Editor’s Note: Earlier this year, the Pandemic Roundtable invited John Mennell, the founder of MagLiteracy.org to come and talk about his organization and the progress they’ve made during the pandemic in distributing magazines to the needy. Since then we’ve been in regular communication with him and received the note and pictures you will see below the fold.
As terrible as 2020 has been, what incredible success this organization has had in expanding their mission of bringing literacy through magazines.
An Update From The Field
Our new Mississippi MagLiteracy.org team covers the ground from Memphis to the Delta. They were inspired by Samir’s invite to Act 9 and it’s been made possible by the unstoppable Estella Dean and her daughter Courtney.
Thanks to steady Barnes and Noble newsstand supplies we were able to ship a pallet of beautiful mags to the Delta from our Ohio Literacy Bank warehouse to get them started. They are already partnering with community orgs and the large Mid-South Food Bank in Memphis to feed children and families hungry to read in areas of the USA faced with the deepest historical poverty.
Estella mentions engaging Ole Miss and I can tell you that high school and college students fuel our successes in Madison, Wisconsin and here in Columbus. A group of Columbus high school students bundles mags for curbside food bank distribution. A club of 30 students to is already forming at OSU and assisting with our B&N store pickups here.
Following on the 100,000 National Wildlife Federation kids’ mags that Quad delivered to launch our warehouse operations at the Atrium Company, we received 200,000 Cricket Media magazines. We are getting regular support from Kent Johnson at Highlights Magazine Publishing and Trusted Media Brands product via Milwaukee. The weekly Pandemic Roundtable helped expand our voice and got us noticed. We recently began to receive pallets from publishers like Dance Media via PubWorx. Other children’s and regional publishers like the Dispatch Company, and Meredith are now sending us magazines to distribute.
I had the privilege and pleasure to receive some mentoring from Bonnie Kintzer of Trusted Media Brands earlier this year who emphasized the importance of focusing on high needs in middle America. We took that to heart and with the always unflinching support of Joel Quadracci of Quad Graphics and his team, and with Krifka Steffey as tip of the retail spear at Barnes and Noble, we are getting in some good trouble supporting thousands upon thousands of eager readers. Many of our readers have had zero books or magazines in their home up until this point.
Tonight, I stood on a hill and wished upon two converged planets that 2021 will be the year that we all together plot a celebrate the enormous unique power of magazines for sharing the literacy love. This is our moonshot. Godspeed.
“We have opportunities available to no-one else” Article by Linda Ruth
Editor’s Note: The “Pandemic Publishing Roundtable” started a few weeks after the closing of most Barnes & Noble stores instigated a smattering of new articles proclaiming the end of that storied chain and the end of magazines at retail. While it is true that prior to the pandemic the future of single copy sales of magazines was at best a tenuous proposition, it’s death didn’t seem likely to happen any time soon. So once again, I was aggravated with the conventional wisdom of those who write about magazines.
I reached out to my colleague, Linda Ruth and together we came up with the idea of starting a weekly roundtable discussion with other members of the publishing community. We could talk about almost anything. We could invite other publishers, distributors, consultants to come and talk with us.
As we were all isolated from our places of work, the meetings became a great help this year in maintaining a feeling of connectedness to something, anything.
The article below, is the write up my colleague, Linda Ruth wrote and has also been posted in the BoSacks newsletter, and on his website. Joe Berger December 21, 2020
Winding up 2020, and our year of, our group—Joe Berger, Samir Husni, Bo Sacks, Sherin Pierce, Gemma Peckham, and me—hosted Jerry Lynch, President of MBR (Magazines and Books at Retail) to talk about what we’ve come through, and what lies ahead. Jerry Lynch talked about his faith in our industry, the unique opportunities available to us through ecommerce—and a big announcement he is almost ready to make.
Joe: We’ve spent the year reacting to the challenges that COVID threw at us; it seems, in general, we do a lot of reacting. Is there a chance for us to not be such a reactive industry?
Jerry: The challenge is going to be figuring out where retail, as a result of dealing with Covid is going to go, where it will end up, and when. Contrary to what you’d expect, we don’t fully know what’s going on. Consumer habits have changed, and some of those changes are going to stick, but perhaps not all of them. Some of the things that businesses put in place as the result of the pandemic might have to be unwound as consumers start to change again. And additional opportunities will arise.
Meanwhile, we’ve had some positive changes; mass market and grocery are the classes of trade that have done best for us.
Bo: People have to eat. Of all the necessary resources available to the public, grocery is paramount. We have to eat 3 times a day.
Sherin: The club stores, Sam’s and BJs have done well too, although Costco has stopped carrying magazines. Why is that?
