Friday, May 11, 2007

NEWS FLASH * * * Elimination of Publishers Periodical Rates for Foreign Subscribers.

BoSacks Speaks Out: The Following News Flash was submitted by a BoSacks Reader. I felt it was too important not to pass along immediately .

"He that is good for making excuses is seldom good for anything else"
Benjamin Franklin

It appears to be a little known fact that included in the next increase and effective May 14th is the elimination of Publishers Periodical Rates for foreign subscribers. Publishers will no longer be able to include foreign mail on Form 3541, nor will they be able to pay for these subscribers from their Periodicals accounts at their respective mailing points. These copies will have top be repackaged and mailed with postage affixed via ISAL. The USPS will not allow the copies to be mailed even though the new mailing statements 3541-1 (8 pages vs. 3) don't go into effect until July 15. As an example a 10oz magazine from the US to Canada will go from $1.09 to $2.45 that is almost a 244% increase. I don't think the fulfillment houses are even aware of this change.

The USPS says the change is being forced due to complaints on service to foreign countries by Publishers, but won't give any names. I don't know what service the IMTAC committee has provided in this area for the small publisher as most of their foreign subs are already being handled by remailers. This is about the stupidest thing I have see the USPS do in the 33 years I have been in this business.
(Submitted by a Director)

The year advertising turned digital

The year advertising turned digital

Traditional media groups are finding it hard to claim a share of increasing advertising budgets as online services grow at breakneck speed. By Nic Fildes
Published: 11 May 2007
Commercial media companies that have struggled amid tough market conditions over the past few years will have to navigate further choppy waters in 2007 with the latest data in the radio and newspaper publishing sectors suggesting that the threat from online competitors will continue to bite hard.

Despite steady increases in the amount of money that companies have spent on advertising, the proportion allotted to television and radio marketing has stayed flat and, in the case of newspapers, has fallen.

The UK radio sector has been one of the worst hit by the surge in interest in online advertising. Alongside outdoor and cinema advertising, radio companies have struggled to fill the gap left by advertisers attracted to online advertising, a form of marketing that can be targeted specifically at individual groups based on demographic data.

With advertising industry heavyweights such as Sir Martin Sorrell predicting that online advertising will continue to grow at breakneck speed in the UK, newspaper publishers, television broadcasters and radio companies face the prospect of further revenue declines in the coming year.

Online advertising has taken off particularly quickly in the UK due to the equally rapid uptake in broadband services among consumers. Traditional forms of advertising like billboards and radio jingles are fairly unsophisticated compared to flashy new video advertisements that can be used on webpages. While traditional advertising relies on attracting the attention of random passers-by or unknown radio listeners, online marketing can be targeted at specific individuals, increasing the relevance of the advertising. Advertisers can also tell whether the user looked at the marketing, important data in gauging the effectiveness of the campaign.

Radio companies' struggle to attract more advertising revenue is not helped by volatile audience figures. The latest data from Rajar, the radio industry's ratings body, yesterday showed that commercial radio companies have continued to lose market share to the BBC, which took a record 56 per cent of the radio audience during the first three months of the year. Despite the ongoing progress of digital radio, commercial broadcasters slipped to 42 per cent from over 43 per cent last quarter.

Commercial broadcasters like Emap, Chrysalis and GCap took some heart from increases in the number of young people listening to stations like Magic and Galaxy. However there is still much work to do to challenge the BBC and win back advertisers that have moved online.

Some commercial radio companies are coping better with the tough market conditions. UTV's TalkSport station reported record listening figures whilst Emap's Magic station won back its top spot in London status during the quarter.

However analysts were disappointed with the performance of Chrysalis, whose Heart station lost out to Magic, and GCap's flagship station Capital which reported a record low audience share of 4.6 per cent. Paul Richards, an analyst at Numis Securities, said that SMG's performance was the most disappointing with Virgin FM recording its worst ratings performance since 2003.

Analysts said the data suggests that radio companies face an uphill struggle in 2007. Howard Bareham, an investment director at Mindshare, said: "It's a Catch-22. Radio companies need to invest in product but to do that, they need the advertising revenue."

