Pandemic Publishing Roundtable: E-Commerce is coming to the Newsstand. Jerry Lynch of MBR.org Gives an Update

By Linda Ruth (Crossposted at BoSacks.com)

One topic that remains of consuming interest to all of the members of the Publisher’s Roundtable (Post-Pandemic, as we fervently hope)—Joe Berger, Bo Sacks, Sherin Pierce, Samir Husni, Gemma Peckham, and me—is the issue of developing a workable e-commerce solution for publishers wanting to participate in the click-to-curb model that retailers and their customers are increasingly adapting to.

In a 2020 Roundtable, we learned from Jerry Lynch that the MBR , along with its member publishers, is working hard to make that goal a reality. Jerry recently joined us to give us an update on their progress. 

Sherin: Long before COVID the Old Farmer’s Almanac was committed to working with retailers on their e-commerce platforms, and we did develop some programs, although not in as universal a sense as we would like. The changing shopping patterns that came with COVID make this issue an urgent one for all of us. The retailers are developing and implementing their e-commerce platforms, but to a very great extent magazines are not a part of them. 

Jerry: Our goal is to make sure that magazines are able to participate in these retailer e-commerce solutions. Our focus is the click-and-collect model, where magazines will be distributed right out of the retailers’ stores, as opposed to from a centralized distribution location. The first step is to develop or identify a platform that facilitates it, and the second is retailers having to connect to the platform. We’re making progress on both sides of that equation. We spent the last 5 months working through the mechanics of the process with a small group of titles, comprising about 60 UPCs in total. It requires getting the titles up on the platform and having them change the issues on a regular basis so that the images are current. It’s a complicated process and it took some time. 

Existing platforms such as Syndigo, which MBR is using, are built for traditional product. We don’t fit the mold. Most products are more static. It’s a plus that we turn over, we stay fresh, but it makes it hard to shoehorn frequency magazines into the system. Yet we have gotten to the point where we’re set up to do it for monthlies. Over the last few weeks, we successfully delivered titles via the Syndigo platform at a northeast retailer. This included changing out cover images. We have some fine tuning to do but Weeklies will be next step.  Another hurdle is that retailers will be fulfilling their customer’s orders from inventory, and in a scan-based-trading environment, the retailers typically don’t actually have a record of their inventory. But these are challenges we must meet, and obstacles we must overcome. By 2022, over 30% of retailer sales will be from e-commerce. We’re going to want to be part of that. 

Sherin: Right. If we can’t find a way to be part of it, magazines will be left behind. 

Jerry: To make it happen, we as an industry need to convince ourselves this is a big opportunity, and one that’s worth the investment.

Linda: What do you see for the rollout? 

Jerry: We’ll start with a small group of magazines that can demonstrate success to the retailer. From there, we grow. We actually have items in E-comm  We have such a wide array of titles, but our space at retail has been eroding. If we can replace the loss of mainline space with an online presence, in a way consumers want to engage, that will be tremendous. The opportunities are huge. But it’s not just getting the magazines included on the retailers’ e-commerce sites. They also have to be discoverable. So how can we make them easy to find? 

Joe: This question comes into play both online and in the physical store itself. My experience is, if we say a magazine is in a store and someone can’t find it, nine times out of ten it’s there and they’ve overlooked it. We need to come up with a response to “it’s not there.” 

Sherin: We have a “Where to Buy” function on our site. It works well for retail, and could be also adapted for the e-commerce portion. 

Joe: Smaller titles won’t be in every store in a chain. If a chain’s click-to-curb function isn’t individualized on a by-store basis, this will be something we’ll have to solve.

Jerry: Yes, and as magazines increasingly participate in e-commerce, there will be more opportunities for sell-out situations in the stores. Our industry’s participation is about increasing our opportunity to broaden the selection, and to broaden our engagement with consumers. We have to make sure it’s a satisfying experience–that when the consumer goes to the store, having ordered online, or created a list on-line,the product is there. Also, think about when product is delivered. An issue could hit the store on Friday, Saturday, or up till Tuesday. Our approach is to say Tuesday. 

