Soon cheaper than the post office
Distribution: Higher postal rates are hitting magazine distribution the hardest. Now the major publishers are taking action.
Distribution More expensive postal rates affect magazine distribution in particular. On behalf of the media groups Tamedia, NZZ, Südostschweiz and Ringier as well as the retail giant Valora (K-Group), a seven-member project committee has been working for around twelve months on an "Alternative Delivery Organization" (AZO), which could do without Swiss Post if necessary. "The aim is a nationwide delivery service that delivers weekly titles and magazines to recipients between 8 a.m. and 1 p.m. the day after they are posted," says Walter Lütolf, Head of Sales at Ringier and spokesman for the project committee.
One of the reasons for this gigantic project: From 2007, the federal government no longer wants to subsidize press postal rates, which will primarily result in higher postal charges for magazines. Daily newspapers, which are mostly distributed by publishers' own early delivery companies, are less affected (exception: Blick). In terms of prices, customers therefore expect AZO to maintain price stability at the current postal rate level over the long term. "AZO must be able to assume price leadership in the press sector from 2008 at the latest, otherwise the project has no chance," says Lütolf. The prerequisite is that AZO functions according to business principles. "AZO cannot be in the service of press promotion," explains Lütolf. Large-circulation titles and those with a high circulation density would therefore have to pay less per distributed copy. In addition, only titles with a minimum circulation of 50,000 copies were included in the initial calculations.
The project is already well advanced: Various models are being examined and six sub-groups are at work. Concepts and business plans should be available in November, and in December the clients want to decide on the involvement of further partners, the founding of a company and its service contract. Implementation could begin in 2005. "Depending on the contract, it would take between one and three years to set up AZO," says Walter Lütolf. He estimates the potential AZO sales volume at 100 to 150 million Swiss francs per year.
The minimum variant guarantees the delivery service for customer and member newspapers as well as weekly titles and magazines. Lütolf estimates that this would take perhaps 25 percent of the workload away from the letter carriers and women who currently distribute around 700 million magazines to households every year. The maximum variant, on the other hand, also includes the distribution of catalogs, addressed or unaddressed advertising and a full service with packaging and addressing through to subscription management.
It is currently assumed that AZO will be founded as a general contractor (GC) that will purchase the corresponding services from existing logistics providers. Possible contractors include the early delivery companies of the publishing houses as well as K-Group or Naville with their distribution networks, logistics companies such as TPS and the logistics organizations of the major distributors.
Swiss Post is not excluded either - on the contrary, its expertise alone would make it desirable. However, the deadlines set there have been missed. AZO is therefore now also sounding out interested foreign parties. They hope to gain a foothold in Switzerland by acquiring a stake in AZO, says Lütolf.
However, the GU model has not yet been determined. A hybrid form is also possible. "We are currently examining the efficiency of each company. It may be that we don't include companies from publishers or set up certain services ourselves," says Lütolf. It is likely that the publishers' early delivery companies will be integrated into AZO. In this case, it is planned that their time slot from five to seven in the morning will continue to be reserved for the early delivery of daily newspapers. After that, however, the same carrier would add another tour for magazines. The publishers are hoping for a side effect: "The full-time jobs created in this way should make the delivery companies more attractive as employers again and make it easier to recruit staff," says Lütolf.
According to current calculations, however, AZO will only be able to cover around 80 percent of all Swiss households at a reasonable price - and only twice a week. Lütolf: "Tuesdays with Schweizer Illustrierte and the Migros and Coop titles would be interesting for AZO." For the time being, delivery to the missing households or on missing weekdays would probably have to continue to be purchased from Swiss Post.
In future, an "Alternative Delivery Organization" (AZO) will deliver magazines and weekly titles the day after they are posted.
