The death of snail mail & Sunday papers

The Washington Post reports that “in the past year alone, the Postal Service has seen the single largest drop-off in mail volume in its 234-year history…. That downward trend is only accelerating. The Postal Service projects a decline of about 10 billion pieces of mail in each of the next two years, going from a high of 213 billion pieces of mail in 2006 to 170 billion projected for 2010.”

No, physical delivery won’t ever die. (Like a good newspaperman, I lie in headlines to get attention.) Indeed, we’ll get more ever deliveries of more stuff that used to be on store shelves but are now ordered online. That’s what UPS’ and FedEx’ businesses are built for. But, as the Post says, we’re sending fewer messages to each other; we have much better means to do that now. And companies are trying hard to reduce their cost of dealing with us – billing, bank statements – by taking that online.

There is still a business to be had in distributing coupons and circulars (aka junk mail); this is why newspapers are holding onto delivery a day or two a week. But that’s transitional; it won’t last forever.

As volume decreases, costs to users will increase as deliverers try to cover fixed costs that just can’t be cut anymore. Newspapers like to think they, too, have fixed costs and that’s why they keep whining that readers “should” pay their bills. But they don’t; for their core business – content and advertising – papers have new efficiencies online that the Postal Service doesn’t have. Except for those trucks and presses. They are fixed costs and that puts them in the same sinking ship as the mail.

At some point soon, the couponers will desert both the Postal Service and newspapers because they’ll be just too expensive. But consumers still want coupons; they have real value. (I often tell the story of coming back from a strike when I was Sunday editor of the New York Daily News. We didn’t have coupons because our new owner, Robert Maxwell, was feuding with Rupert Murdoch, who controls coupons – aka FSIs or free-standing inserts – in the U.S. When we got them back, circulation went up more than 100,000. Those readers weren’t buying news. They were buying ads.) Coupons are creeping online but it’s still a pain to deal with them digitally. Mobile devices may be the solution, but they’re not there yet.

So physical coupons and circulars are still great business – if you can get them into consumers’ hands. And it occurs to me that someone will craigslist – that is, undercut – both newspapers and the Postal Service in the delivery business. It’s in the interests of Murdoch’s coupon empire to do so and work with large retailers that produce circulars to come up with an alternative. Or an entrepreneur could establish a network to make it happen. I see the return of the paperboy (oops, the world has changed since then; pardon me: the paperyoungperson): networks of small agents who can deliver this material, which isn’t wildly timely (get it there this week) without the cost structure needed for individualized delivery – the Postal Service – or with a time wrapper of expensive content – the newspaper. Again, it’s transitional, but it’s a nice business for some years.

Here’s what happens then: The cost of mailing an old-fashioned letter will become prohibitive as the Postal Service covers its fixed costs for a system we won’t kill.

And the economic benefit of distributing a Sunday newspaper will all but disappear and news organizations – the ones still standing – will have no reason to hold onto the presses and trucks.

  • http://nordicbriefing.com/home/index.php Lawrence Bojkovic

    I agree up to a point.
    But what happens to those not fortunate to have a broadband connection or computer i.e the elderly?
    Here in Finland the majority still prefer to read there daily newspaper at breakfast – which is why it’s a subscription service.
    On the other hand we have one of the highest per capita broadband connections in the world and newspaper subscriptions are fairly stable though advertising revenue is falling. However, along with your newspaper subscription you also get access to their “subscribers only” section of their website. Furthermore, subscriptions cost a lot less than the kiosk price, 60% less in some cases and that includes daily deliveries even when its -30C!!!
    Lawrence
    A Fellow Twitterer

    • http://www.paycheckr.com Allan Hoving

      I have an answer for the over-50 set: give them a free fax machine with LARGE TYPE buttons and let them print the pages or sections of the paper they want at home. they pay for the ink and paper, no distribution. advertising supported. For monetizing everyone else online, my answer is PayCheckr.com.

      • Mark Essel

        Great idea Allan, can you package it and also sell ink and paper cheap. There’s probably an interesting business model here. What about electronic paper (thin film display). A tangible display surface (too weird?).
        Will have to read up on PayCheckr.com. Is that a low cost subscription based service for content?

