The Postal Regulatory Commission today today ruled that the US Postal Service has justified the recovery of $1.191B of contribution in addition to the $2.766B of contribution the PRC previously granted from the original 2013 exigent rate request. That amounted to an extra 4.3% increase on top of the January 2014 rate hike. Bottom line to catalogers is reasonable considering the possibilities: Expect the exigent surcharge to be in place for about eight more months. Below are highlights from the full PRC ruling. * The PRC finds the USPS has justified the recovery of $1.191 billion of contribution in addition to the $2.766 billion of contribution previously found justified by its previous order. * The exigent surcharge shall remain in effect until removed in accordance with the surcharge removal plan filed June 2, 2014, and the provisions of PRC's prior orders. * The Postal Service must continue to report incremental and cumulative surcharge revenue to the PRC 45 days after the end of each quarter as required by the PRC's previous orders. * The Postal Service must notice the removal of the exigent surcharge at least 45 days before the date of the removal. * The Postal Service shall provide bi-weekly estimates of the incremental and cumulative surcharge revenue beginning the quarter in which the Postal Service anticipates removing the surcharge.
On October 22, 2016 wireless provider AT&T announced its plan to acquire Time Warner, which owns networks like HBO, CNN, and TNT, as well as film and video game company Warner Bros. Entertainment. The acquisition would embolden AT&T’s mobile distribution capabilities with Time Warner’s valued video content. AT&T recognizes that mobile is the platform where users increasingly spend their time, and that video is often their content of choice. “The future of mobile is video, and the future of video is mobile,” said AT&T CEO Randal Stephenson shortly after the announcement.
The AT&T-Time Warner deal follows in the footsteps of some other prominent acquisitions of content creators by content distributors. Those include Comcast’s acquisition of NBCUniversal in 2011 and Verizon’s pending acquisition of Yahoo. These technology giants recognize an opportunity to combine their channels of distribution with the content and audiences that media companies own. And some pundits expect that these types of acquisitions will come to dominate the media landscape in the coming years.
Get Ready for Competition
What does this mean for publishers? Prepare for even more competition in an already crowded market. After the rumors of Verizon’s potential acquisition of Yahoo, Publishing Executive contributor Robert Grainger speculated that these types of distributor-content partnerships would increase competition for audience attention and advertising dollars. “These are competitors publishers can’t feasibly cross swords with on a level playing field,” wrote Grainger, referring to the size and reach of these companies. “Instead, we need to consider new approaches not only to our production cycles and editorial strategies, but also to our overall business models.”
Grainger wrote that publishers may need to increase their investment in new revenue streams like ecommerce, paid online content, and native advertising in order to compete with the massive reach of these conglomerates.
Focus on Quality Over Quantity
Other publishers have stopped competing on advertising reach all together. In a recent Digiday article, Condé Nast International’s head of digital Wolfgang Blau said, “You can’t win a race for reach. . . We want to grow the audience, but we don’t have to be the largest audience in our segment. . . I’m much more interested in a narrative in which Vogue, in every market we’re in, has the most passionate community of fashion lovers and fashion professionals.” The goal for many publishers is to dive deeper into their audience data and connect advertisers with higher quality readers, rather than a greater quantity.
If You Can’t Beat Em. . .
Publishers could also take the acquisition route themselves. Time Inc., for example, acquired ad tech company Viant in February in order to improve the distribution of ads across its networks. The acquisition combined Viant’s ad targeting capabilities with Time Inc.’s large portfolio of brands and rich audience data. EVP Erik Moreno told attendees at FUSE: The Convergence of Technology & Media in September that Time Inc.’s advertising capabilities now rival those of Facebook, with a database exceeding 1 billion users.
Overlook Mobile Video At Your Own Risk
Deals like AT&T’s and Verizon’s also reinforce a trend many media leaders have been aware of for some time. Mobile is the platform of the future and video is the format that has become most popular on this platform. That’s creating new advertising opportunities that publishers must be ready to capture. According to eMarketer, which surveyed its audience on their projected ad spending for the next few years, spending on video ads on mobile is expected to nearly double from $2.42 billion in 2015 to $4.35 billion in 2016. And by 2020, that spending will exceed $17 billion, reports eMarketer. According to the survey, video ads will be the fastest growing medium for digital advertising over the next four years.
AT&T seems to be counting on it.