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The Postal Service, Magazines, and Korea... huh?

I was struck by these two stories this week.

By Dr. Joe Webb
Published: May 31, 2007

I was struck by these two stories this week... one a complaint about the postal increases' effects on small magazines, and the other about the magazine business in Korea.
The first is an opinion piece from the LA">http://www.latimes.com/news/printedition/opinion/la-oe-stack28may28,1,5257005.story?ctrack=2&cset=true">LA Times, with two opposing magazines, The Nation, and National Review, finding a mutual disgust for the new structure. What should they expect? The USPS is not a business, and does not have to please its customers, or pursue their dollars.
It adds up to this: discounts for some periodicals; as far as we can see, mostly the huge-circulation titles associated with firms like Time Warner. At smaller magazines like ours, rates will go up 15% to 25%. Research by McGraw-Hill Cos. concludes that the rate increases for some small-circulation publications could hit 30%.
Time Warner and the Postal Regulatory Commission say this scheme rewards efficiency. But the rates appear to have been adopted with little research into their effect on publishers and with no meaningful public input.
How will small magazines that operate on the economic margins — yet have an outsized effect on public discourse — accommodate $500,000 (in the case of the Nation and the National Review) in additional postage expense? Will we be forced to cut back on reporting, raise our prices, reduce our staffs or our number of pages to stay afloat? For some titles, the change may prove fatal. It certainly will make it more difficult to start a new magazine, and publishing will be less competitive as a result.
As long as there are advertisers to support the increased costs, there won't be a problem. And that was the case for so many past postal increases. Now, however, ad dollars have other places to go. And so do information-seekers. The fact that it will be more difficult to start a new magazine may be true, but it is cheaper than ever to start an information brand and aggressively promote it online and other media. Who cares whether or not it's a magazine? Publishing is now well beyond being just print, and this USPS action is not the sole reason why small print magazines will have problems hurdling these new costs... but it is a new reason for them to avoid print. For that reason, these postal rates do nothing except shield the status quo, as big mailers and the sole postal entity, conspire to solve their big problems without fear of competition. That lack of fear makes the postal service as unresponsive and bureaucratic as it is. But don't worry, it may get worse.
A magazine printer in Korea may be leading the way, however. According to Advertising">http://adage.com/columns/article?article_id=116898">Advertising Age.

Jeong-Woo Kil, president-CEO of JoongAng M&B, a privately owned publisher of seven magazines, told the International Federation of the Periodical Press conference in Beijing this month how his company was responding...
Mr. Kil said delivering magazine content through diverse channels anytime, anywhere is the key to competing in the digital age. A digital-content archive, he said, is the "centerpiece" for traffic control of digitized content including text, images and videos. Cooperation doesn't take place only on the digital front; his magazines provide content for his flagship newspaper.
JoongAng M&B's portal site, Patzzi.com, combines material from all seven of the group's magazines, plus shopping tips and media and marketing trends...
Mr. Kil said creating and producing video clips for TV, Web TV and mobile phones is "now a must, and not an option." His editors not only select items for videos but also participate in production. He showed a video clip shot as his magazine reporters worked on print and video content at the same time.
The bottom-line issue is monetization of content. Publishers that have a big reliance on their print product for volume are still having a difficult time generating enough volume in digital media to make a more aggressive transition. As it has been so many times in the past, it's easier to start from scratch and build it from the bottom up. That's the real hope for small publishers, the fact that they no longer have to build a big print infrastructure to start their content brands.
This is one of those "just wait" situations. Just wait until the iPhone comes out. Just wait until Sprint rolls out its new WiMax network. Just wait until cable TV becomes more important than broadcast. Just wait until more people get their news from TV than newsp.... whoops.... these things never change overnight, and it's hard to create that new business in an industry like publishing where overnight successes typically take years of sweat and failure... and some money.
The Postal Service, magazines, and Korea... so different... yet so intertwined.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink.com's Economics and Research Center.

What do you think? Please send feedback to Dr. Joe by emailing him at drjoe@whattheythink.com.

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