    • Jim S

      They’ll do without, Lawrence. Until someone figures a way to make a profit off of them, that is.

  • http://www.pinee.net Dennis Tracz

    The baby boomers (like me) will keep both the post office and newspaper going for at least the next 10 to 15 years. as we die off so will both of these institutions. My dad was a mail carrier for years; my girlfriend’s grandfather carried a rural route from 1918 until 1964. Both of them were important parts of their customer’s day and often received gifts at Christmas and other times. Our society has changed and very few people male or female are home during the day.The mail is mostly junk anyway so ‘no one there to receive nothing worth receiving anyway!’

  • http:coldtype.wordpress.com John Hill

    I’m thinking mobile coupons won’t take off until there’s enough critical mass in the handheld segment. Just a guess but I’d say most of the handheld sector is affluent and doesn’t do a lot of coupon clipping. The handheld sector is no doubt growing, though, but how long will it be to tilt the income demographic to propel mobile coupons. OR maybe the key is the types of coupons. Maybe some vendor needs to create an app to aggregate coupons for things like Starbucks, books, electronic devices, vacations, clothing, etc? We’re already seeing it happen in dining. Anyway, good post. Disruption is here to stay, like it or not.

    • http://mikemokr.com Mike Mokrzycki

      Note data on handheld online usage by race, about halfway down this report:

      http://pewresearch.org/pubs/1287/wireless-internet-use-mobile-access

      Non-whites more likely than whites to use handhelds to access the Internet.

      Neither that link nor the full Pew Internet report provides crosstabs of handheld use by socioeconomic status but race is a decent proxy, suggesting the demographics of the handheld sector may already be shifting.

  • steve

    donotcall(dot)gov is/was wildly successful. it didn’t mean telemarketers couldn’t call, it just meant they couldn’t call those who choose not to be bothered.

    why we can’t do the same with junkmail is beyond me. you’d think the negative impression aspect most people have of junkmail would be enough for SMART marketers to only want to send their messages to those who actually want them… much cheaper too.

    btw- junkmail queen extraordinaire and in-store coupon midget valassis won a preliminary verdict of $300M (was seeking 1.5B) against rup’s news america on thurs..

  • http://www.CoastalFloridaRealEstate.net Richard Sites

    I agree with this concept. The PO was very slow to consolidate and save money over the years depending instead on the Fed subsidy to keep them afloat.

    But what will happen to the older folks who don’t transition to the new normal and walking out to the mailbox each day is a big thrill….”Wonder what came today?”

    I think the junk mail business now subsidizes the delivery of FC mail.

    The mailman (or person) of yesteryear is now just another anachronysm.

    Surely some people will never make it past paper but they will not be able to have the same daily delivery as they enjoy now.

    The recalibration of America is coming…everywhere.

    http://www.coastalflorida.blogspot.com

  • irieplanet

    Mobile coupons are already so prevalent and so convenient regardless of anyone’s affluency…ie Google android coupon apps. I suppose it’s sad but newspapers are a thing of the past. Who really wishes to purchase something like a newspaper when the content is only updated once or twice a day at best??? It’s just too archaic and eventually will evolve out of existence.

  • http://david.prinzing.net David Prinzing

    I’ve come to think of the US Postal Service as a deliberate spammer. They don’t offer a filtering service, and even worse, they solicit bulk mail business as a primary source of revenue. During the month of October 2007, I measured our mail feed every day to see how much postal spam we get. I separated our mail into “desired” mail and unsolicited commercial mail. I counted the number of pieces and weighed each stack on a postal scale. By the end of the month, we had received 149 pieces of postal spam, weighing 18.3 pounds. It constituted 69% of our mail by count, and 68% by weight. The percentages were lower than I expected — probably because we receive a good number of magazines, and we subscribe to Netflix. At this rate, we receive about 220 lbs/year of postal spam. One possible source of relief might be Earth Class Mail, but it’s effectively a transitional technology as the need for the US Postal Service goes away. Magazines can be replaced by the web. Netflix DVDs can be replaced by video downloads on demand. Bills can be delivered electronically. Checks can be replaced by alternative funds transfer methods. Cards and letters are infrequent in the days of email. It’s hard to think of a need for mail other than product delivery, which of course can be handled by UPS, FedEx, etc. As the US Postal Service’s spam percentage climbs, we may reach a point where we simply decide to stop retrieving the mail. Let ‘em pack the box with spam!

