#TheFirstWeekOfFall

Editor’s Note:  If you’re lucky, you get to meet someone during your career who can inspire imaginative thinking, offer a calming influence and when necessary, some very funny late afternoon riffing. This post was inspired by a long time friend who called to blow off a little of that late afternoon steam and crack wise about the magazine “media” industry.

This is for you my friend. A thanks for the friendship, the fun, and the ability to laugh at the absurdities of our business.

The first week of Fall is upon us. Kids have been back in school for a while. Leaves are starting to change color and some are already falling from the trees. There’s no frost yet but maybe the air where you live is a little cooler. There’s that anticipation that the holiday season is just there, just a little bit beyond the horizon. You may be too busy to think much about it, but it’s starting to push its way into your thoughts.

Here in the shallower pools of the publishing industry. That place where magazines get sold at full retail, most people have their production schedules set. They know if they have promotional dollars. They know if they have a job. Or if they’re going to get outsourced. Again.

But more importantly, if you work in newsstand, you may already have a pretty good idea of what those second half AAM, BPA and MagNet reports could look like.  For those of us who dare to dream we have a pretty good idea what upper management might ask when we’re seated around the conference room table sometime just before the holidays.

Picture yourself in that conference room. Maybe the meeting will go something like this…

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What do you think the end of the year will bring you? What’s your outlook for 2017?

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Things Placed (Yet Again) In Front Of The Magazine Rack

There are admittedly many advantages to the way the newsstand sales business is organized these days. For example, if I have a decent wi-fi signal I can quickly find out exactly where my magazine is selling. And where it isn’t. With a few mouse clicks I can download sales history, competitive sales history, class of trade data, top performing stores and more. With a few more mouse clicks I can send off a note to a distributor or retailer and make a presentation about why my ranking should be changed or a certain issue is being promoted.

On the other hand, there are few compelling reasons outside of curiosity or a desire to travel, for me to get into a car or board an airplane and jet off to Louisville, KY (Once the home of a decent sized wholesaler) to see what the displays in that town look like.

So I was pretty thrilled a few weeks ago to get in my car and drive for a few hours to meet with a regional publishing client face to face. In fact I was so happy to get out of my oddly shaped office that the day before the appointment I did something I hadn’t done for years outside of my own home base: I set up a retail check-up route, left hours before the appointment and spent the morning checking stores.

The trip had some nostalgia to it because this town was once home to one of my favorite wholesalers. To be fair, the wholesalers who now manage the retailers in this town do a good job. Most displays were perfectly fine.

But….

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Got milk. But got no magazines!

And then there was this:

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No whining just because you can’t get to your favorite magazine now…

And a few others I didn’t capture very well on camera. To be fair, most displays were perfectly fine.  But the ones above are memorable and they occur far too frequently for comfort in an industry that is constantly under assault.

A few weeks ago, fellow consultant John Morthanos put up a post on Publishing Executive where he argued for expanding the title mix at checkout. He posited, correctly I think, that the checkout was dominated by seven publishers. Most of these titles had experienced significant circulation declines so wouldn’t it make sense to experiment? Try out new titles, new categories? Shouldn’t we make the checkout more, well, democratic and meritorious (my interpretation)? He went so far as to suggest, to the apparent horror of some of our colleagues, that one checkout in each store should be designated for these up and coming titles.

John is on to something. Without diving deep into the data, it’s probably fair to say that the crash of newsstand sales over the past seven years has come mostly from the checkout. The celebrity weeklies are the biggest culprits. The uptick we see in the sales of book a zines, adult coloring books, and niche titles like The Backwoodsman and so many regional city books, guns and survivalist titles  can’t make up for the hundreds of thousands of lost units in weekly celebrity and women’s service magazines if these trending titles are relegated to the back row of a twelve-foot mainline.

There are opportunities opening up in some chains. Over the past few years, most Kroger owned banners have either re-racked their stores or opened them up to a program called “Pay to Stay”. For the record, that title, “Pay to Stay” is not nearly as ominous as it sounds. “Pay to Stay” or PTS for short, is a one-year checkout program where the retailer does not install new racks, but does ask all the titles on the rack to pay for a relogo program – or give up their space. Open pockets are then offered to other titles – often titles that are growing and ranked highly on the mainline.

