USPS plan meddles in the market
September 18, 2012
The newspaper business – both small and large papers – across the country has sounded full-throated opposition this past month about a plan by the U.S. Postal Service (USPS) to purposely entice advertising out of the newspaper so ads can be placed instead with the USPS-favored stakeholder Valassis Communications Inc., of Livonia, Mich., which bought the direct mail company Advo Inc. of Windsor, Conn., in 2006.
The goal of the USPS is to create more advertising mail.
To newspapers that count on advertising to pay its reporters and cover the news, this USPS plan is beyond alarming – it’s a threat to journalism and an informed public.
Many think it will push some newspapers in America already struggling with a fragile economy and Internet competition over the edge. If that or anything like it happens, communities across our country will suffer the most long-term harm.
Now, we are a multi-media news source. Beyond our print edition, we spread the news through our website at www.madisoneagle.com, a Facebook page at Facebook.com/madisoneagle, Twitter at Twitter.com/#!MadisonEagleNJ and a mobile service to receive news in email blasts by logging in on the navigation bar at the top of our website’s homepage.
We don’t fear the Internet; we are using it, and it is vastly expanding our ability to inform the public up-to-the-minute.
But, two things to keep in mind: The most reliable and comprehensive news on the Internet is posted by journalists who work for print newspapers. Anything that weakens those newspapers will have a negative ripple effect on access to solid, accurate news on the Web.
And two: This is a media age not only in revolution, but in transition, to a future no one can fully describe. There are still many readers who aren’t satisfied that the news has really been reported and disseminated “until it’s in print.”
Unless they’re being subsidized by moguls with political agendas, newspapers of every stripe rely on advertising to support their coverage.
And people love advertisements in the newspaper because those ads help them find deals and shop smartly – which typically means shop locally.
Further, most people understand advertising drives the economy, and strengthens their local businesses and therefore their community. And it brings less obvious benefits – like paying the bills for news coverage that keeps communities informed.
On every level advertising is highly competitive. Local, regional and nationally, newspapers compete with a growing field of ad media, from Internet to television and door hangers to direct mailers. OK. So be it. That’s the marketplace.
But now the Postal Service wants to pick winners and losers in this market.
It is providing postage rebates to Valassis of more than 30 percent if Valassis can divert more ad inserts into direct mail from newspapers.
Plus, not everyone can play. The discounts can be offered by Valassis only to large national retailers. Newspapers cannot get the same discount for their own mail because they can’t sign one national postage contract, as the direct mail company did, with the USPS. Neither can a small clothing or bookstore or a hairdresser or auto parts shop. We – the newspaper and our small businesses – are all local. This deal is strictly for the Goliaths.
For the little guys, the USPS has another advertising plan that enables businesses to bring unaddressed advertising directly to the post office.
What’s wrong with this picture? It’s that the USPS isn’t a business.
It is owned by Uncle Sam. It exists to serve all. It shouldn’t be picking winners and losers in any marketplace. It shouldn’t be competing with and undercutting its stakeholders, which are all of us. It should deliver the mail that exists, promptly and affordably.
One of the USPS’s big goals is to carry even more advertising, as the Internet saps away letters and bills.
But we have to ask ourselves: does America need a federally owned advertising service?
This newspaper says no.
Recorder Newspapers, Stirling, NJ