  • Tom Wolper

    Re: the printed newspaper – it will always be around, just as an expensive boutique item rather than a cheap mass-market one. Someone who is determined to read a printed paper every day will have access to one, only it won’t be cheap and who knows how useful it will be, but its consumer is willing to pay to keep a habit going.

    Re: the Post Office, one factor of the drop of the amount of mail delivered is the skyrocketing cost of bulk mail. Every nonprofit that I know is dropping back on printed newsletters because the mailing cost eats up too much of its budget. And fundraising and membership recruitment through direct mail has become too expensive to continue. Large national organizations are facing a dropoff in dues paying members as sending 4 or 5 recruitment letters eats up the dues of a casual (one year only) member.

    To those who are tired of junk mail: put “stop junk mail” into your preferred search engine and you will get links to advice on getting your name off mailing lists. I can vouch for their efficiency, esp the DMA (Direct Marketers Association) list. And let catalog companies know you want to keep up your contact through their website and to stop sending you printed catalogs.

    • steve

      the usps also has a form (forget the number) where the recipient can claim any sender’s stuff as PORN making it a felony to continue to deliver their stuff to you.

      as you might tell from my comments here whenever mr. jarvis mentions junkmail, i hate the stuff.

      never tried the PORNMAIL thing, but do you think companies could be shamed into stopping their mailbox spamming?

      if congress won’t do a do not mail list along the same lines as the donotcall, then people may have no other option.

    • steve

      and btw- please don’t tell me the dma is in ANY WAY a good source to stop your junkmail.

      if memory serves they post on their web property ALL the news they can find about how states’ efforts to enact donotmail lists are being lobbied against.

      fox/henhouse.

      • Tom Wolper

        And yet the junk mail stopped. I don’t mean to endorse the DMA, but if they offer to put me on a do not mail list and my junk mail stops coming, I have to note it.

        A few years ago I emailed my senators asking them to support a national do not junk registry, using a template from the Center For a New American Dream. I got a snail mail response from Santorum’s office. He said that he (or a senate panel) had discussions with the postal service and they did not recognize any mail as junk mail. Which makes sense as that’s their revenue at stake. The key could well be that any attempt at legislation will get bogged down in defining junk mail.

      • steve

        hope this formats below your response, tom w., since there wasn’t a reply button showing there.

        santorum and co. don’t need to define junkmail, they need a do not mail registry. there’s a huge differnence.

        “the dma” and all their participants want to confuse the two so they can keep the junk coming.

        a do not mail registry would simply ask if you want anything UNSOLICITED delivered to your mailbox. much like the do not call registry. they don’t come out and disconnect your phone if you sign up for that, do they?

        there are at least a dozen companies from antique auto parts suppliers to the local hardware store whose circulars i want to receive- they know who they are.

        i shouldn’t be forced by the dma or usps under the guise that “advertising mail” keeps the cost of 1st class postage down to throw out or recycle 100’s of other pounds of stuff from companies i’d never want to buy from in return for .44 postage. i send out less than 10 letters a month, i’ll pay $2 each if they save me the hassle of having to sort through those unwrapped “drops” of valassis GARBAGE just to make certain no REAL MAIL got comingled in there.

        btw- it’s form 1500 for anyone looking to use the porn mail option. all you have to do is tell your local postmaster that the sight of pork and beans in the grocer’s circular, or the assortment of dog bones shown in the petsmart piece is erotic in your opinion.