The cost for this program is significantly less than a new rack program. In the last cycle, I was able to move a client who had a national publication and multiple regional titles into many markets where in the past we were relegated to the mainline and could only dream of putting the titles onto the checkout.

The program is managed by TNG’s RS2 division. It is interesting to note that the program is billed in quarterly increments and publishers can opt out if they give notice one quarter in advance. This was a huge plus in gaining the participation of my client. And no, they didn’t opt out.

Since then I have come across more programs like this. You don’t always get in. You don’t always get what you want. But it’s a small step in the right direction.

I am seeing more and more requests from retailers for publishers to be more active in promoting their titles on the newsstand and partnering with the retailers to promote their magazines in their stores. A recent letter from the Costco buying team comes to mind.

For my part, I have always encouraged the publishers I work with to announce the on-sale dates of their titles, feature their cover images and stories and promote the availability of the magazine in national and local retailers in their social media feeds and e-blasts. Why wouldn’t you try to make a sale?

Of course, we can and should do more. No matter how wonderful home delivery, drone delivery and and driverless cars may be and become, people are social animals. We need to interact. We like to get out of our homes from time to time. Anyone who works from a home office can tell you about that.

In the meantime, a recent tour of some local retailers over the July 4th weekend showed that we still have a long way to go.

While Whole Foods, has and always will get props from me for their unlogo’d checkouts, last weekend they popped a bunch of mobile carts in front of their checkouts. On the one hand, you can’t blame a retailer for wanting to boost impulse sales over a busy holiday weekend. But to me, it’s a chilling reminder of how tenuous our hold on the checkout is. It also makes you wonder why our industry didn’t approach them with an idea for the busy holiday weekend.

The local Jewel Supermarket was selling t-shirts at their checkouts.

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Go Cubs Go!

As bricks and mortar retailers come under increasing pressure from on-line retailers and changing customer patterns, our industry would be wise to continue to reinvent how we do business. John happens to be right. We need to experiment more.

But we also need to make sure that there are fewer things in front of the magazine rack.

 

The ACT 6 Conference Addresses the Newsstand

In 2009 I was excited to hear that Dr. Samir Husni (aka Mr. Magazine) had launched the Magazine Innovation Center at the Meek School of Journalism at the University of Mississippi in Oxford. I thought it was past time that the conventional wisdom was challenged. Yes, the world of information is changing. Yes, digital is the future. But did that mean that digital was the only future? While we  embrace digital, revise how we look at media and magazines and journalism do we have to dance so happily on the grave of printed magazines?

One of the missions of the MIC is to host conferences that discuss the business of publishing in an open and free ranging forum. The conferences are called ACT (ACT is the acronym for “Amplify, Clarify and Testify.”) At the first ACT conference I was thrilled to see speakers beyond the usual batch of insiders who spoke at most magazine conventions. Better yet, we got to hear from a wide range of Samir’s publishing acquaintances from overseas and learned how they were addressing the changes in the magazine world. And even better than that, the auditorium in Overby Hall was filled with journalism students, undergraduates and graduates who were there to learn about magazine publishing and what the future may hold for them.

This year, the ACT conference was in the Spring (April 20 – 22) instead of the Fall.  After five conferences that focused on a wide variety of topics, this years’ ACT featured several panels on the struggles of the newsstand side of the business.

Day One of the ACT conference kicked off with an industry overview from Tony Silber of Folio Magazine. It was followed by a very lively and informative address from Sid Evans of Southern Living Magazine.

Day Two took on a whole different form.

The conference kicked off with an historical overview of the makeup of the newsstand distribution industry from John Harrington, a consultant and editor of the New Single Copy newsletter and former head of the industry trade group, The Council for Periodical Distributors of America (CPDA). John is a long time industry veteran and he was able to lay out for many conference participants how the newsstand was organized, how it had worked for many years. Finally he explained why the industry experienced such rapid consolidation and had arrived at such a precarious position in the second decade of the 21st century.

