The Association of Magazine Media

Postal Summit 2012 Highlights

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MPA's First Postal Summit Draws
Sell-Out Crowd to Hearst Tower

MPA's first ever Postal Summit was held Feb. 2, 2012, at Hearst Tower and drew a sold-out audience of 110 executives. The half-day gathering was created to provide an insider view on the future of a diminished U.S. Postal Service, its impact on the magazine industry and how publishers might cope with some of these changes.

The following are highlights from MPA Postal Summit sessions with short presentation recaps and photos.

 
 

Conference Welcome

Nina Link, President and CEO, MPA – the Association of Magazine Media: “The delivery of magazines by the Postal Service is one of the most important topics facing almost every magazine media company this year. We all know the hard facts. 90% of total magazine circulation comes from subscriptions, which wind up in reader mailboxes via the postal service. But that reliable, wonderful system that has bound the country together since the earliest days of this nation is in danger of collapse. Because of the importance of the Postal Service to our industry and the peril it faces, MPA planned this important half-day conference.”

 

The Future of the Postal System—What Does a Modern USPS Look Like?

   
 

Introduction: Michael Clinton, President, Marketing & Publishing Director, Hearst Magazines and Chairman, MPA

Michael Clinton introduced Patrick Donahoe, Postmaster General and CEO of the United States Postal Service, who was the Summit’s first speaker.  Building on a relationship established when the Postmaster General visited Hearst in October, he praised the Postmaster General for recognizing the value of magazines as a highly desirable piece of mail for consumers and for the Postal Service.

 

Keynote Speaker Patrick R. Donahoe, Postmaster General and Chief Executive Officer, United States Postal Service: “We are in a tough situation now with the continued drop-off in first-class mail. We know it’s not just a postal problem, but an industry issue. The postal issue is on top of other infrastructure issues that have been going on. From 2000-2006, we were able to mask the problem through massive cost reductions, with layoffs. But we haven’t taken any of the infrastructure issues out—we still have 3,600 buildings, and we still deliver mail six days a week.”


“People have choices—people can go digital. We can’t lose them like that. We need to make sure that there is timely delivery. We see a ton of value there. We will make sure it’s affordable and reliable—you have my assurances on that.”


“First class is our cash cow.”

 
 

 

2012 Postal Reform: The Likelihood of Congressional Action in an Election Year

 
    
 

Moderator: James Cregan, Executive Vice President, Government Affairs, MPA: “Politically, a firestorm has erupted: From the left, they are attacking postal legislation saying it goes too far, from the right, they say it doesn’t go far enough.”

 

Ann Fisher, Office of Public Affairs and Government Relations, Postal Regulatory Commission: “Congress will act when they absolutely must—that’s the way it goes. You need to keep the bills happening. The worst possible thing is to have nothing. Then the White House has to come in and do things no one is happy with.”

 

Peter Warren, Majority Legislative Policy Director, House Committee on Oversight & Government Reform: “First, Chairman Darrell Issa wants to be the guy who saves the postal service. He realizes that the postal service has a business model that doesn’t work anymore. And there is a looming threat of insolvency. Second, he wants to play a major role in keeping the postal service around for a long time. He wants to save taxpayers from bailing out the postal service, which has been self-sufficient since its inception. He views the postal service as a ‘business turnaround’ project. We in Congress see this as a moment that has to be seized.”

“The White House has weighed in on in favor of 5-day delivery. The vast majority of people seem to be okay with 5-day delivery. But for Congresspeople to actually cast that vote—it is a hard thing to do.”

 
 

 

 

Adjusting to the Postal Service of the Future: How Do Our Magazines Get Delivered by a Smaller, Slower and Potentially More Expensive Postal Service?

   
 

Moderator: John Loughlin, Executive Vice President & General Manager, Hearst Magazines: “Our consumers have higher expectations of delivery than ever before. Print has to be quicker to be able to compete, and here we are talking about a slower postal service...It seems almost inevitable that with fewer facilities, it will hasten the conversation toward digital.”

 

Larry Hackett, Managing Editor, People: “We aim to have 70% of our readers have our magazine in their hands by Friday afternoon. What I have in my mind’s eye is a woman in the bathtub or having a glass of wine—or having a glass of wine in the bathtub—with our magazine on a Friday evening after a long week at work….The Friday delivery is absolutely vital to our business.”

 
 
   
 

Nina LaFrance, Vice President, Consumer Marketing, Forbes: “Generationally, we are going to see the change to digital. The postal situation is hurrying the process by pushing the business that way.”

 

David Orlin, Senior Vice President, Strategic Sourcing, Condé Nast: “In New York City, we are using hand delivery [with Women’s Wear Daily] because it has to get in the hands of executives that day.”

 
 

 

Alternative Delivery: Real Life Experiences

 
  
 

Moderator: Jim O'Brien, Vice President, Distribution and Postal Affairs, Time, Inc.: “In Europe, they are way ahead of us with alternative delivery.”

 

Kevin Daly, Executive Vice President & Chief Operating Officer, Publishers Circulation Fulfillment: [On alternative delivery services] “You have Fedex and UPS, which are horribly expensive...Then you have newspaper-style delivery that is 7 days a week, 365 a year, typically between 3 and 6 am each day. Our routes are typically 250 houses and are very address-specific. We are like the postal service, but we are very time-sensitive so the customer can build a habit around it.”

“Customer acceptance would be much greater if we could use the mailbox. But it’s a lot cheaper to flip the newspaper on the driveway rather than get out car and deliver to the front of the house.”

 
 
   
 

Tom Harty, President, National Media Group, Meredith Corporation: “Pat [Donahoe, the Postmaster General] is a real breath of fresh air for our industry. The frustrating part is what we hear from the Congress, and then a year and a half later, and we are still having the same issues. We have a guy ready to make some changes but his hands are tied.”

 

Jim I. Campbell Jr., International Postal Expert: “Europeans have gotten away from the idea that there should be a uniform price for all delivery. Most bulk delivery doesn’t need six-day service. The European post offices are moving to three-day delivery for bulk and adjusting costs.”