By: Jennifer Saba An upcoming increase in postal rates could severely impact the delivery cost of newspaper Total Market Coverage products. The Newspaper Association of America warns that a May 11 United States Postal Service hike will favor direct mailers over newspapers.
"The rates will place newspapers at a substantial competitive disadvantage to national and local saturation advertising mailers in which newspapers compete for advertising in local markets," said Paul J. Boyle, senior vice president, public policy at the NAA.
Newspapers use the USPS to deliver TMC products to non-subscribers, which contain inserts and coupons. The hike will raise prices by as much as 11% on those pieces. In addition, the USPS is offering an incentive program of deep discounts to national advertising mailers for new volumes.
The newspaper industry spent $800 million with the USPS in 2006, the last time the data was collected by the NAA. Boyle thinks that number is much higher now.
The Los Angeles Times, he said, sent out 3.5 million TMC pieces spending $30 million with the USPS last year. The Las Vegas Review-Journal sent out 583,000 pieces with an annual spend of $10 million.
"The USPS should not be in the business of picking winners and losers over rates," Boyle said.
Many newspapers are looking at private alternate delivery services that could cut costs on TMC delivery by 30%. However, only the USPS can deliver products in the mailboxes of households. The private services distribute the products on driveways, porches, or on doors.
Boyle said the NAA filed comments with postal regulatory commission. The NAA expects the commission to determine if the rates are illegal in a few weeks. If the commission declines to comment, the NAA plans to file a complaint, explained Boyle.
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