Bosacks Speaks Out: My Response

Bob Sacks, the founder of the consulting company, Precision Media Group is a veteran of the publishing world and considered by many in our industry a passionate proponent of the digital age. He also edits and distributes the Bosacks.com e-newsletter. In many ways, he truly is a visionary because he started this newsletter back in 1993. This is one email that many people in the publishing industry make their must and first read of the day. Thursday morning, Bob pulled out one of his “Bosacks Speaks Out” pieces from eight years ago that was entitled, “A Candid Look at the last Remaining Mountain of Publishing Inefficiency”. His point: Just because the newsstand distribution industry works, doesn’t mean it’s not broken. It doesn’t mean that it couldn’t work better. According to Bob, this is true eight years later. For the record, I’m not going to argue with that. He has a point. The newsstand distribution industry has problems. If another wheel comes off the buggy, we’re in deep trouble. Or we could become a tricycle. I have to ask. Do we really need to whip that tired buggy whip analogy?

Gee, Thanks Captain Obvious!

I mean that with my tongue firmly planted in my cheek. I’ve just been meaning to say it out loud to some of the people who write about our industry. It doesn’t help to point out to us what we already know. Without explanation and exposition, it doesn’t help outsiders either. Bob has some experience in our end of the business. So have many others who have written about the single copy sales industry.  And pointing out that we have problems, inefficiencies, issues, impending doom, isn’t helpful unless you have something else to offer. I live in the newsstand world. I’m trending towards living in both the newsstand and digital world. You ignore where your money comes from at your own peril. So telling me that we have issues, that we’re inefficient and pointing out our impending doom is about as helpful as reminding Captain Smith that there were icebergs in the vicinity.

How Much is Enough?

You tell me! You ask if we need to take 21 days to ship and do the accounting for a monthly magazine. Well, what’s your alternative? Do you have some cost estimates for that? Because I’ve looked and unless the name on the check that came in last month was Uncle Moneybags, I haven’t seen a really cost effective solution that all publishers can afford. Key word: “All”. But I’m open to a suggestion. Even one I’ve already considered. Twenty one days can work because stuff happens on the way to the warehouse. Like national wholesalers going out of business. Like copies getting mis-shipped and needing to be reshipped. Like copies getting lost in a warehouse. And it gives the “bankers” in the business, the national distributors an opportunity to make sure the product was delivered. And often it doesn’t take twenty one days. Dirty laundry ahead: Sometimes an on-sale date is just a suggestion. Like a stop sign. You ask if we should have to wait months for sell through results. Well, no. We don’t. And in many cases, we don’t. For some of my titles, I can get three or four POS streams of data. From that I can come up with a pretty decent idea of how that title may sell. But it’s not always 100% accurate. That’s why it’s called an estimate. Do you have a solution? You ask, “Do we need to throw away 70% of what we print?” Uh, no. And we pretty much work on that all the time. Do you have a solution?

Garbage, Dead Editorial and the 25% Story

I won’t dispute Bob’s point that we toss away a billion dollars in print that never gets purchased. I won’t dispute Bob’s implied point that what gets shredded becomes old and dated editorial.  I’ll add that magazine wholesalers are spending money and effort and staff on shredding machines and balers to destroy what is unsold. However, sometimes they do make money on that. No, this may not be all that sustainable. Although it does work and it may work into the foreseeable future. Bob asks why “this last remaining mountain of inefficiency (is) allowed to stand so tall and unassailable? Why have we demanded the utmost efficiencies everywhere in our industry but here? Why?” Have you read our press lately? Tall? Unassailable? In Bob’s argument, which is from 2003, he mentions a friend who works for a magazine publisher and says  that so long as the advertising is there, he can live and make money off of a 25% sell through on the newsstand. Bob points out that these types of publishers often live off the advances of their national distributors. Key word here: 2003. I  doubt that that is true in 2010. I also seriously doubt that his example was all that true for more than a small handful of publishers on the newsstand in 2003. In fact, he acknowledges that it is only for the brave of heart and he doesn’t recommend it himself. So why bring it up? As an example, it’s a non-starter. With regards to Bob’s take on how other sides of the publishing business are held to tight standards  - yet we get away with it in the single copy side: I would invite him to sit in on meetings and conference calls with most publishers who are deep in the single copy sales business. We discuss efficiency regularly. We talk about how to improve it. We make plans and execute them. Other departments are held to standards and so is what is left of the single copy sales departments in the magazine business. In case you weren’t aware, there have been a lot of layoffs in our side of the business too. Um, Captain Smith? Sir? There’s icebergs in the water.

“The Distribution of Printed Magazines Needs to Be Very Quick, Reliable and Extremely Cost Effective.”

Yup. And we get there how? See, this is what kills me about these articles. Great fired up rhetoric. The problem is succinctly discussed, dissected. Appropriate amounts of righteous indignation is poured out for all to experience the catharsis. And....teeny, tiny little solutions to the big bad problem. No disrespect. But come on, give me something to work with here. Here are a few solutions that I’ve heard discussed, with some of the attending problems: 1) Go to non-returnable on all magazines: Then, theoretically, we have sold everything. But ask yourself. Did Macy’s really sell all of those dresses? Did Safeway really sell all of those “Vine Ripened Tomatoes”? Did Wal-Mart really sell all of that charcoal? Believe me, many discuss this alternative and the perils of making it work would take up several articles. The real question is: Who goes first? 2) Get the industry talking together and find a solution: To what? Discounts? Brokerages? Marketing? Sell through efficiencies? There are conventions and at most of them there are seminars where we discuss “best practices.” They’re pretty helpful and informative. You can usually find some literature in a brochure that points out that if the industry were to try and speak with one voice, it would be called “collusion”.  And that would be bad. In fact, I believe a former wholesaler is currently in court suing some of our national distributors and wholesalers over that word right now. 3) De-link the industry? Perhaps we’re too complex because there are so many facets to distribution.  Publishers, National Distributors, National Wholesalers, Regional Wholesalers, Specialty Wholesalers, Retailers. Oh, and Readers. Do you want to cut one of those lines of distribution and merge a few? Would that be more efficient? There’s a lot of ways that could be done. But do you honestly see any of these corporations or their leaders voluntarily locking up the offices and walking away? I’d like to point out that since the initial crisis of wholesaler consolidation in 1995 and Bob’s 2003 rant, costs to be on the newsstand have steadily risen. Titles have left the newsstand. Publishers have cut  back their distribution, fired their newsstand directors and marketers, re-negotiated their contracts with their national distributors, paid out more discount to their retailers and wholesalers, and tried to keep their titles visible. 4) Work harder to be more efficient! Gosh darn it! Sometimes it is what it is. I can point to any number of cases where I have “scientifically” cut my draws and managed the allotments. The end result: stable or sometimes increased unit sales and sell through efficiencies. But I’ve also “scientifically” cut my draws and managed my allotments: And lost unit sales and wound up with the exact same sell through as before. Sometimes it is what it is. So, Bob, my long winded conclusion, is this: You’re a little more on the outside of this thing than I or any of my colleagues are. Therefore, you can speak a little more publicly and creatively about some of our solutions. That would be good because the leaders of our industry are up there on the bridge and you have more access to it than many of us deckhands. Maybe they will listen to you.