Economy is to blame for drop in mail volume; publishers say '91 rate hikes had less impact

Last February, the U.S. Postal Service raised second-class postal rates by a whopping 25 percent. In November, it announced that second-class mail volume dropped in fiscal 1991 for the first time in 16 years. Cause and effect? Not necessarily, say publishers and industry observers.

It's true that higher rates have forced magazines to review, and perhaps trim, their circulations. It's true that some have turned to alternate delivery. But the 2.6 percent drop-off is more related to the faltering U.S. economy, which has claimed many magazines as victims.

"The economy, shrinking markets and all the layoffs are the main reasons for the volume decrease in magazines," says John Emery, president of American Business Press.

A score or more of magazines went out of business in 1991, reducing by millions the number of copies mailed. Family Media alone took six magazines down when it ceased operations last August, representing a total circulation of more than five million. (Two of them, Discover and Golf Illustrated, with a combined circulation of about 1.6 million, were sold and have resumed operations.)

Add up all the failures and you begin to see why second-class mail volume dropped for the first time since 1975. Slightly less than 10.4 billion pieces were delivered in fiscal 1991 (October 1, 1990--September 30, 1991). The previous year, nearly 10.7 billion items were mailed.

Although many of the surviving periodicals--including both large- and small-consumer and business magazines--didn't change their circulation numbers much over the past 12 months, most reduced total page counts as ad pages continued to tumble. And this helps account for the USPS's report that the total weight of second-class mail dropped by 5.2 percent, from 4.23 billion pounds to 4.01 billion pounds.

"I can understand second-class weight going down because of so many smaller-size magazines," says Michael Pashby, senior vice president, circulation marketing, for Magazine Publishers of America. "But we've seen circulations increasing or at least holding firm among our members."

The impact of the rate hikes on subscription renewals has yet to be fully realized, says Jim Schemmel, director of distribution for Communications Data Services. "If the rate increase has had an impact here," he say, "it's in the ability of magazines to solicit replacement subscribers through direct mail. So in that regard, rates would have a longer-term effect on circulations."

Publishers large and small are adjusting fitfully to the changed rates. Times Mirror Magazines, for example, has gone through what every publisher has in dealing with rising postal rates, says circulation director Diane Potter. "We're taken a careful look at spending and done a lot of cost cutting. "We're trying to work as efficiently as we can and maximize all postal pre-sort opportunities," she says. The most notable move the firm has made beyond this is to shift more than 2 percent of its total circulation into alternate delivery. "We'll increase that as fast as the alternative couriers expand," Potter says.

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