Ordinances Could Cut Yellow Pages Publishers' Revenues by $500M
STAMFORD, CT—June 30, 2011—Ongoing court battles over environmental ordinances passed in Seattle and San Francisco are shaking up the $13.5 billion yellow pages industry, which fears that losing those cases will lead to the implementation of an unfavorable model in the top 20 U.S. markets. Media and publishing forecast firm Simba Information’s latest report—“Going Green: Environmental Challenges in the Yellow Pages Industry 2011”—estimates the revenue loss to publishers, if either model is implemented, will surpass $500 million.
San Francisco’s environmental ordinance pushes a punitive opt-in model via solicitation from the publisher and carries a $500 infraction fine, while Seattle’s opt-out model attaches a $0.14 per book pre-distribution fee and licensing requirement. If adopted as a standard model for metropolitan centers, yellow pages publishers will forfeit over $500 million in revenues in the top 20 markets, an overall 30.5 percent decline.
“Either model will be devastating to the yellow pages publishers in the metropolitan areas," said David Goddard, senior analyst for Simba Information and author of the report. “With over 56 million books in circulation in the top 20 markets, San Francisco’s model will lead to revenue decline, as publishers will recover roughly 10 percent of their current distribution, and Seattle’s will lead to a significant upfront cost.”
Publishers Dex One and SuperMedia, along with the industry association LSA, have filed a lawsuit against Seattle as a restriction on First Amendment rights. According to the report, the suit charges the ordinance for singling out phone directories, which account for less than 2 percent of the total waste recycled in the city.
“Seattle and San Francisco are acting out of public interest in reducing waste,” added Goddard. “But it's difficult to justify condemning the yellow pages industry when low grade paper accounts for 29 percent of waste and newspapers account for 18 percent.”
“Going Green: Environmental Challenges in the Yellow Pages Industry 2011” presents a comprehensive overview and analysis on Seattle and San Francisco's ordinances, the estimated cost and revenue decline for each of the top 20 metropolitan markets, as well as competitor profiles for AT&T, Dex One, SuperMedia, Valley Yellow Pages and the Yell Group.
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