The recent clamor over whether a first-class postage stamp should cost 29 cents or 30 cents has obscured the fact that monumental rate increases for other mail classes are pushing the magazine industry closer to disaster.
Within the past month four consumer magazines have folded: Fame, Egg, Wigwag and Business Week's Assets. Certainly, the publishers of these debt-ridden titles knew that any hope they might have had for survival was shattered by the prospect of 22 percent second-class postal hikes striking at the heart of their bottom lines.This year will find other publishers facing the same reality: postal costs up, revenues down.
If you subscribe to a young, upstart magazine, do not be surprised if next month it just doesn't arrive.
Part of the problem is that while a 23 percent increase in postal rates had been expected since March, publishers anticipated cutting that rate hike by one-third. This would have been accomplished by privately (and thus less expensively) shipping larger chunks of mail from printers to local postal facilities.
However, the rate structure adopted this month by the Postal Service basically wipes out such "work-sharing" incentives. Publishers will now pay rates 1 percentage point lower than expected (22 percent instead of 23 percent), yet they remain stymied, unable to mitigate the overall damage.
What this means is that in the future, subscribers will be asked to carry the freight on their subscriptions - that is, pay postage and handling charges in addition to the cost of a subscription.
Also, with the price of direct mail going up by 25 percent, the cost of generating new subscriptions may become prohibitive. And in all likelihood the size and thickness of magazines will shrink, since in postal terms lighter means cheaper.
One magazine executive called the new postal rates "a crushing blow to publishers." No doubt they will also deal a crushing blow to readers, who will soon come to know that the free flow of ideas and information is less "free" than ever.
(Richard Thau is a senior editor of Magazine Week, an industry journal.)