Bo: It makes sense: under-promise, over-deliver. 

From top left clockwise: Jerry Lynch of MBR.org, Joe Berger, Bo Sacks, Sherin Pierce, Linda Ruth

Sherin: What titles are participating in the test? 

Jerry: They include Bauer, National Geographic, Trusted Media, Penny Press, Hearst, Centennial—it’s a pretty good mix.  

Sherin: Are any retailers easier to work with, and can stand as an example of how it can be done successfully? 

Jerry: Overall we’re finding that they are eager to work with the category, but most are somewhat daunted by the particular challenges we present. 

Joe: What other projects is the MBR working on? 

Jerry: We’re starting in on category advocacy. Our target is to educate the upper management in the retailer community about the value of magazines. We’ve lost space, and the loss of space resulted in the loss of sale, which in turn results in the further loss of space. Trying to stop that snowball will require effort, it will require new research, it will require an investment on the part of our industry. Our productivity has gone up—that is, we’re putting more product through less space. And some of our benefits, for example our offering the ease of scan-based-trading to our retail partners, aren’t quantified in ways that show up on the retailers’ spreadsheets. We’re not just transactional; we bring people into the stores, we show them what to buy; there are so many benefits to the category. It’s up to us to tell that story. 

Bo: We’ve always been our own worst enemy. We’re an industry of marketing geniuses who can’t market our industry. 

Joe: That benefit-based business model needs to be sold not only to retailers, but to publishers as well. Many are turning away from the newsstand. 

Jerry: And that’s something else we can do through our communication with our publishers. Over the course of the year, we plan to do more webinars, and we’re also looking into the possibility of a physical event. People want to get back together. We’re focusing on getting the right content in the right format.

Editor’s note: Want to learn more about MBR? Go to mymbr.org

Pandemic Publishing Roundtable – With Lizanne Barber of Distripress

By Linda Ruth


We Will Once More Meet Face to Face

Our Pandemic Roundtable, comprising Joe Berger, Bo Sacks, Gemma Peckham, Samir Husni, Sherin Pierce, and me, started one year ago and is, amazingly, going stronger than ever. Recently we hosted Lizanne Barber, Managing Director for Distripress, the international association of distributors, publishers, and associated press industry supply chain service providers. Distripress’ mission is, as it has always been, to connect its international members in the world of publishing. It started almost seventy years ago, and has grown to, today, 200 members from 50 countries around the world. Many members have joined historically to take part in the Congress, where every fall they have had the opportunity to meet up with industry colleagues from the world’s markets. For decades the Congress served as the one way that people could meet up with their international colleagues and discuss their international business—and still is often the only time people meet their international partners face to face.  

Linda: I first attended Distripress in Toronto in 1988. The next year, when I went back, I was astonished that people remembered me from the year before; I was new to the industry, and it seemed no one in the US remembered me from meeting to meeting. Going back year after year, I came to feel a real connection with these people, even though we only saw each other a few days once a year. 

Lizanne: Yes, it’s all about building connections, and it really is a community. My first Congress was in Monte Carlo, and I had the same experience. Once you’re in Distripress you are in its community forever. Last year was the first year Congress couldn’t take place. Meetings by Zoom have been fantastic, but we’re all looking forward to meeting face to face again.  

Joe: As the new Managing Director, tell us about your mission at Distripress. 

Lizanne: Irreplaceable as the Congress is, I want to look at Distripress and make sure we’re offering connections throughout the year, and not just that once in the fall. I’m surveying our members and looking for touchpoints, finding out more about their businesses, about how they have been managing in the pandemic and how they are structuring their businesses coming out of it. So far, I’ve spoken to over 75 members. 

Joe: And what have you discovered? 