Jerry: Costco has a unique way of judging performance. Magazines don’t fit nicely into their way of operating, and the resulting metrics don’t allow our performance, in my opinion, to be judged properly. The timing of their decision—we had hoped the removal of magazines was temporary–did bump up against COVID, as well. We have some ground to regain there. Some retailers removed checkout entirely, seeing it as a distraction at the front end when they needed to move customers through for safety reasons.
We’ve seen some good consumer feedback around the category, and that’s giving us an entry point back in.
Bo: People trust magazines more than any other medium.
Joe: What is the role MBR has in presenting magazines at retail?
Jerry: We see our role as overarching. Our involvement would be along the lines of providing good research, helping craft the story. COVID set us back.
Sherin: If a retailer walks away from magazines, as, for example, Home Depot did, do you strategize with wholesalers how to get them back on distribution?
Jerry: We do try to come up with a concerted effort, but remember that it’s driven by retailers in terms of who they want to talk to. That’s primarily the wholesalers and larger publishers. Our role would be to help coordinate, to make sure we’re delivering the same key messages having to do with the benefit of the entire magazine category in the store.
Sherin: The Old Farmer’s Almanac had a direct relationship with Home Depot before anyone else, then the wholesalers got involved and turned it into a category issue. When, after years, the whole chain was lost it was a big hit.
Jerry: Many times a decision about the category comes from higher up, executives other than the buyer of magazines. Those decision-makers may not have enough information or the correct information which doesn’t allow for a good understanding of the category. Where we can We work with the merchant to ensure they have the right information to take to upper management to help make our case.
Bo: My experience in our industry says there is great need for improvement, training and experience. How savvy are the buyers?
Jerry: Mixed. Book chains, terminal operators, for example, are great; in other classes of trade where publications used to have a dedicated buyer the category may now be one of many that the buyer/merchant has responsibility for or be treated as an add-on. It’s difficult to gain the expertise when the time isn’t there
Joe: and it can change in the same chain from one buyer to the next.
Sherin: Having those relationships was easier when you could go and see the buyer. They used to be happy to talk to you. Once the wholesalers took over the relationships, more of the communication went through them; the buyers have been harder to talk to. Our wholesalers need to stand up for the category and educate the retailer why magazines are important; it’s not just feeding your stomach, you need to feed your head.
Jerry: Other factors come into play as well: the decrease in sales volume, the pressures of consolidation at retail. Full service by wholesalers is seen as a real plus for retailers. That has been around for many years and recently SBT was an added big benefit for many. However, that has also allowed some retailers to be less vested/engaged in the category We need to build a love/passion for the category that gets us over those humps. That passion is built from the product itself, the actual content of a magazine.
Bo: The magazine business is in the communication business and as an industry, we’re horrible at communicating our own presence.
Jerry: Yes, we talk about our problems all day, yet we do less well talking about our successes. We have to talk to our retailers, with good data, in a retailer-friendly format, saying what magazines mean to our mutual customer. If we treated retailers the way we do advertisers we might get somewhere.
Samir: The impulse buy, going to the store to browse magazines, has dropped off with the worsening of placement and display of magazines. When I go into a store, I might find one lane open, ten lanes self-checkout. I tell them, if I wanted to do it myself I’d stay at home and order from Amazon.
Jerry: Labor at the front end is the largest expense line by far.
Joe: One of the opportunities we’ve been talking about is ecommerce.
Jerry: The MBR has been working with a small group of members to get ecommerce off the ground for publishers. It’s way more complex than you’d think. It’s becoming a critical item for most retailers, but there is a direct relationship between the retailer’s ecommerce sophistication and where magazines fall as a priority. As they get better at ecommerce, their interest in our category grows, so we can gauge where to put our resources based on how far along the road the retailers have traveled. Different retailers also handle ecommerce differently: in some cases, they have an ecommerce division that we need to approach; in other cases, the buyer is our link to the ecommerce people; it’s different from chain to chain.
Bo: Over the next few years we’ll continue to commodify ecommerce, making it simpler and smoother. At the end of the day, we’ll solve it, it will get more easy than it is today.
Samir: The increase of ecommerce even from Hearst, Meredith, and others, selling their own subscriptions, is up 40% YOY. How closely are you working with ANC?
Jerry: The wholesalers will be key in this. We need to work with them to ensure that, if a store offers say, 100 magazines via their online portal, every one of those 100 magazines are available in the store for pickup. You can turn items on and off at a store level. But—going back to SBT—without tracking inventory by the store the retailer won’t know how many copies they have.
Joe: Except we do through O/R. And we have more than enough inventory.