Newspaper publishers have also struggled as advertising budgets have increasingly moved online. Trinity Mirror yesterday warned that advertising conditions remain "challenging and volatile" with advertising revenue falling 2.4 per cent in the first four months of the year. The drop represented an improvement on the 6 per cent fall that Trinity Mirror reported in the last quarter of 2006, but analysts attributed the slowing rate of decline to easier comparative figures, rather than an improvement in the underlying advertising market. Advertising revenue at the company's national newspapers such as Daily Mirror fell 4 per cent while circulation revenue dropped 0.7 per cent.

Companies such as GCap, run by long-serving chief executive Ralph Bernard, and Trinity Mirror, which has Sly Bailey at its helm, face tough challenges over the coming year as the structural shift in the industry gains pace. Mr Bernard has said that he doesn't expect recent investments in improving its radio stations to show up in Rajar figures until August but remains confident that the company can be turned around after a disastrous performance since the merger of GWR and Capital in 2005. Meanwhile Ms Bailey has overseen the acquisition of a number of websites in areas like online recruitment and real estate to offset the collapse in newspaper advertising revenue. However, digital revenue still only accounts for 5 per cent of Trinity Mirror's revenue.

Publishers, terrestrial television broadcasters and radio companies also face significant threats from emerging online competitors aiming to take advantage of changing consumer behaviour to take a large chunk of advertising budgets. In the radio sector, Rajar reported that 24 per cent of people in the UK now listen to the radio via the internet while 11 per cent listen to the radio on mobile phones. With computers becoming an increasingly popular way to consume media, a new form of radio station has emerged where consumers have control over the sort of songs that are played. Pandora and LastFM, two of the most high profile user-controlled radio stations, have proved very popular among young radio listeners.

In the television sector, Joost has created headlines as the first broadcast-quality internet TV platform that offers users free access to an increasingly large amount of content. Similarly advertising-funded services have been launched in the music and mobile-phone space as new media companies look to offer consumers free services if they agree to listen to advertisements.

Patrick Yau, an analyst with Bridgewell Securities, said that radio companies have been slow to invest in the internet despite attracting large audiences to basic internet radio websites due to a "fear of the unknown". "Radio and the internet are very complementary media - we can consume both at the same time. Why aren't we seeing a more integrated online strategy from radio companies?" he said. He noted that Virgin Radio argues it has the most popular internet radio site in the world but has not taken advantage of that traffic, perhaps by offering community-based information.

Richard Menzies-Gow, an analyst with Dresdner Kleinwort, said that overall radio-listening figures will continue to rise as more people listen to radio on mobile phones or at work but that radio companies need to figure out how to ramp up revenue as a result of higher listening figures. He expects that over time, there will be an interweaving of old and new media with a relaxation of cross-media ownership laws "inevitable" as advertisers look to run integrated campaigns.

Mr Bareham said: "In some respects, technology is against radio at the moment but the strengths of radio are as relevant today as a decade ago when the young and sexy radio industry outflanked the traditional media sector. Now it's online that is in vogue." He said radio companies needed to focus on taking advantage of the interactive elements of online radio and personal devices such as mobile phones over the coming year to stimulate growth in 2008 and 2009.

BT unveils vision to compete with Sky and Virgin

The media sector is getting increasingly crowded, with BT upping the ante in the television space.

Sky and Virgin Media have torn strips off each other to win new customers over the past few months while BT has slowly added customers to its BT Vision service. Customers will receive a set-top box that connects to BT's broadband network and offers customers video-on-demand services, Freeview television and an in-built video recorder.

BT will kick off a multi-million pound national marketing campaign tomorrow to promote the service and compete more aggressively with Sky and Virgin. BT is expected to spend at least £10m promoting the service.

BT Vision is designed to be more flexible than its cable and satellite-based rivals as it does not charge customers a minimum monthly subscription. There will be a set-up fee of around £90 although BT expects to launch a self-installation version later in the year at which point, analysts expect customer numbers to soar. The company has invested in building a large library of content for the on-demand service, including sports and hit movies.