From Top Left: Linda Ruth, PSCS; Joe Berger, JBA; Samir Husni, MIC/Ole Miss; Lizanne Barber, Distripress; Bo Sacks, PMG; Sherin Pierce, Yankee Publishing; Gemma Peckham, Executive Media GroupMagazine

Lizanne: The main reason they are members is the connection with the community that we offer. And as we emerge post-COVID, we will continue to organise the Distripress Congress event, and look for more ways of strengthening those connections, and adding touchpoints, all year long. This year we plan for the Congress to be a smaller event, because there will be parts of the world where people still won’t be able to travel. But in the US for example, we’re finding that people are willing to travel again. That’s fantastic for our community.   People are willing – and wanting –  to meet up again face to face. So we’re planning a two-day conference in Zurich this fall, with a half-day forum of industry presentations and a day and a half of face to face meetings. For those who cannot attend we will be offering a virtual meeting platform a few weeks later and the opportunity to view and listen to the half day Forum presentations on the Distripress website, which will be available to all members. The planned – and widely anticipated-  larger Congress in Estoril has been moved to 2022 when we plan to welcome all members back in full force. People are really excited about the opportunity to meet again. It’s great to have virtual meetings, but face to face is a different level of connection. So many things can happen, so much can happen serendipitously, in person as opposed to over Zoom. 

Bo: Humans like to mingle. You can’t mingle on zoom. You can talk but not mingle. 

Samir: Keep Oct 26-28 open; that’s when ACT is taking place at the School of Journalism at the University of Mississippi. I’d hate for my attendees to miss out on Distripress. 

Lizanne: Yes, we’ll make sure we don’t conflict! 

Bo: The plans and procedure you’re describing is a brilliant synopsis of a competent association. 

Lizanne: We are also starting a bi-monthly newsletter for our members, to bring positive news stories to the community. The first one will feature a Q&A with the two French national distributors – a market that has seen a lot of change in the last 12 months and our members will want to read about what is happening. Plus we’ve got a Distripress half day virtual forum planned for the 9th of June, with industry leaders presenting information on global trends, a retail perspective from Barnes & Noble and Lagardere Travel North Asia, plus a case study from Mediahuis a Belgian news publisher on their diversification in e-commerce, and an overview from CMG on the effect of covid on the US market.   

Joe: From the 75+ publishers you’ve spoken to, is there a single thread you could pull on, something that everybody seems to be thinking about? 

Lizanne: for publishers it’s ecommerce; everyone’s looking to develop this revenue stream, here in the US and all over the world. For distributors, the focus is more on exploring the expansion of potential new product lines. A sustainability note runs throughout. The exciting role that Distripress plays, is that we can put people together who are working on the exact same projects in different countries. They can share learnings, make swifter progress, avoid mistakes. 

Joe: Retail sales have consolidated dramatically in the US. Have you seen that happening elsewhere?

Lizanne: Absolutely, along with other universal challenges. Many markets have seen the loss of travel channel sales, which has had an impact on sales. But there are also green shoots coming through in different territories, places where sales are looking up and some surprising successes.  

Joe: For publishers, the choices of whom to work with are increasingly limited. 

Lizanne: This is a common theme across most – if not all –  territories. Most have only one main distributor, certainly for international press and even for domestic. The slow down in print sales you see in the US is reflected to differing extents globally. This drives the determination of the distributors to diversify to pick up efficiencies of sale that are needed.  

Joe: What kind of successes have you seen? 

Lizanne: Australia is doing well—it hasn’t been hit as badly by COVID, and the distribution route is direct to retail, as opposed to through the additional layer of wholesalers, and all key outlets have remained open. The distributor has introduced toys, board games, and other products to run alongside press to retail outlets. They have around 1800 retailers on board with their new program and 6000 SKUs (non-press). It’s called Market Hub; you can look it up online. Board games for example have had appeal during lockdown —and they are universally appealing and easy to pack. 

Sherin: Are there any markets where publishers and distributors are successfully collaborating to get magazines online or included in the retailers’ click-to-curb programs? 

Lizanne: I am aware of exploration into this area in several countries – for the same reasons as the US. Customers shifted to online sales from supermarkets and magazines have been under-represented. The technical aspect with frequency of product change is a challenge. 

Sherin: As customers are going to stores less frequently, we need to find new ways of getting our publications into their hands. 