Jerry: But in an SBT environment, that O/R information often isn’t transmitted to the retailer. Long term, especially as we expand the selection, we need to solve this, because we don’t want to get sideways in operation and disappoint a customer. That will hurt us with the consumer and the retailer.
Joe: There is one additional customer to keep in mind that we don’t want to disappoint, and that’s the publisher. Too many of them are turning away from this business now.
Sherin: To that point, there are some forward-looking buyers. Harris Teeter, for example, is testing the OFA on its e-commerce site.
Joe: I keep coming back to the question of why wholesalers are not working with publishers to get a site up inclusive of all magazines in that warehouse. We have a few indy retailers that have it, but if I were a magazine wholesaler today I would use my warehouse as a source of eCommerce, and I’d set up affiliate relations as well.
Jerry: ecommerce provides a huge opportunity to link the two sides of publishing back together. Everyone in publishing, from all aspects of publishing, from circulation, from advertising, is looking at it. And the opportunities are enormous. Take one example: suppose people could buy a subscription for Prevention on the retailer eCommerce site, and next time they were in the store they could pick up that copy or have it added to their click and collect the order. That’s convenient. That opportunity doesn’t exist anywhere else. It only exists at retail.
Or, another example, imagine the possibilities of an eCommerce generated shopping list leading the consumer to the Food and Wine magazine next to the in-store wine display. Again, that’s an opportunity that exists nowhere else.
Sherin: Our industry has not kept up with our customers, what they want and need. Some of our customers are now buying from Amazon, or from specialty chains because newsstand hasn’t been able to provide the support to keep up with the demand.
Jerry: E-commerce has not been a high priority for retailers. But that is changing and has changed. Now it is.
Sherin: Walmart carries every one of our publications through our trade distributor because they got tired of waiting for the newsstand.
Joe: We as a group know many publishers who want seats at this table. They want to participate and help and make this happen. So how to do this?
Jerry: I expect to be able to make an announcement soon, of a step we have taken in the direction of making this happen. Let’s get together in six weeks and talk about it then.
On Wednesday, almost a full year after the onset of our pandemic, nine months from the first Pandemic Roundtable, hosted by Joe Berger and attended by Bo Sacks, Samir Husni, Sherin Pierce, Gemma Peckham, and me, we met again to review the state of our industry. Our special guest was Jim Bilton, the publisher of the annual mediafutures market analysis and the wessendenbriefing, the 7x newsletter covering print and digital trends and analysis.
While the scope of his business is international, we were particularly interested in hearing about trends in the UK, where his business is based, and how they relate to trends in the US and the rest of the world. Our conversation took us to the continuing strength of print, the re-dedication to print on the part of key retailers, and the excitement that our audience still finds in the world of print.
Jim: I was interested in reading in a past Roundtable about the direction Barnes and Noble is taking. That is such a huge part of your market; we have nothing like that in the UK. WH Smith was formerly number one in the UK, but they expanded into travel, which seemed a good move at the time, that has backfired; now magazines aren’t their main thing, stationery is. Tesco, a supermarket chain, leapfrogged over WH Smith. Barnes and Noble is interesting because of its connection, through James Daunt, to Waterstones. But the size of the store format couldn’t work in the UK, where the rents are so high; we don’t have the big out of town malls to the same extent as in the USA. The interesting aspect, to me, is what Krifka said about focusing back on bricks and mortar, on print, and moving away from a strong digital focus.
Joe: We’re interested in getting your perspective on the effects of the pandemic on UK publishing, and where you expect it to take us from here.
Jim: During lockdown magazines did worse than newspapers. Sales dropped by 30% YoY, although they came back, and overall are now down about 17%. The travel sector fared much worse, of course, going into virtual hibernation initially and are still now about 80% down. Here many UK publishers overreacted and slashed draws more than they needed to. Supermarkets held up; and independents have a bigger share than ever before. And there’s a background issue about the health of print—in terms of physical health; copies have been taken out of waiting rooms and shops because of health concerns and people have been made to feel uncomfortable about browsing at the magazine racks. This obviously hits impulse sales and discovery at retail.
Samir: In the US, we’ve seen a big increase in people of color on magazines; are you seeing the same trend in the UK, and is it helping or hurting sales?
Jim: Yes, we are seeing the same trend, but the impact on sales is difficult to size given everything else going on in the marketplace. One launch I can point to is Cocoa Girl magazine, celebrating Black girls. We’re generally seeing lots of small launches, specialty launches, and a bit of a trend from digital to print.
Bo: Last time I was in the UK most publications had cover mounts(Polybagged magazines with attached products of one sort or anohter) ; is that still a trend?
