Towards the end of last year, social media finally began to pay off when I took a call from a start up company that was looking to move into the sports publishing business. They had seen this blog, read some of my tweets, and spoken with some people who knew me. I was retained to do a market analysis of a publication they were interested in purchasing. They also wanted me to review a test magazine they had created as a preview of what a national magazine would look like.
The work was rewarding. The research, gaming what a national launch would look like, and recapping where their potential acquisition stood in the market, and how it got there, all good stuff. Trying to estimate a value is always fun. Even more rewarding was a call I took from this upstart publisher this week, looking for some more advice on launching their test product in a local market.
As we game played a potential launch, I kept thinking how difficult our industry has made introducing a new publication for a publisher. In some parts of the country, the local markets can be divided between the major national wholesalers, one or more regional wholesalers, and specialty wholesalers. How much of the market do you want to be in? What is the best set of retailers to try to test your product in? Can we gain access without spending all of the publisher’s seed money? What will the results tell us? How do we avoid getting trapped in a contract that could kill our growth potential? Has raising the threshold of entrance for publishers been a good thing?
Or are we choking off the creativity of smaller publishers by making it harder for them to launch their product? We know Hearst can launch “The Food Network Magazine”, but who will launch the next “Computer Shopper”? The next “Lowrider”? The next “Sassy Magazine?”
This was never an easy industry to be in and in today’s market, it’s even more difficult. As we talked through their digital, tablet based, e-reader based and social media plans and I was impressed with their foresight. Launching web based is not as cheap as advertised, but it interesting to note that there is quick feed back from the web. Over all, I have confidence that if this publisher can find appropriate financing, we’ve got something great to work with.
Later this week, I got to see another example of how hard we often make it for our publishers. In another small market, I work with a publisher who is the number two magazine in a seven magazine local market.
No kidding. There are seven magazine publishers in this market. Six are on the newsstand to some degree.
At one time, only three really competed on the newsstand. Over the years I have sat through presentations and dour speeches from wholesalers, retailers and bigger named consultants about how we should not crowd markets, especially niche markets. But in the past decade, this particular market has become crowded and wholesalers and retailers have lowered the threshold of entry and allowed easy access. I don’t know why. Perhaps they are not paying as much attention as advertised.
Or maybe they really didn’t mean it.
To combat the new pretenders, we’ve tried to differentiate our product. Offer the best value for the money. And promote the magazine in retailers that offered special pockets and allotments. In both cases, the publisher did exactly what was required of them by the local wholesaler and retailers. They delivered the product on time, properly packaged and followed all of the appropriate procedures.
And, the wholesaler neglected to deliver the product to one retailer, and the other retailer failed to put up the magazines in the promotional pockets. The final straw for the publisher was a trip to one of their key retailers to find that their smallest competitor had just been approved for distribution in a chain where they have been competing, relatively successfully with their two major rivals. Now they have three titles to compete with in that chain.
No, we don’t make this easy.