[Reprinted from an editorial by William Shields in the November-December 2001 issue of Masthead.]
“Feelin’ lucky punk?”
That’s just about what the magazine industry is saying to Canada Post these days. The Crown corporation has essentially been caught reaching for a double-digit hike in the publications mail rate. Enter Dirty Harry.
Ordinarily diplomatic to a fault, urbane industry types are uttering the unquotable. Take Brian Segal, for example. Asked to identify the biggest problem facing the trade press, the CEO of Rogers Publishing replied instantly with a tone and sense of resolve that would do Harry Callahan proud. “There’s no goddamn way it’s anything other than Canada Post!” he thundered. “The biggest threat to trade publications is not a cyclical advertising market but rather the uncontrolled cost of an uncontrolled monopoly.”
Yikes.
There’s more. In a letter posted Oct. 19 on the Canadian Business Press’s new web site (www.cbp.ca), president Philip Boyd, a central negotiator in talks aimed at averting drastic increases, called the planned increases “unconscionable” and Canada Post a “monopolistic giant.”
The letter ended ominously: “Canada Post’s actions in the next few weeks and months will determine the direction of Canada’s periodical publishing industry, both in terms of its health and where it places its distribution business in the future.” Italics mine because that’s a remarkable statement.
Essentially, Boyd was alluding to a monopoly-busting alternate distribution scheme. Alternate delivery was attempted in the U.S. in the early 1990s. Two leading delivery firms emerged but, in 1996, a favourable rate reclassification lured some publishers back to the United States Postal Service, enough so that one of the private firms folded while the other was forced to refocus on advertising material — flyers.
These days, with double-digit rate hikes also looming in the U.S., publishers there are asking those alternative service providers to come back. Experts there don’t see it happening any time soon — there’s not enough ‘ride-along’ advertising to make it viable. That’s not to say it couldn’t work here. “[Canada Post’s] most profitable business is what’s at stake,” notes Maclean’s publisher Paul Jones, “and that’s downtown, high-density, urban core addresses. It’s a lose-lose situation,” he figures. Should an attempt be made to privatize urban deliveries, who would serve rural routes? Well, Canada Post would be welcome to that rump of circulation. And if their rates prove prohibitive, we know a few rural newspaper chain owners who might be interested.
The question is, why has Canada Post brought the matter to a head? How can it contemplate such disproportionate hikes at a time when other suppliers (paper mills, printers) are holding prices or even dropping them to retain clientele? Some speculate that publications mail revenue isn’t big enough to warrant much respect by Canada Post executives.
According to spokesman John Caines, Canada Post generated $5.942 billion in revenue last fiscal year of which publications mail accounted for $218 million or just 3.7 per cent. Roughly $41.8 million of that came from the Department of Canadian Heritage (DCH) in Publications Assistance Program (PAP) subsidies. The current PAP agreement expires on March 31, 2002. Interestingly, DCH is currently in talks with Canada Post with regard to renewing the PAP program. And a federal discussion paper released in July suggests that DCH is willing to walk away from Canada Post and spend its $46.4 million budget elsewhere.
To what end? Why, to create an alternate distribution scheme, of course. Call it seed money. Recurring annually. My, my, will Canada Post go through with their proposed increases after all? Doubt it. Drop it, fellas.
