It’s (Not Quite) The End of The World As We Know It

If you are reading this post during the third week of December, Kable Distribution Services, Inc., a company with more than 100 years of history in the printing, publishing, magazine and book distribution industries will still exist in some fashion. It still has employees, clients (although they are rapidly going elsewhere), customers and a working web site and data base. But that won’t last for too much longer. The last set publications they invoiced to magazine wholesalers was earlier this month and when the calendar turns and 2016 begins, Kable Distribution Services will no longer exist. It will not be one the national distributors of magazines to the North American newsstand market.

The newsstand world as magazine publishers, wholesalers and national distributors knew it ended a long time ago. It ended when cable TV providers began publishing their own free TV listings to their customers and when newspaper publishers offered detailed television supplements in their Sunday papers.

The was end accelerated when President Reagan’s Meese Commission published their terribly flawed and highly toxic “report” on pornography and many retailers panicked and kicked adult “sophisticate” magazines out of their stores. Technology invaded readers turf with even more channels, personal computers, VHS and DVDs. Then the sales of the “Seven Sisters,” the bread and butter of women’s check-out titles began to shrink.

And it crashed and then quickly evolved into a new set of power relationships when national retailers decided that they should be the ones to call the tune about who delivers to their stores, what sort of service they should get and how much discount they should receive. A tough business that nonetheless was built on familiarity and custom met late 20th century capitalism.

So the beginning of the end started several years before REM recorded the song that begins this post. Did anyone notice? Or where we too taken with a long slow walk past the graveyard of dead magazines, wholesalers, national distributors and retailers.

My consulting colleague Linda Ruth has a detailed and very readable explanation for how Kable was walked off the plank in last weeks’  Publishing Executive. Suffice it to say, the reaction from TNG to Kable proposing to recognize and use their fullillment division to open the Hudson Group airport wholesale operation was surprising and yet not surprising. Their decision to stop carrying the Kable line of magazines was not surprising according to some because of the four major US based wholesalers, Kable was the smallest. It was surprising because it was so final. No more Kable. Would TNG have had the same reaction had Time Retail decided to provide pick and pack services? That’s a good question to ponder over beers after work.

This always has been a tough business.

As Linda expertly puts it, “The loss of Hudson Retail can’t add to TNG’s health, and if TNG sneezes, we all catch cold.” And we all want a healthy, happy and profitable TNG. Yet I believe they are in an interesting place. The industry wide acceptance of POS (Pay On Scan) based reporting and “Off Invoice RDA” (ORIDA) essentially means that any company with a pick and pack warehouse and access to UPS, Fed Ex and USPS, and a steady supply of magazines can now enter the business and service a retailer.

So the question I hear from many of my colleagues on the publishing side, the national distributor side and the wholesaler side is, “Who’s next?”

Good question.

While you ponder that, consider this:

There is no doubt that one of the reasons we see lower newsstand sales these days is because there are other competitors for our audiences time. Netflix or Entertainment Weekly? The latest episode of The Bachelorette or Us Weekly? A round of Age of Empires or an hour with Hi-Fructose? Cosmos with Neil deGrasse Tyson or an hour with National Geographic? What will the audience choose?

I can’t help but wonder if the endless round of retailers shifting back and forth between competing wholesalers has hurt sales. If you have a print order of 75,000 copies, it’s entirely possible that one “Distribution Center may handle 20% or more of your print order. How do you review, manage and adjust that efficiently?  Does anyone intimately understand anymore what will sell in a Hy-Vee store in the western suburbs of Des Moines, IA? What are the buying patterns of brides-to-be in Orange County today?

I’m not foolish enough to rail against these changes. I just can’t help but wonder if we have willingly inflicted much of this pain upon ourselves.

The critics who declaim against the “waste” and “backwardness” of today’s newsstand distribution industry have little idea how different today’s consolidated business is from the way it was ten or twenty or even thirty years ago. Some may still call magazine wholesalers “agencies”. But it is habbit, not reality. Publisher contracts may still finalize an issue at 120 days off sale, and that’s a little ridiculous in light of POS, but that too is subject to change.

The new “normal” we accepted when the year turned and we started 2015 is about to change again. Get ready because this will be interesting. I think the end result could be better for everyone. If we want it to be that way and are willing to work for it.

Finally, a word to my friends, colleagues and partners at Kable: Thank you. I have enjoyed working with you. What you did while you worked at Kable was meaningful and important to our industry. I appreciated everything you did to help me and the publishers I work for. Good luck!

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6 Replies to “It’s (Not Quite) The End of The World As We Know It”

  1. It is a sad day in the magazine business to see Kable News Company withdraw from the business. I know the feeling personally.
    From the owner of the former Labelle News Agency in Steubenville, OH.

  2. i still recall the ramifications when MacFadden closed. Then Ace, Dell, PDC, Independent, Fawcett, ICD, Flynt. In 1968 my dad took me to Kable to meet John Hayes as part of my industry initiation. There are probably as many NDs today as there are wholesalers.

    1. I forgot about Ace. I had the others on my listing of former NDs. To my mind, this is comparable to what happened when Select Magazines went out of business – although that was more due to some bad management (if I recall) rather than being forced out.

      On the “to retail” side: 2 Major mass merchandise DSD – TNG & Hudson. A handful of small indies and what used to be referred to as secondaries. Plus Ingram, Media Solutions and One Source.

      On the ND side: Curtis, Time, CoMag, plus two very small NDs, PDG and Warner International. Plus 2 from Canada – Coast to Coast and Disticor. And that’s pretty much it, unless I am missing something. Which I could after the way the past two weeks have gone.

      1. Mr. “Y” is rolling over. How could I forget Select. I don’t think enough play is given to Rick Kenyon as a cause effect when he took Walden, B. Dalton, Follett and Barnes & Noble from wholesale to Flegel and DiGolia. It was 20% of our sales as we had the University of Buffalo.

  3. Also, today, what will happen (and it WILL happen) when a POS retailer goes 7 or 11. Are POS payments pre-or post and in most states you go back 90 days to avoid preferential payments, so will the paid party have to reach in their shallow pockets and pay other creditors? Is the distribution channel nothing more than a giant Ponzi scheme though POS is removing much of that aspect.

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