Friday, February 25, 2011

British mags association head warns of damage from soaring bulk mail prices

To quote South Park, blame Canada. A "modernization" campaign is roiling the British post office, the Royal Mail, led by the former head of Canada Post Moya Green, who took over last July. The latest move has been to remove price controls from all parcels more than a kilogram in weight and from second class pre-sorted bulk mail.
But Barry McIlheney, the chief executive of the Professional Publishers Association (PPA), in a story in MediaWeek, says that he has "serious misgivings" about a measure that will double the permitted prices on bulk mail and have a significant impact on magazines.
"At a time when the Government is looking to the creative industries as a driver of economic growth, this is a shortsighted move.

"Price increases of this level are tantamount to imposing a penalty tax on magazine publishers who are being forced to pay for Royal Mail’s inefficiencies."
McIlheney said that publishers could be forced to cut circulations and direct mail volumes and reduce future investment in subscriptions. The new measures, provisionally approved by the postal regulator Postcomm, would, if fully implemented be a short-term fix for long-term damage.
One of Green's remits from the British government is to sell off parts of the Royal Mail to help reduce the national deficit. In November, the Royal Mail reported a £66m loss in its letters division, its first significant loss for eight years.Ironically bulk mail, used by publishers and direct mail companies, has been the only source of growth -- forecast to grow to more than 7 billion items next year and be half of the mail items dropping through letterboxes. 
Green has called the modernization campaign "absolutely vital" and has warned that mail volumes may fall by as much as 40% over the next five years.

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