Wednesday, July 7, 2010

Two Dwindling Industries

I was at dinner with my wife and my mom last night. My wife reminded me that we needed to pick up stamps, and my mom asked whether we had seen that stamps were set to rise in price again.

“They’re going to put themselves out of business.”

Well, possibly, but a two-cent increase in the price of stamps isn’t going to be what does it. I still believe $0.46 is an incredible bargain to send a letter anywhere in these United States, and some things still call for more formality than email. Also, there are still plenty of entities who use direct mail advertising via the USPS.

Ironically, the slow fade of the USPS will benefit from the rapid decline of the newspaper.

Retailers are now pulling their weekly circulars from the daily newspaper, opting instead for direct mail.

When I stopped at Hyvee over lunch, the sign on their door said something like, “For your convenience, our weekly ad will be mailed directly to you beginning July 7.”

Walgreens is about to start doing the same, and I’ve noticed several other retailers no longer appear in the Sunday paper.

The downward spiral for newspapers began some time ago, but that vortex has accelerated dramatically.

It’s a familiar pattern: starting in the 1960s, the KCK population base began to erode. This was followed by an increase in tax rates. More people left, creating a smaller (and less wealthy tax base); therefore, taxes rose again. Repeat this for about 40 years and you’ll see why they’re in the bind they’re in.

Same thing with the newspaper: the circulation dipped, and manpower (and therefore content) was reduced in response. This resulted in even fewer subscribers, and therefore fewer advertisers, which resulted in further staff layoffs until you’re left with…well, the paper we have today.

I love the Star. There has been a newspaper in my house since I was born.

I just don’t know how much longer they can hold on.

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