But for any newsstand veteran, the surprise was the next panel, “Reimagining The Newsstand”. This was a remarkably open and frank discussion between several publishers, a major magazine wholesaler, and the major supplier of books and magazines to Barnes & Noble. The panel was moderated by Gil Brechtel, a former magazine wholesaler and current CEO of MagNet, a data service that provides publishers with store level information on their newsstand sales. The members of the panel were: Shawn Everson of Ingram Content, David Parry of TNG, Hubert Boehle of Bauer Media, Andy Clurman of AIM Publishing and Eric Hoffman of Hoffman Media.

While it was not that remarkable to have wholesalers and publishers on a panel discussion, this panel was more lively and open (Perhaps because we were nowhere near either coast?). Before the panel opened, each participant was given the opportunity to give a short presentation on their side of the business. This was incredibly informative. I could understand, fully for a change, the incredible pressures that TNG operates under (High fixed costs, pressures from retail customers, competitors for space within those retail customers, pressure from magazine suppliers). I could see why a publisher from another country (Hubert Boehle of Bauer) would view the American newsstand with a skeptical and quizzical eye (Germany has similar sales volume as the US, yet a higher sell through and lower remittance to the retailer). It was fascinating to hear about the transformation of Ingram from a strictly magazine and bookstore reship operation into a multi-channel company that also profited from digital production and distribution was impressive and remarkable.

Did the panel fix the newsstand?

Of course not. The challenges that face the newsstand distribution business can’t be fixed in one morning. But to my mind, this was the first of what should be many open, frank, and engaging discussions. We should continue this conversation. You can watch the presentation below:

 

This panel was followed up with another MagNet sponsored panel titled “Cover Data Analysis for Editors”. This was led by Joshua Gary of MagNet and included Brooke Belle of Hoffman Media, Josh Ellis of Success Magazine, Liz Vaccariello of Readers Digest and Sid Evans of Southern Living. From my perspective, this was another successful panel. It was refreshing to hear from editors who understand that newsstand copies are the public front door to their magazine. That something designed to appeal to a potential reader could make that part time fan of the magazine a full time paying subscriber.

 

Consider the potential streams of revenue open to magazine publishers today: Events, e-commerce, newsletters, blogs, video, subscriptions. Ask yourself, why wouldn’t you put your best foot forward with every single issue that hits the newsstand? Why wouldn’t every newsstand cover be a piece of art instead of the very last thing you think of?

I don’t know. Any art directors or editors want to chime in?

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The MagNet cover panel discusses the impact of discounted sub on newsstand sales.

In a March editorial, Tony Silber, the VP of Folio Magazine stated that the fate of the newsstand is not the same fate of print magazines. Tony correctly points out how the channel no longer generates much, if any profit. That racks are “truncated”. That many editorial pursuits have moved online. His address at the opening of the ACT conference was inspiring. But on this point I’d have to disagree. What has happened to the newsstand could very well be the fate of the printed word if publishers do not pay attention to all aspects their business. If all they do is react.

The fate of the newsstand is the fate of any business if the participants pay no attention the rumblings of their customers or suppliers. If you don’t watch and respond to trends, the fate of the newsstand is waiting for you.

If we want readers to buy newsstand copies, we have to give them a reason to do so. If we want the newsstand channel to be profitable, then the participants in the channel have to cooperate and on the same page about who, how, when and how much they will get paid.

Recently a supplier contacted one of my customers and rather (Rudely I thought) informed them that they were not profitable, that they would have to switch to another form of discount and that they would have to agree to this right now this very minute or else they would be dropped. A quick review of this distributors sales showed that their sales losses were significantly higher than anything else this title had ever experienced. Moreover the discount structure that the title was currently declared “unprofitable” had been imposed by the distributor in an earlier “either/or” declaration. In other words, the losses this distributor incurred were self inflicted. Why? Because they took their eye off the ball and didn’t think long term.

When will sales stop declining? When we give readers a compelling reason to buy. When the producers of the content, the publishers decide that it is a channel of sales that they should pay attention to. In fact, during the ACT conference, we heard from several publishers who are doing well on the newsstand precisely because they are paying attention to their business.

It’s my hope that the discussions that were started at this years ACT conference continue. The alternative is a continued drift. At a certain point, we need to stop the drift and chart a new course. That point really is now.

Put This One in the “WTF” File!

