Last June, Bloomberg BusinessWeek announced to Washington DC subscribers that it was switching to alternative delivery. (See: BussinessWeek Fires the Postal Service) BusinessWeek has continued to expand its use of alternative delivery so that now nearly 25o,000 weekly issues are no longer delivered by the Postal Service. Bloomberg will likely have reached that milestone by this month after shifting 45,000 subscribers to alternative delivery this year. By the end of 2012, it hopes to have 300,000 of its 860,0000 weekly subscribers delivered by a carrier other than the Postal Service.
Where BusinessWeek Has Left the Postal Service
The markets where Bloomberg BusinessWeek now uses alternative delivery include:
- Los Angeles, CA
- San Diego, CA
- San Francisco, CA
- Washington, DC
- Orlando, FL
- Miami/Ft. Lauderdale, FL
- Atlanta, GA
- Chicago, IL
- Boston, MA
- Baltimore, MD
- Northern and Central, NJ
- New York City, NY
- Westchester County, NY
- Baltimore, MD
- Portland, OR
- Philadelphia, PA
Bloomberg BusinessWeek is Not Alone
Previous posts on BusinessWeek’s use of alternative delivery identified service quality as the primary driver of the switch to alternative delivery. To the extent that alternative delivery is more expensive, its better record of delivery on schedule makes Business Week more valuable to advertisers as it ensures that the magazine arrives before the weekend when readers are more likely to take the time to read each weekly issue. A recent story in the Columbia Journalism Review (CJR) illustrates that Business Week is not alone in trying to find a solution to the service problems facing the Postal Service.
Meanwhile, publishers must decide how to deal with slower and less-consistent delivery. William Falk, editor-in-chief of The Week magazine, took the bold step of printing an editor’s letter addressing the problem in his February 3 issue. Of the magazine’s 535,000 subscribers, about 100,000 of them got a letter, in zip codes with the most complaints. In the note, Falk placed the blame for late deliveries directly on the postal service. “The Week magazine prints every Wednesday night at exactly the same time—every week, without fail,” the letter read. “We then pay a very substantial fee to have copies trucked to 70 postal distribution facilities around the country every Thursday morning. This is an investment The Week has made in order to speed delivery of your copy to a postal facility in your area.” According to the USPS’s delivery standards, the letter continued, readers should expect to receive their copies on Friday or Saturday, but that, “to our dismay, that consistent delivery has eroded….”
The CJR further noted that alternative delivery was a hot topic at the recent Magazine Media Association Conference.
Another solution—one heavily discussed at the MPA event, which was sponsored in part by several alternative delivery services—is to opt out of the USPS and go for private delivery. Women’s Wear Daily, a time-sensitive fashion trade paper owned by Condé Nast, already offers hand delivery to its readers in New York City.
What holds back many publishers from using alternative delivery is:
- the cost of using alternative delivery especially once the delivery location falls outside of the largest metropolitan areas; and
- the value of delivery to the mailbox.
Publishers need to keep an eye on how customers react to BusinessWeek’s switch to see if the second objection to alternative delivery is true.
As to the cost of alternative delivery, adding a second or third weekly publication to the routes that already delivery BusinessWeek would likely reduce the cost for all publishers using alternative delivery. However alternative delivery will likely remain too expensive for local and lower circulation weeklies forcing many publishers to deal with the challenge of poor Postal Service service quality.
Impact of Changes in Service Standards and Saturday Delivery
Given that publishers are unhappy with service quality now, any changes that reduces service quality will likely make those complaints more frequent. To the extent that critical entry times are set earlier in the day, weeklies will have a greater challenge continuing to ensure timely content while still ensuring that their publications arrive before the weekend or on Saturday. For those publishers using alternative delivery, the lower volumes in the Postal Service network makes drop shipping less economical which could make delivery times for those residual issues that are still delivered by the Postal Service even worse.
The real concern for publishers, and in particular weekly publishers is the elimination of Saturday Delivery. Weeklies are designed to arrive no later than Saturday. Eliminating Saturday Delivery requires that publishing deadlines be pushed back to accommodate both earlier critical entry times and 5-day delivery.
For some publications, this may make it impossible for them to still compete with electronic alternatives, and in particular alternatives delivered and read digitally. In particular, print editions of national weeklies are most vulnerable to conversion to digital delivery as their readership base are using tablets and e-readers at a much higher rate than the public at large.
Are there Alternatives to Poor Service for Periodicals?
There are five alternatives that are often discussed:
- Raise prices – not all national posts offer a discount to publications due to their content. Eliminating or reducing the discount could allow the Postal Service to offer a higher level of service. It should be noted that a higher price would be needed for single-piece First Class as well to generate sufficient revenue to provide better service for both products.
- Open-up the mailbox for alternative delivery of periodicals – This is the solution suggested by Dead Tree Edition and would seem to be a real alternative especially if the Postal Service eliminates Saturday delivery.
- Outsource processing of flat mail With commingling and drop-shipping already permitted, it is not clear how much more of the sortation and transportation of periodicals can be shifted to private sector firms before it is tendered to the Postal Service. Nor is it clear how this would affect service.
- Lower the average wage rate of Postal Service employees – While this is usually thought of as involving cutting the salary of existing employees, an alternative solution would involve expanding early retirement incentives to clerks, city carriers and rural carriers and replacing those that leave with lower paid replacements that are offered only non-traditional full-time jobs. The difference between the wage and benefit costs of a senior and new clerk or letter carrier is large enough that it should be able to shave a few percent off of the cost of handling periodicals and allow the Postal Service to provide a higher level of service as current prices than it could do so prior to reducing the seniority of its workforce.
- Give up on the mail and go exclusively to digital delivery. This may work for some publications but for publications targeting non-digitally hooke-in demographics this may not be an alternative any time soon.
Rearders are urged to provide other ideas for ensuring that Periodicals get the service that they ask for at a price that both they are willing to pay and the Postal Service can afford to offer.