Samir: Have you seen US publishers not so interested in shipping overseas as previously? 

Lizanne: We did see an initial reluctance to commit to supplies at the start of the pandemic. Australia in particular was looking for copies, because some of their supply was reduced, but the immediate impact, was seeing efficiencies improve. Publishers are more open now to putting copies back, but every country is in a different position.   Holland closed press retailers, and we won’t know how that damaged consumer purchase pattern long term till it opens up again. Every country is unique. Now, for the first time, by looking at the sales that held throughout the pandemic, markets can identify how much of the sales of imported publications go to the domestic purchaser as opposed to travelers. This data reveals the stable base sale. For travel sales, time will tell how quickly that segment of sales will return. 

Bo: Each country has re-trained its consumers differently, but overall we have set new buying and reading patterns. And it’s not all bad—in fact, in many cases it’s quite positive. Subscriptions are up, for example. How much of that will be maintained? 

Joe: Part of maintaining that growth in subscription sales lies in reigniting newsstand, and it’s up to publishers to do that. Are Distripress members talking about how to get people back to retail to look for magazines? 

Bo: Addictive content is the best lure. 

Lizanne: My discussions haven’t focused on that area. I am hearing more about how different companies are adapting generally. That might include how to set up office space, the new hybrid work options; companies are looking at how they might restructure, coming out of COVID, to keep doing what they’re doing in a strong way but take on board the learnings form the last year.  

Joe: Do you see any good as having come out of COVID? 

Lizanne: For one thing, we’re having video calls like this. There is more contact between members outside of the Congress, and that’s great. It’s enabled me to connect members, because I am aware of the similar journeys different members are on and where a conversation might be interesting.  

Bo: Like our roundtable. 

Samir: People are sick of screens. That’s why subscriptions are going up, board games moving, and so on. People need an alternative to screens.  

Bo: Samir tracks launches, and domestically we’re seeing a spike. What do you see worldwide? 

Lizanne: There have been over 50 in the UK so far this year; so yes, quite a bit of activity. Also I am aware of two French publications which have launched off the back of celebrity TV personalities.  

Joe: From big publishers mostly, or smaller publishers as well? 

Lizanne: Definitely smaller ones too, with quite a few niche premium products: knitting, crafts, transgender, very nice, rich product. 

Joe: Bo has said that one of the consequences of the pandemic is that the speed of change will all happen quicker. Is that something you see? 

Lizanne: Absolutely correct. Including in the field of sustainability. I expect the accelerated speed of change will continue apace till we see what the world is going to look like after the pandemic. There has been acceleration in change in every part of the supply chain and we are going to have to figure out how to keep up with it. 

We Have Always Been at War with East Asia…And the Newsstand Has Always Been, Um, Challenging?

If I had made an entry in my diary every time someone told me in all seriousness that the single copy sales business was: Terrible, horrible, corrupt, inefficient, outdated, out of touch, wasteful, mobbed up, operated like the mafia, doomed, too busy ripping off publishers, retailers, wholesalers, consumers – to do a good job, that we should all be in jail for taking advantage of publishers…

… Then I would have a memoir considerably larger than a Brandon Sanderson novel.

Oathbringer-628rev-1-e1505943721525
That’s a mighty big book! (Source: BrandonSanderson.com

 

Nothing New Under the Sun

There is a verse in Ecclesiastes that says, “There is nothing new under the sun.” King Solomon wasn’t being a cranky old cynic when he wrote this. He was talking about the cycles of nature in life, not the rat race of the 21stcentury world. But while the complaints about the newsstand business are often the same year after year, the simple truth is that today’s newsstand sales business is not your fathers’ newsstand business. Or mine. And my father was in the newsstand business.

Last month industry guru and prophet Bo Sacks released two opinion pieces in his newsletter. One from former Ziff-Davis circulator Baird Davis and another from former consultant and industry leader John Harrington. Take a moment and check them out.

