It's Tuesday: Not entirely bonus content - Issue #73
Newsstand? Is it as terrible as advertised?
Shortly before the Thanksgiving holiday, MediaPost columnist Ray Schultz released a commentary discussing price hikes in the tiny shallow pool that is now the American newsstand. Shultz cited the September announcement by the Atlantic coast wholesaler, Hudson News Distributors, that they were implementing a “cost to serve” allowance that charged additional cents per copy based on the magazine’s sell through rates. He also quoted publisher Bob Guccione, Jr., the scion of the legendary Penthouse founder and the founding publisher himself of the music magazine “Spin”.
There is absolutely nothing in this commentary that is inaccurate or incorrect. But I still dislike these sorts of pieces. Why? For one it simply churns up a whole lot of complaints about a system that few have been pleased with for as long as I remember. None of this is new. For another, the people who have the power to make actual changes to the system are either no longer around, or if they are, they are unwilling or unable to do so for a wide variety of reasons.
Schultz stated that more periodicals are moving away from print. I don’t feel like disputing that. But it just seems to me that if you’re going to start out with that sort of assertion, maybe give some stats to back it up. Yes, a lot of legacy titles have left the print world and that also generates a lot of headlines in this business. However, there are a decent amount of much smaller titles entering the business. And therein lies the big issue for the American newsstand model. It was designed for blockbuster titles and those blockbuster titles have been winnowing away since the 1990’s. Titles like Penthouse, Playboy, McCalls and Ladies Home Journal have either completely exited the business, or like TV Guide, their single copy sales have shrunk from the millions per week to the tens of thousands bi-weekly. To add to the problem, medium sized titles like Computer Shopper, PC Magazine, Low Rider have left the business or are seriously diminished in sales and have not been replaced.
In the 1990’s and even in the aughts, it wasn’t uncommon for a medium sized publication to launch with a minimum newsstand print order of 50,000 to 100,000 copies. Now I might consider a medium sized publisher to be a launch of 20,000 if I’m very lucky. Lately, we may be happy with if we reach 10,000.
Up until the past decade, most of my career was spent exclusively working with the newsstand side of the magazine business. Nothing in the article was new. The Hudson announcement came out in September. If memory serves, Hudson has been threatening insolvency for quite some time. A360, the other dominant wholesaler implemented a “cost to serve” model back in June. There’s been one major national distributor in the US since 2020. I’d point out that in 2019, there were only two. The number of US based wholesalers and national distributors has been systematically shrinking since the “great consolidation” of 1995. So essentially the US newsstand has been in crisis mode for twenty-seven years. In other words the current system is essentially a very cranky last-wave millennial or an unimpressed Gen Z Tik Tok kid.
To be fair, it’s difficult to even make a small profit on the US newsstand. And yet, Barnes and Noble had more than three thousand unique titles (both regular frequency and SIP) in their most recent ranking report. Other national chains with checkouts frequently release ranking lists with as many as a thousand or more titles on them. So clearly, as “terrible” as the newsstand is (And to be honest, I’ve been hearing that the newsstand is terrible for way more than twenty seven years), there are publishers that want to be on it for some reason.
I’ve launched four new magazine titles in the past two years. During the same time frame, only one publisher that I work with has abandoned print for digital only. That title was thirty four years old and it had a good run. How many small businesses do you know have lasted thirty four years in one exclusive format? I had one other title that abandoned mainstream newsstand distribution, but kept their print subscriptions and their specialty retail business.
So what would you say to a novice publisher who really wants to see their magazine on the newsstand? Would you wave them off? I might. But I might not. What’s their audience? What’s their experience level? What’s their tolerance for risk? How clear eyed are they?
I’ve thought a lot about this “Price Spike” article over the past two weeks. It got me thinking about what I might say to the next publisher who wants to try the newsstand. What are the dangers they’d encounter? What are the opportunities? What, if anything, is working and how can they use that to their benefit?
Here’s what I’ve got so far:
1. Did you read and understand your printer contract? Do you know the services they will provide and are you able to keep to the production schedule? Do you understand what will happen if you don’t keep to that schedule? Have you modeled what may happen if/when paper prices increase again? Do you understand that? Do you have the reserves?
2. There is really only one US based and one Canadian based national magazine distributor and that really is the best way to get into the major bookstore chains and national retailers. I know that you were told by someone that there are other, better ways, but, no, there really isn’t. So, with that taken care of, did you read the national distributor contract? Did you show it to a lawyer who does contracts? Or was it your cousin Frank who is in real estate (Please don’t use cousin Frank!)? Do you understand the terms?
3. Continuing on with that contract, did you get all of the fees itemized? Do you understand them? Do you understand how and when they will pay you? Have you modeled that and do you understand how sales efficiency can impact that? Did you go over this with your accountant? Please do that.
4. Where is your readership? They’re not really everywhere. They’re clustered in places. Do you know what those places are? Do you have an idea as to the types of retailers they are shopping in? How are you going to get them in the habit of finding you?
5. Can you put your distribution on your website? Yes, you can. You can and should load the location of every single store that got copies onto your website using a mapping program. Tell your readers about it in your newsletter and on your social sites. Do it. No excuses.
6. Do you have social? Are you talking about your magazine on social? Are you previewing the cover on social? How long are you on sale for and are you repeating that while the title is on sale? If not, why not? Have you had cover contests? Have you asked readers about their favorite types of articles? Favorite writers? Favorite covers? What sort of covers they would like to see? No? Why not?
7. Are you doing DTC for your copies? Putting together and selling collections? Running promotions to get the current issue sold? Selling back issues? Yeah, it’s a lot. But you were just complaining about all of these middle men and here’s a chance to sell directly to your readers. Do it.
8. Are there retailers out there who don’t
sell magazines but might sell yours? Chances are there’s already a publisher in your category who does this and you can model your specialty retail sales program after their program. There’s no shame in being a copy cat. Direct to retail is a great way to supplement your circulation and build the audience.
So what am I missing? I’ve heard all the horror stories. They mostly bore me at this point. I’m sure some of you who are reading this have some doozies. No doubt we could spend hours one upping each other with even more horrific circulation debacles. But these days I’d really like to try something new. What’s working. What looks promising. What’s being tested?
That’s what I’m thinking about these days.
Your Moment of Magazine Zen…
That’s all I’ve got this week. I hope you enjoyed this newsletter. If you did, please give it a boost by clicking “Like” and then subscribe. You’ll get a brand new release in your email in-box every Tuesday. Sometimes I even have some “bonus” content for you.
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Have a great rest of the week!