Meredith, now the nation’s largest magazine publisher, will slash magazine frequency and circulation levels and close print titles if a proposed 40 percent hike in postal rates over the next five years takes hold, its chief executive Thomas Harty said.
The Postal Regulatory Commission is proposing price hikes from 34 to 41 percent for second-class mail, known as periodicals class.
A vote is expected this spring.
“The proposed increased for the periodical class will require Meredith to pursue magazine closures, circulation cuts, issue frequency reductions, conversions to digital-only formats and alternate delivery for some magazine subscription copies,” Harty said in testimony submitted to the PRC.
Harty’s testimony was first reported by the blog deadtreeedition.
Second-class postage, which most magazines and newspapers use when mailing issues, had a reduced rate over first class because the founding fathers thought that newspapers would help bind the fledgling nation together.
But since the United States Postal Service no longer receives government subsidies, it is pushing to make each class of mail operate at a break-even rate — and not rely on other classes to offset the losses.
So while the cost of a first-class stamp went up by a penny recently, the USPS is pushing for a more severe increase for magazines.
Meredith publishes big women’s service magazines like Better Homes & Gardens, Family Circle, All Recipes and Martha Stewart Living — as well as the titles it acquired in the $2.8 billion deal for Time Inc., like Time, People, Sports Illustrated and In Style.
Harty said that Meredith spent $322 million to mail its magazines in 2017.
“We conservatively estimate that the PRC’s proposed rate structure will result in a 32 percent reduction in the number of periodical pieces mailed by Meredith (a loss of approximately 310 million pieces annually),” he said.
If the number of periodicals is slashed, the USPS, even with the drastic hikes, will come out a net loser, Harty said.
“At this level of volume decline, the Postal Service will receive less revenue, not more from Meredith than it does under the current … system.”
Harty said that of each dollar Meredith spends on producing and distributing magazines, 40 cents goes to the USPS — up from 24 cents in 2006.