Both articles point out things that are very clear about the newsstand:

  • Sales are down dramatically
  • Sales for leading AAM audited titles are down even more
  • Retailers are cutting back on available space at the newsstand
  • There is continued consolidation at retail, wholesale and national distributor levels

I worked for Baird when I consulted for Ziff-Davis in its earlier print life. He is a good person and not someone I think of as gloomy or full of doom. In fact, I remember him as hard working and rather clear eyed. He succinctly points out the tremendous losses we have seen at the newsstand, especially with larger AAM audited titles. There is no denying the fact that a business that was generating about $5 billion in retail sales before the big crash in 2008 is now generating less than $2 billion. Harrington, who is also on the list of good people, is the former president of the Council for Periodical Distributors of America and a retired consultant. He points out that different participants in newsstand distribution have very different goals when it comes to profitability.

But We Knew This Already, Didn’t We?

Are industry leaders going to get together and “solve” the problem of the newsstand? Probably not because there are still too many competitors vying for space on the publishing side*. Moreover, all publishers, small, medium and large have a lot of other things to focus their attention on these days. Finally, it doesn’t seem like anything will happen without the seal of approval from the major wholesaler, TNG, or the largest national distributor, CoMag.

Captain Optimist Arrives

Earlier this week, fellow consultant John Morthanos tossed a bit of fuel on the fire in an opinion piece in response to Baird’s op-ed on Bo Sacks.  John makes the case that we should look beyond AAM numbers (I heartily agree). He cites the remarkable change in title rankings at chains like Barnes & Noble and Books A Million where traditional top ranked AAM audited titles (Think Cosmopolitan or House and Garden) have been supplanted with recent launches like Magnolia Journal.

He’s right. And as someone who is addicted to publishing stats, I’m endlessly fascinated by the report. But is that the point?

Single copy sales, the sales of print magazines at retail are down. Dramatically.

And,

Retail and wholesale consolidation has reduced a publisher’s ability to be profitable at the newsstand.

And,

If a segment of your business is not as profitable as it once was, and there is little chance of it returning to the same level of profitability, you tend to cut back your participation level and focus your attention on the parts of your business where you see opportunity.

It’s true that new titles continue to be launched on the newsstand. Some, like Magnolia Journal, Pioneer Woman, and the Centennial Media SIPs sell incredibly well. However, they don’t make up for the tremendous losses we see from former market leaders. How often can we rely on high level brand awareness to create winners at the newsstand?

New Industry Leaders

Let’s be realistic. Chains like Barnes & Noble and Books A Million are walled gardens. Their customers are actively looking for something to read – something in print. The B&N newsstand is well run and managed by a terrific magazine oriented staff. So is Books A Million. But that doesn’t mean we ignore the troubling signs that chains like Barnes & Noble have publicly experienced over the past few years.

Captain Skeptical?

It would be nice to think that every time a retailer chops a mainline in half or cuts 15 pockets from a check out that our wholesalers, national distributors and publisher quarterbacks rush in with the latest study from MBR and walk out with even more space. Half of it allocated to new, up and coming indie titles.

Maybe that does happen, sometimes. There are a lot of great people in our business and they do work hard to promote the category and maintain our space and viability.

But facts are facts and we’ve lost space. Despite some very visible, exciting and promising bright spots, sales are down overall.

From where I stand (I have a standing desk these days), these battles will continue to be hard-fought. We will never get away from the fact that store traffic is down. We have to acknowledge that there are a lot of distractions fighting for the public’s attention and money these days. Those of us who work in newsstand have to fight even harder to get the attention of the managers of magazine companies and the affiliated partners in the distribution chain because we are now a part of the magazine “media” business.

So, what to do? That’s easy.

Work hard. Vie for attention. Create your own promotions. Check your data. Prove your worth. Cooperate with others in the distribution chain.

Can you be both an optimist and a skeptic?

Yep.

*I am very much in favor of competition. Just in case you were wondering.

The Newsstand Can’t Catch a Break: Cosmo Gets Blindered

Any day now we could deluged by an onslaught of bad news from the upcoming AAM “SnapShot” report. Until then, we can contemplate the news that one of the nations’ leading newsstand magazines will experience some new retail challenges at two national chains.