    • Dave

      C’mon. They won’t keep making papers because people want them. People loved cassette tapes, had their data on colored floppy disks, and loved their horse and buggies. They went away because they were replaced by better, faster, smarter, and more efficient technologies. And you say the non-profit is dropping back on paper – imagine what the newspaper is doing.

      It’s time. Let them die and embrace the change…

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  • http://specialdee.wordpress.com SpecialDee

    I think the newspapers of the future are going to be hologram-like; the projector will be smaller than an iPod; won’t need Internet; can read as projected text OR holographic images (can be scary – think of what goes on in this world); advertisers will make ads FUN … what do you think? Newspapers need to jump on this technology now.

  • http://9oh2.wordpress.com/ 9-OH-2

    It is not just the death of snail mail and newsprint – it is the death of pulp and paper. The Kindle was the nail in the coffin.

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  • http://toughloveforxerox.blogspot.com Michael J

    I think folks are suffering from a “people like us” problem. The reality is that news-on-paper was almost never about the news. It was about the comix, the horoscopes, the gossip, the supermarket ads all in a light cheap disposable package.

    It still is.

    As for the USPS. Note that they recently released the box. The slogan is “If it fits, it ships.”
    It seems to me a good strategy to take advantage of stuff from the internet. Now doubt the communication technology has changed the environment. A perfectly natural economic development that has been doing the same thing since at least the 1600s.

    As for journalism. The problem is not to reinvent journalism. Now that it has been freed from its role of filling the space between the ads, it might just be able to take on it’s role as the critical voice our democracy needs.

  • Mike

    Hmmm, well, it’s progress. ONLY a fool would stand in the way of progress. Maybe instead of a mail person or the need of a mailbox, how ’bout everyone recives a system that beams all mail to a speciific spot in the house? No need for stamps either. It would also send as well as recieve. Sounds more like a Star Trek idea, doesn it?

    • http://www.buzzmachine.com Jeff Jarvis

      Or an HP idea.

      • steve

        would certainly be a good use of those lonely copper wires that once ran landline phones.

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  • Charlie Gross

    Let the market decide. If you do not want to receive unsolicited mail that is fine and there are ways to stop it. However, it sure defeats free market principles to legislate away mail that is soliciting your business. The local plumber, auto mechanic as well as larger companies will be the victims of a national do not mail initiative. We are over-regulated enough and do not need more. We also do not need to destroy any more jobs by more regulations on the marketplace.

    And yes, newspapers appear to be dying. The market will make that call too. We also need to be aware that we all will be charged for content, whether electronic or on paper. There is no free lunch.

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  • http://www.mattsnod.com Matthew Snodgrass

    I’m happy to see so much less paper and transportation fuel go to waste. This is a good thing. Not that I’m slamming the USPS. Hell, who else will bring a piece of paper across the country for me for 44 cents?

  • http://www.facesofseinfeld.com Ken

    The transition can take place, and I think we should use the digital TV transition as a role model. Coupons can be distributed at the stores if you want them in paper form.

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  • Robert D

    We all tend to compare the cost of a physical product with the benefit of a vitual product. Anyone have anyidea of the true cost of ICT and its growth rate? Data breaches cost companies an estimated 32B EURO in 2008 – more than the sum total of the previous four years. Don’t writeoff the postal busines just yet – it can change when the cost of online fraud hits the consumers pockets!!

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  • http://www.lidadestek.com/ lida

    Mobile coupons are already so prevalent and so convenient regardless of anyone’s affluency…ie Google android coupon apps. I suppose it’s sad but newspapers are a thing of the past. Who really wishes to purchase something like a newspaper when the content is only updated once or twice a day at best??? It’s just too archaic and eventually will evolve out of existence.

  • http://www.baileyswines.com Colin Hall

    Coupon’s do work, there’s no doubt about it, but how long before the online coupon websites take over where the postal system left off? A Google search for “Coupons and vouchers” already results in 2 million + options and let’s face it giving out your coupons online is cheaper and far more targeted.

    Basically the postal services have their destiny in their own hands. They need to offer parallel services in-house and cut out the middle men marketers. They have the network and they see to be unable to maximise on the fact.

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