Canadian Magazine Industry News
16 June 2009,     TORONTO
Report: Postage costs for magazines up 38% since 2002
The average cost to mail a magazine has increased by $0.15 or 38% from 2002 to 2008, according to a Canada Post Corporation (CPC) Publications Mail analysis by Michael J. Fox, senior vice president of circulation and development for Rogers Publishing Inc. Last year, publishers paid $0.55 for postage on average, up 4% for 2007, with rates ranging from $0.40 to $1.69 a copy depending on weight and density. Fox estimates the average is now probably up another 4% or $0.02 a copy, based on January 2009 rates.

The full analysis, written in a clear and easy-to-understand style, is available in PDF form here.

Some other interesting facts:
  • On average, it costs CPC $0.35 to deliver an incremental copy of a magazine. This average has remained relatively flat over the past six years.
  • CPC Pubs volume declined 13 million copies to 522 million copies in 2008 compared to the previous year.
  • Pubs Mail revenue of $289 million represents only 5% of $6.1-billion revenues for CPC (on which it earned a profit of $66 million or 1.1% in 2008).
  • Despite big rate increases, some foreign magazines pay less to mail a magazine in 2009 than they did 13 years ago. For example, the cost for a foreign publisher to mail a 300-gram magazine in the LCP sort system in 1996 was $0.85. In 2009, the cost is $0.75 per copy.
In his report, Fox also analyzes and comments on the possible ramifications of the upcoming switch from the Publications Assistance Program (PAP) to the Canada Periodical Fund (CPF). Under PAP, publishers had to use Canada Post for delivery to receive a subsidy; that will no longer be the case under CPF (which is tentatively set for launch in April 2010.)

"[The Deparment of Canadian Heritage's] new CPF will end CPC’s monolopy on subsidized delivery,” Fox writes. “By combining and replacing PAP and the Canada Magazine Fund, CPF will allow the use of other delivery services without financial penalty. This will facilitate competition by couriers or other delivery services. For instance, bundles can cost twice as much to mail using Pubs Mail.”

Under PAP, subsidized publishers pay 36%-70% of postage costs, according to Fox's analysis. Under CPF, publishers will pay 100% pf those costs and Fox expresses concern about how much money magazines will receive under the new system and about when the money will be received.
“We know the CPF will be based on circulation levels, including both subscriptions and single copy sales for paid magazines as well as request subscriptions for controlled circulation,” he writes.

“The inclusion of single copies in the formula means that the average subsidy per copy may be lower than now. Also, a cap has been imposed on large magazines. Detailed CPF rules and application forms may not be released until September or October. Then the CPF applications will need to be processed and funding levels announced for each magazine as the CPF pie is divied up.

“All in all, expect another year of postal perplexity.”
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