Last week WWD Magazine reported that an organization that partnered with Hearst family heir, Victoria Hearst, The National Center on Sexual Exploitation, had won a major victory by convincing Rite Aid Drugs, and Delahaize (The corporate parent of Food Lion and Hannaford Brothers Supermarkets) to put privacy blinders over copies of Cosmopolitan Magazine because minors need to be shielded from Cosmo’s sexual content.

Let’s just pause for a moment and take a look at the August cover of Cosmopolitan.

Pretty darn racy, huh?
Sure….

Cosmopolitan does have a long history of cover lines that push the margins. But let’s look at it this way, going after magazines distributed at a check out rack in a mass market retailer is pretty low hanging fruit. Maybe you can keep your minor child from seeing some “Hot Summer Sex” on a magazines’ cover. But seriously, have you checked your tweens’ Snapchat?

Victoria Hearst, a member of the founding family of the Hearst publishing conglomerate is reported as saying that she wants Cosmopolitan to be sold only to adults and have the cover wrapped like an adult (porn) magazine.

There is so much snark this publishing professional wishes to throw in the general direction of Victoria Hearst. However, unlike Ms. Hearst,  I will resist the temptation to go after such low hanging fruit.

For the record, Cosmo will be placed behind plastic blinders. That should make life slightly more challenging for wholesale merchandisers and add some costs to the single copy sales department over at Hearst. Adult magazines, porn magazines: Penthouse, Hustler, and dozens of other more aggressively sexual titles are often sold in opaque polybags that show only the magazine logo.

The Hearst corporation is quite possibly one of the most successful magazine media companies in the world. They have done some incredible work in maneuvering their  properties through the ever-changing digital and print landscape. Last year, they successfully launched the Dr. Oz magazine, a title that has half a million subscribers and sells over 300,000 copies on the newsstand. In a December 2014 interview with industry analyst Samir Husni, Hearst President David Carey sounded pretty upbeat despite the challenging environment most publishers had just navigated.

Let’s try and be serious for a moment. Or not. Are parents really all that concerned with the “smut” that their children see as they walk through retail stores? Don’t their kids already have their noses in their smart phones? And isn’t it possible that they are seeing a lot more graphic content than “Hot Summer Sex” while they browse their Snapchats, WhatsApp and Instagram pages?

In the second half of 2014, Cosmopolitan reported single copy sales of 632,000 copies with a retail sales value of $15.7 million. That sounds like a lot. Until one considers the fact that in the second half of 2007, Cosmopolitan reported single copy sales of 1.896 million copies at a retail value of $49.7 million.

That should get your attention and put the newsstand crisis in perspective, what?

Moreover, it also might explain why it feels like Rite Aid and Delahaize shrugged and said, “Whatever” when Ms. Hearst’s’ organization demanded they shield children’s delicate sensibilities from smutty cover lines.

Do you think the National Center will target these magazines next?

In the end, this campaign seems like nothing so much as an attention seeking malarkey. Children are much more at risk for injuring themselves while they walk around staring at their smart phone screens. Of course, that would presume they are walking and not sitting on the couch watching a smutty movie on Netflix.

If I learned anything while raising my two daughters, it was that open, honest, frank and age appropriate conversations got all of us much further in life than trying to hide, shield and keep them clear of today’s culture.

How would I suggest a parent handle a Cosmopolitan cover line? Simple: “Those are magazines for grown up women. Look, here’s Discovery Girls.”

That doesn’t seem hard, does it?

For the record, I’d like to point out to the folks at the National Center on Sexual Exploitation that this….

Genesis Magazine - 2011
Genesis Magazine – 2011

…is a pornographic magazine. About the only place you can see one in the wild would be in an adult bookstore and a few convenience stores or traditional newsstands.

However, this…

MILEY CYRUS at Cosmopolitan International Covers, March 2013 Issue
Miley Cyrus tried to save the newsstand back in 2013.

Is a well-respected, multiple award-winning national women’s service magazine produced by a much-admired U.S. corporation.

Other than the fact that they are both magazines, there’s really no similarity.