Jim: Yes, though not quite as much as before. There’s a big sustainability issue, and issues having to do with returns. Publishers are learning to move premiums closer to content, so they relate more directly to the content of the magazine. The same has been true of events—although of course that’s less of an issue now. But we haven’t realized how exciting our world is to our readers. Everyone’s got a wine club; but audiences want the unique content a publisher has to offer. Another trend we’re seeing is publishers varying cover price depending on content and pagination.
Sherin: Varying price issue to issue is something you really couldn’t do here.
Jim: Yes, retail hates it, it causes problems.
Joe: Have your retailers adopted Scan Based Trading?
Jim: We’re getting it in progressively through the back door—WHS and Sainsbury have a soft version, supermarkets are getting ready for it, although each has a slightly different version. The pandemic has had the effect of creating more demand for it from retailers, who are asking for it to mitigate the demands made on their in-store personnel.
There has always been resistance from publishers, who demanded much lower shrink levels before it would be considered. Yet the industry, led by Future Publishing, has decided to take the lead – they see it as inevitable and choose to manage it up front, to take the initiative rather than being forced to do it. Now other publishers are coming along. Wholesalers say this will be margin neutral—that retailers will concede margin but make cost-saving gains. In the US the situation got out of control, everything went the wrong way all at once. By contrast, in the UK the negotiations are tough, if the retailer wants SBT they have to give something.
Joe: In the US some publishers have seen an uptick in subscriptions with the pandemic. Have you seen that in the UK?
Jim: Subs are booming—mostly print subs. With publishers worried about their future at retail, many made the mistake of going crazy with front end acquisition. Now Hearst UK, for example, has been firming up sub prices. They, like lots of publishers, were doing short-term low-margin offers to build their files. They were overwhelmed by the response and are trying to back off on that. There were a lot of people in the funnel already, and all the cut-priced subs have done has been to shovel them in more quickly, and less profitably.
Joe: What percentage would you say subscriptions have increased?
Jim: Acquisition activity increased massively, but much of this was based on short-term, big-discount offers, which are now converting at quite low rates. When all this churn is taken into account, my sense is that total subs file sizes will end up being flat year-on-year in 2020. But that’s a big improvement on the 8% year-on-year drop seen in 2019.
Bo: What trends are you seeing digitally?
Jim: Financial people like digital editions; readers don’t so much. Newspapers are going into a digital black hole in terms of revenues apart from a handful of high profile brands like the New York Times or the UK Times and Telegraph. But what digital means to magazine publishers is very different from what it means to newspapers. Magazine publishers are still wedded to the issue rather than website accessed article level streams, which is the core of the newspaper digital offer.
Samir: It requires constant upkeep to maintain a digital file, a digital list. Publishers constantly collect and re-collect names, contact information. Has anyone found a way of making money?
Joe: For example, one of my publishers had 20,000 subscribers spread across the platforms; without constant upkeep, attrition can be rapid, and they’re down to a fraction of that now.
Sherin: Our only monthly publications, the OFA Extra, is digital. We send them a notice when an issue drops, and only revisit them for renewal annually. We keep it as simple as possible. People start with so many barriers, but you have to simplify that.
Gemma: We make our digital version free to print subscribers.
Jim: That’s why most legacy publishers are holding on to print. Hearst Premium—making best out a bad situation—has lower frequency, higher pagination, and a higher cover price at its core. Digital is still a thin medium that consumers aren’t prepared to pay a full amount for. To make this difficult field profitable, we might look to e-commerce. How high can print cover prices go?
Bo: Much higher than you might think.
Gemma: Magazines are still really underpriced.
Bo: We have to continually make the transformation from a perceived commodity product to a necessary luxury product worth paying for.
Jim: In the UK, everybody is putting their prices up.
Linda: What do you see as the effect of Brexit on exports.
Jim: A lot of UK publishers are going digital-only for export sales rather than shipping print across borders. And anyway, our really big export markets are the USA and Australia, not so much Europe. The Brexit issue more has to do with cover mounts and where your paper comes from, where you’re printed, what borders are crossed on the way to creating the final finished product. For example, a garden title with cover-mounted seeds had problems getting across borders. And it varies from country to country. In France and Germany, the supply chain is tightly regulated. But as we go into Brexit, everyone has their Plan B and Plan C.
In the UK, every link in the chain is under pressure. Publishers are feeding less product into the market. Retailers are cutting ranges and the space allocated to newspapers and magazines. Yet the recent focus has been more on wholesale. We only have two mainstream wholesalers now – Smiths and Menzies – with Smiths recovering from a disastrous diversification programme which caused them some serious financial issues. In response, some of the newspaper publishers had been looking at a newspaper-only distribution network – although this has gone quiet now. If we ever went down that route, then magazines would lose many of their current advantages – five- or six-day a week magazine deliveries, sales-based replenishment and national on-sale dates.
