Newspapers may expand delivery system to include magazines, advertisements

December 02, 1990|By Kim Clark

A looming increase in the price of stamps is driving many newspapers, including The Baltimore Sun, to consider starting up their own mail-delivery companies.

Noting that they already have carriers going house to house, two major newspaper companies have announced within the last two weeks that they may have their deliverers add magazines, advertisements,product samples and other types of mail to their bundles.

Times Mirror Co. signed an agreement last week to have employees of its Newsday newspaper hang magazines such as Yachting and Good Housekeeping in plastic bags on the doors of homes on Long Island, where the newspaper is published.

Times Mirror, a Los-Angeles based chain that owns The Sun and The Evening Sun, also has taken options on the rights to deliver magazines and advertisements to Anne Arundel, Howard and Carroll counties, said its partner in the venture, Alternate Postal Delivery.

But Times Mirror and Baltimore Sun officials said Friday that no decision had been reached on whether Sun employees also would start delivering magazines.

APD, which is based in Grand Rapids, Mich., said Times Mirror also had bought the rights to deliver magazines to the areas served by itsnewspapers in Allentown, Pa., and Hartford, Conn.

The Times Mirror move follows by about a week an announcement that media giant Gannett Co. had bought options from APD on delivering magazines and advertisements in more than 18 cities served by the Gannett newspaper chain.

Newspapers are trying to provide alternatives to the U.S. Postal Service now that the mail service plans to increase postage by as much as 25 percent early next year, industry executives said.

Besides trying to avoid the pain of paying higher mail delivery costs for newspapers, many companies are trying to improve profits by luring advertisers, catalog publishers away from the mailman's bag.

Stan Henry, one of the co-founders of APD, said newspaper carriers and the Postal Service currently have to charge about the same to deliver what the Postal Service considers third-class mail -- advertisements and coupons -- about 15 cents apiece.

But if the Postal Rate Commission approves the proposed postage increase in January, newspapers will be able to charge lower prices than the government's mail carriers and make a profit, he said.

Some newspapers already have started profitable companies to compete with the mails.

The Sacramento Bee in California used to mail advertisements to non-subscribers for advertisers who wanted their information to reach every home in California's capital.

But four years ago, the newspaper's advertising department started paying its own deliverers about 6 1/2 cents apiece to place the extra advertisements on doorsteps.

"We were already in the delivery business. We already had carriers, transportation and administration," said Jim Spivack, manager of the Bee's alternate distribution division. This year, the Bee's delivery subsidiary will take in $6 million in revenues and will have a profit of $3.5 million, he said.

"This is the wave of the future for newspapers," Mr. Spivack said.

"Postal increases are coming up; advertising has to be more defined" and targeted to likely consumers instead of broadly distributed to everyone, he said.

APD has already convinced 36 magazines and 18 catalog companies to have newspapers deliver their publications whenever possible.

The company is now out trying to convince advertisers and other publishers to follow suit, Mr. Henry said.

Under the plan Times Mirror signed, deliveries will be made only by adults, and separately from newspapers, Mr. Henry said.

The packages to be delivered are too heavy for young people to haul around neighborhoods, Mr. Henry said.

And even adult carriers must be supervised carefully to make sure they place each package on a doorknob.

The increasing popularity of alternative delivery systems such as APD's are part of larger trends in which newspapers are increasingly competing with the mail service, and trying to provide more services to advertisers.

The Sun and The Evening Sun, will offer advertisers and coupon printers the ability to have their inserts delivered to small areas, such as communities or neighborhoods, said company spokeswoman Ann Gallant.

Though the U.S. Postal Service allows advertisers to pinpoint their recipients even better -- house by house, if they choose -- the Sun's move is designed to lure medium-sized advertisers who don't need such carefully drawn targets, she said.

Ironically, newspapers that will be most hurt by the stamp price increase are least able to find alternatives.

Alan Baker, publisher of the Ellsworth (Maine) American, said he has already raised his subscription price by $5 a year, or 21 percent, to cover the expected mail delivery price increase.

"We will lose some mail subscriptions," Mr. Baker said, but he believes there is nothing he can do about it.

About half of his 13,000 subscribers in rural northeastern Maine get the weekly newspaper in their mailboxes, Mr. Baker said, and it would be prohibitively expensive to deliver the papers by hand.

"It would take you about a month to walk" the paper's distribution route, he said.

"It is about 120 miles from one end to the other," not counting the sparsely populated islands the paper also serves.

"We'd have to have carriers with snow tires and four-wheel drive."

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