Rising Postage Rates, Service Cuts Open Door For Alternative Distribution Services
Mike Donnelly, general manager at Donnelly Distribution, says an Economist-style hand delivery service for magazine subscribers could be an expensive proposition. "It becomes like a paper route, whereas we swarm everything. We do [retail] circulars."
Newspaper publishers able to bundle a magazine subscription into existing newspaper deliveries may see opportunities for taking delivery revenue away from the USPS, however. The Washington Post Company recently announced it would be launching a paid subscription magazine, Capital Business, to be delivered to subscribers along with the Monday edition of the Post. "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," publishing industry blog Deadtree Edition reported in March.
According to Deadtree Edition, the earlier effort to deliver magazines on paper routes failed because the Postal Service at the time lowered postage costs by restructuring rates to encourage dropshipping. With current calls to jack up periodicals rates to cover the USPS's high overhead, such a strategy by newspapers could prove more successful this time around.
Northrup says The Washington Post Company is already his "largest competitor" in the D.C. metro area for periodicals delivery, bundling The Financial Times, Barrons, The Wall Street Journal and Investors Business Daily in with The Washington Post.