Back in the day, back when there were more than 300 magazine wholesalers and eight or nine national distributors, the coveted jobs were often the ones where you worked directly for a magazine publisher. The big publishers: General Media, Playboy, Conde Nast, Ziff-Davis, all had people out in the field. According to an old “Bunny Book”* from 1990 that I found in a recent sweep of my office, Playboy Magazine had at least eleven people working in the newsstand department: Five people in the field, one in marketing, and another five in the corporate offices.

If you were a national distributor rep toiling away for Curtis, Kable, Select or ICD, a job with one of those publishers was a ticket to more pay, travel and career success.

Even smaller publishers often had people out in the field. I worked for Outside Magazine, a single title publisher and we were a department of two. When I wasn’t working on specialty sales I was sent out once a month into the countryside where I would call on upwards of five or more magazine wholesalers in the course of a week. I recall a US News and World Report representative joking that he worked for two magazines: “US News is one. World Report is the other,” he quipped. I guess you could call that rep room humor.

Which brings us to the unexpected news from late Thursday afternoon: Harris Publications is closing it’s doors. This forty year old publisher may be one of those companies where you might have recognized the title, but never realized how many titles the publisher actually produced. Harris published upwards of 75 different magazines running the gamut from The Harris Farmer’s Almanac to Celebrity Hairstyles, Who’s Who in Baseball, Survivors Edge, Naturally Danny Seo and Dog News. If a trend got hot on the newsstand, Harris wasn’t far behind with a new title launch.

In fact, I had a running joke with myself whenever I came across a new magazine on the newsstand that I didn’t recognize: I’d pluck if off the rack and before I turned to the staff box to see who the publisher was (and if they had a consultant), I’d say, “I bet this is a Harris special!” I was often right.

Back when there were more wholesalers and distributors and field people, I frequently ran into Harris reps. Aside from being really great people, I was always impressed with how much they knew about the wholesaler system and the retailers that were serviced. They knew which buttons to push, which retail buyers were open to new titles, how strict certain distribution managers were with authorized lists, who the best route supervisors were and which general mangers you wanted to stay as far away from as possible.

So is it surprising to see that Harris is going to “wind down” it’s operations? Well, initially I’d say yes.

In fact, the headline for this post is exactly what I said. “WTF?”

But on reflection, maybe it wasn’t that surprising.

It seems to me that Harris was always something of a “newsstand first” type publisher. While that may not be impossible to do even in today’s market, it is certainly a risky way to run your publications in the first year of “Off Invoice RDA” and POS sales reporting. In 21st century publishing you need a lot of revenue buckets to make things work. I could be wrong, but Harris titles never seemed big on subscriptions or advertising and I wonder how big their digital efforts really were. In a letter to industry partners, Stanley Harris acknowledged the changes in the publishing industry and then said,

“We have tried mightily to persevere against these forces, but have been unable to overcome these challenges.”

So perhaps the management at Harris felt it better to fight how the industry was changing rather than hop on and try to wide the waves?

Most people don’t really like change. I can understand that. One of the things that I find interesting about the newsstand industry is that it is constantly changing. When I entered it in the early 1980’s there were some long time employees in some of the rep rooms I worked in who lamented that things hadn’t been good in the business since the 1970’s when “They started hiring all those women and bringing in those computers.” Now those gentlemen were real dinosaurs. Nice guys, often, but dinosaurs.

The loss of Harris is a blow to this business. We need the numbers and revenue from those titles. We need them on the checkouts and mainlines. We need them in feature pockets and flex pockets. Harris’ distributor is certainly going to feel pressure from this closure and that is not a good thing. Hopefully the better titles can be salvaged and made competitive for today’s market and their employees can find new homes and continue to work in magazine media.

In the meantime, I’ll stay on the foredeck and wax my surfboard.

I'd rather be here...

 

*: The Playboy Bunny Book was the official listing of all “Playboy Approved” magazine wholesalers in the US and Canada. It was a coveted possession because it had the address and phone number for all of these wholesalers. As an added bonus, it had phone numbers for the wholesaler sponsored “Rep Rooms.” How else could you reach your traveling companions in the days before cell phones? For those reps who were looking for new employment, it also included listings of all the national distributors and their key personnel and phone numbers. In the early 2000’s Playboy ceased publishing this directory.

Bunny Book 1990
A scan of the cover of the 1990 Playboy “Bunny Book”