Two projects - two playersThree weeks ago, Swiss Post and publishers' associations announced that on August 8/9 they would be restructuring postal logistics for daily newspapers in order to save CHF 10 million and keep press postal rates at their current level, at least for 2005 (WW 24/04). It is important to note that AZO has nothing to do with the project in which Swiss Post is in charge, nor is there any competition. AZO is concerned with the distribution of magazines, while the Swiss Post project is exclusively concerned with those daily newspapers that leave the printing plant early in the morning and reach their destination a few hours later by post. (mk)
Markus Knöpfli
One of the reasons for this gigantic project: From 2007, the federal government no longer wants to subsidize press postal rates, which will primarily result in higher postal charges for magazines. Daily newspapers, which are mostly distributed by publishers' own early delivery companies, are less affected (exception: Blick). In terms of prices, customers therefore expect AZO to maintain price stability at the current postal rate level over the long term. "AZO must be able to assume price leadership in the press sector from 2008 at the latest, otherwise the project has no chance," says Lütolf. The prerequisite is that AZO functions according to business principles. "AZO cannot be in the service of press promotion," explains Lütolf. Large-circulation titles and those with a high circulation density would therefore have to pay less per distributed copy. In addition, only titles with a minimum circulation of 50,000 copies were included in the initial calculations.
The project is already well advanced: Various models are being examined and six sub-groups are at work. Concepts and business plans should be available in November, and in December the clients want to decide on the involvement of further partners, the founding of a company and its service contract. Implementation could begin in 2005. "Depending on the contract, it would take between one and three years to set up AZO," says Walter Lütolf. He estimates the potential AZO sales volume at 100 to 150 million Swiss francs per year.
The minimum variant guarantees the delivery service for customer and member newspapers as well as weekly titles and magazines. Lütolf estimates that this would take perhaps 25 percent of the workload away from the letter carriers and women who currently distribute around 700 million magazines to households every year. The maximum variant, on the other hand, also includes the distribution of catalogs, addressed or unaddressed advertising and a full service with packaging and addressing through to subscription management.
It is currently assumed that AZO will be founded as a general contractor (GC) that will purchase the corresponding services from existing logistics providers. Possible contractors include the early delivery companies of the publishing houses as well as K-Group or Naville with their distribution networks, logistics companies such as TPS and the logistics organizations of the major distributors.
Swiss Post is not excluded either - on the contrary, its expertise alone would make it desirable. However, the deadlines set there have been missed. AZO is therefore now also sounding out interested foreign parties. They hope to gain a foothold in Switzerland by acquiring a stake in AZO, says Lütolf.
However, the GU model has not yet been determined. A hybrid form is also possible. "We are currently examining the efficiency of each company. It may be that we don't include companies from publishers or set up certain services ourselves," says Lütolf. It is likely that the publishers' early delivery companies will be integrated into AZO. In this case, it is planned that their time slot from five to seven in the morning will continue to be reserved for the early delivery of daily newspapers. After that, however, the same carrier would add another tour for magazines. The publishers are hoping for a side effect: "The full-time jobs created in this way should make the delivery companies more attractive as employers again and make it easier to recruit staff," says Lütolf.
According to current calculations, however, AZO will only be able to cover around 80 percent of all Swiss households at a reasonable price - and only twice a week. Lütolf: "Tuesdays with Schweizer Illustrierte and the Migros and Coop titles would be interesting for AZO." For the time being, delivery to the missing households or on missing weekdays would probably have to continue to be purchased from Swiss Post.
In future, an "Alternative Delivery Organization" (AZO) will deliver magazines and weekly titles the day after they are posted.
Two projects - two playersThree weeks ago, Swiss Post and publishers' associations announced that on August 8/9 they would be restructuring postal logistics for daily newspapers in order to save CHF 10 million and keep press postal rates at their current level, at least for 2005 (WW 24/04). It is important to note that AZO has nothing to do with the project in which Swiss Post is in charge, nor is there any competition. AZO is concerned with the distribution of magazines, while the Swiss Post project is exclusively concerned with those daily newspapers that leave the printing plant early in the morning and reach their destination a few hours later by post. (mk)
Markus Knöpfli
