outcomes for periodicals. While mailers were disappointed, so too was the Postal Service, which expressed its dismay with the “split decision”. At press time, both the MPA and the
USPS were considering filing appeals in late January, with the former committed to working with Congress to find a sustainable long-term solution to the Postal Service’s challenges. See MPA’s initiatives at
www.magazine.org
If your organisation represents the interests of magazine media companies in your country, and you’re not a member of FIPP, contact
Cobus@fipp.com to see how you could benefit from our network, or visit
www.fipp.com/membership.
fipp.com issue 81_2014 | Magazine World |49
n 24 December 2013, the Postal Regulatory Commission (PRC),
fipp member
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