BT expects to have up to 3 million customers in the medium term as it continues to invest in offering services outside its legacy residential telecoms business.

The threat to advertising revenue

* Personalised internet radio stations such as Pandora and have built large customer bases by giving listeners control over playlists and dispensing with DJ chatter. Such stations ask the listener to list bands they like and then play songs by similar artists based on those preferences. Listeners can reject songs they don't like and buy ones they do. However the companies have hit licensing problems and Pandora has stopped allowing access to the site outside the US.

* Following on from the success of YouTube, new companies that offer free broadcast-quality television over the internet have started to emerge. Joost, set up by the founders of Skype, has made headlines and built a large library of content, and the company has just secured financial backing from a series of investors, including eBay backers Sequoia Capital, to strengthen the offering. However analysts expect it to be a niche service in the medium term.

* Another possible threat to advertising revenue comes from new companies which aim to offer free content and services to consumers who accept advertising. Blyk, a mobile phone company that uses Orange's network in the UK, will offer free calls and texts to people looking to save money by pumping ads down their handset. Meanwhile, We7, backed by Peter Gabriel, left, offers free digital music tracks to customers happy to accept advertising.

Magazine scam hits Severna Park

Magazine scam hits Severna Park

The young man at the door told a good tale.
He had just moved to the area and was working his way through college.

He said he was at the Severna Park doorstep yesterday trying to help a local charity.

And, the man said, if he managed to sell enough magazines and books; maybe, just maybe, he could earn a trip to Barcelona.

"It was a hard luck story," said Al Passori, of Boone Trail, explaining the salesman - who signed a receipt with the name Bryan Ackerman - sold him on the idea of buying some reading material for the YMCA in Towson.

"I wrote a check for $160," he said.

But then Mr. Passori started to worry about what he'd done and launched his own investigation into the young man and his company, "Xtreme Marketing."

Mr. Passori said the boy gave a fake address, the YMCA had never heard of the group, and that there are several fraud alerts about the company and Mr. Ackerman posted on

Calls to Xtreme Marketing, which does not have a Web site, were not returned.

An employee at their Sugar Hill, Ga. offices initially said she could not connect a reporter to a manager because the president of the company didn't have an office - only a cell phone.

She eventually agreed to take the reporter's number and pass it to him.

"I'm glad I had the presence of mind to investigate further and stop the bank check before it could be cashed," Mr. Passori said. "It breaks your heart that kids would try to cheat a bona fide charity out of $160 simply to enrich themselves."

County police are now investigating, but advise against giving money to anyone who comes to the door unsolicited.

Other Severna Park residents reported similar incidents yesterday involving two teenage girls from "UMD." Those girls, however, said the books would go to a pediatrics hospital and never mentioned the company's name.

And Mr. Passori said he turned two boys away two weeks ago when they came to his door and immediately started asking about his cars.

"It appears to be a pattern," he said.

According to and numerous other Web sites, Xtreme Marketing also works under the name United Family Circulation and Ultimate Empire Sales. Among the postings on - some of which praised and some of which vilified the company - was one from a person claiming to be a former employee of United Family Circulation.

"Basically they told us lies that we could tell people to get them to buy our subscriptions. A common story was something like "Hi, my name is Scott. I just moved into the neighborhood."

The Better Business Bureau of Atlanta is aware of several similar complaints involving such lies. Xtreme Marketing told the bureau, however, they do not condone lying by their "independent contractors."

United Family Circulation has an unsatisfactory record with the Bureau due to unanswered complaints. Sixty-two complaints were filed against the company.

Also, according to the bureau, Xtreme Marketing, Inc. entered into an "Assurance of Voluntary Compliance" with the Georgia Governor's Office of Consumer Affairs.

"This was due to the company allegedly not providing refunds when consumers did not receive magazines, not honoring cancellations within the correct time frame, and while selling magazines the salespeople stated affiliation with or connection to various charitable organizations, high schools and universities, when such was not the case," the Web site said.

Mr. Passori said the incident will make him think twice about donating to a charity or giving money to a door to door salesman.

"This really irks me," said Mr. Passori. "This has really soured it on me."