Samir: Vogue sold out its Harry Stiles issue in Barnes and Noble. They had to replenish.
Jim: Print still has immense power in the magazine business. Look at Amazon. Around their major markets, they offer print and digital, single copy and subscription. They understand that magazine consumers want print as well as digital. Print is still the “gold standard” and is still part of the “magazine experience”. At least for the foreseeable future. Yet there is no single, simple business model that works across every market. It’s all about understanding your own audience and delivering what they want. Not what you think they want.
Every now and then Baird Davis, a retired Ziff-Davis Publishing circulation VP will pen an article that shows up in an industry trade journal like Folio, Publishing Executive or the BoSacks newsletter. He reviews the latest AAM (formerly ABC Audit of Circulation) statistics and offer some analysis. It may not be his intention, but Baird’s articles always felt like a slap upside the head to me and many of us magazine professionals. “Wake up, already” his op-eds seem to say.
Years ago in what now feels like another reality timeline I was a consultant to Ziff-Davis and Baird was a level or two above my report. Sometimes he would come visit one of the magazine wholesalers I was calling on and it always felt like I was reporting in to my very stern (but fair) uncle. You know; the one you always double checked to make sure your pants were creased properly, that you were sitting up straight and your tie was tied properly.
It’s not as though he isn’t pointing out things we already knew. But I think that these days, those of us who have some “history” in the business are just too darn busy to acknowledge what he’s pointing out. These days, we just “carry on:”
The number of major publishers has shrunk
The number of next tier publishers with influence in the business is now nearly nil
There were too many overpriced and overextended acquisitions in previous decades
Layoffs have decreased institutional knowledge
Much subscription circulation is cheaply and poorly acquired
The newsstand business was allowed to consolidate, wither and decline
Go and read the article. Then come on back and let’s discuss. I have a few additional thoughts we can discuss.
It’s a procrastinators joke that we will always put off until the day after what we could have done tomorrow. So I would like to imagine that some magazine professionals hesitated when companies like Ziff-Davis and Petersen were purchased in the 1990’s for $1.4 and $1.2 billion. Davis points this out, and I will highlight it. I had already witnessed up close the impact of highly leveraged purchases when a company I worked for, Family Media, collapsed in the go-go 1990’s. And yet, I remember feeling exhilarated when I heard the price Softbank paid for my then biggest client, Ziff-Davis.
I imagine, that there were circulation professionals who wondered if it was smart to load up their files with so much “verified” and “non-paid audited bulk” circulation. And yet, if that worked and the guys in the corner offices were happy…
I know of one or two newsstand professionals who murmured “This ain’t good” into their coffee cups when the number of major magazine wholesalers collapsed from four to three to two to one. Do you think there were a few editors who wondered how they were going to review articles, get re-tweets and Facebook likes and come up with a new editorial calendar? And do their jobs with integrity?
Who’s minding the store now in consolidated America? Where can you get “lean back” immersive news (or entertainment) that is not dependent on either advertising, a stock price or the financial backing of some leveraged private equity firm? If you live outside a major city, can you even get news about what your local county board is up to?
Pro tip answer to that last question: “Most likely, no.”
Come On Down to The Apocalypse Bonfire
As a magazine professional, I have to say that it feels like I’m at the edge of some apocalyptic bonfire. The drums are hot, heavy, and completely out of synch. There’s dancing, but no one knows the steps. There is rote and tradition, but no one understands it. No one wants to follow along. A few people are having a fine time. But most are uncomfortable and waiting for that singular “Lord of the Flies” moment. It’s coming. Soon, maybe?
Baird offers “Suggested Next Steps” and as I often do, I find myself nodding my head in agreement. But it feels like he is offering us a West Wing moment. You know, in the West Wing television show, the music swells, President Bartlet comes out from behind the Resolute Desk, says something inspiring and we all feel a bit chagrined that he had to point out to us how to behave properly.
Baird suggests that we try and put together a committee to help the industry navigate the Covid-19 and post Covid-19 era. The goal would be to try and hold the two major players, Hearst and Meredith accountable. Good idea. But I highly doubt that these two companies having survived and thrived to this moment (Either because they long range planned themselves to this moment or arrived here through luck and the foolishness of their competitors) would put up with that.
The magazine industry does need organizations that would speak for us and remind us to do the right thing. But at the moment, we’re all down at the beach, dancing at the apocalypse bonfire. If you’re still sober, you’re wondering what will happen next.