Private media firms in Estonia grapple with Omniva delivery price hike
State-owned postal service Omniva is to increase its service fee for home delivery of media publications by up to a quarter of its current level, the highest price hike to date. Private sector print media houses in Estonia say it is not yet clear how they will react to the price increase, which has come as a surprise to some.
The issue affects more outlying areas of the country in particular.
Omniva has informed business customers that the price of periodical delivery will increase by at least 22 percent from next year, ERR reports, conditional on the volume of home delivery of press publications not falling by more than five percent.
Should delivery volumes fall more than five percent, Omniva says, it will raise delivery tariffs even more: For every percentage point fall in volume beyond the five percent, a price rise of 1.2 percentage points will be imposed.
So, for instance, a 10-percent fall in ordered publications volumes would equate to a price rise of 30 percent.
The main driving factor is rising costs in newspaper and magazine delivery services, as well as a fall in demand for subscription orders of same, Omniva says.
Omniva spokeswoman Kristina Haavala said: "Periodicals home delivery costs are beaing directly affected by the general inflatoin, including wage inflation and rising gasoline prices, as well as falling numbers of subscriptions to newspapers and magazines," adding that even the planned delivery price hike will not entirely cover this shortfall.
Erik Heinsaar, board chair at AS Õhtulehe Kirjastus, which publishes evening newspaper Õhtuleht, told ERR that the price hike had come as a surprise to him, in terms of its size. "This is new information for us too, and we are looking for ways to deal with it," Heinsaar said.
Õhtulehe Kirjastus cannot raise the prices of its publications by a corresponding 25 percent to compensate for the increasing home delivery costs, he added. "We have been modest in our price rises and, despite external inflation, we have instead raised the quality of our publications. We are sure that the number of subscribers will remain at our forecast level."
Argo Virkebau, board chair at Ekspress Meedia, which publishes daily Eesti Päevaleht and weeklies Maaleht and Eesti Ekspress, among other titles, said that the price increase had not been pleasant.
He said: "In our opinion, the state should support the delivery network more; it would help mitigate inflation and it would also make things easier for people in the rural areas."
In 2022, the state supported the transmission of newspapers, magazines and periodicals in rural areas, to the tune of €4.528 million.
Virkebau said, however, that the Omniva price hike had not been a complete surprise for Ekspress Meedia.
This had been telegraphed, he said, by the failed plan to consolidate AS Express Post and AS Eesti Post.
"For some reason, the Competition Authority did not give it the go ahead. But there should be only one delivery network in Estonia," Virkebau said.
Virkebau says he is not yet sure if Ekspress Grupp will raise its own prices in turn.
He said: "Revenue from our digital orders is growing, and through this we can support the publication(s)," adding that the Estonian customer is a loyal one, and appreciates the experience he gets from paper publications.
Priit Hõbemägi, Editor-in-chief of Postimees, part of the media group of the same name, said that he could not comment yet on the potential effects of Omniva's price hike on Postimees' home delivery situation.
Hõbemägi said: "We are in the process of budgeting, and so right now is not the right time to come up with figures. Our calculations are currently still in progress, since all the components of the price hike are not yet definitively known. We do not foresee a major fall in the number of subscribers to the paper [however,] and we predict the continuation of recent years' trends."
Omniva already raised its delivery services by 11.1 percent in 2020, having raised them by 7.4 percent the previous year.
The Estonian Newspaper Association (EML) has criticized these previous hikes, saying they will be passed on to rising prices of press publications, leading to canceled subscriptions and dwindling sales.
This would set up a cycle in leading to further delivery price increases, the EML said.
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Editor: Andrew Whyte, Mari Peegel