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someone told me, in all seriousness, that the single copy sales business was: Terrible, horrible, corrupt, inefficient, outdated, out of touch, wasteful, mobbed up, operated like the mafia, doomed, too busy ripping off publishers, retailers, wholesalers, consumers – to do a good job,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.” 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. 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.

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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.

Local Publisher Solves Distribution Conundrum

Editor’s Note: Periodically, our lucky correspondent, Felix Chartae brings us news from the present, news from the future and news about our favorite publisher, Outside the Groove Media of Eagle, CO.

This week The Foredeck brings you a report about how this plucky publisher solved a newsstand distribution problem plaguing many local magazine publishers.

 

By Felixe Chartae, August 21, 2014

It seemed like a “no brainer” for Outside the Groove Media to purchase the assets of a failing local publisher. “Rocky Mountain Triathlete magazine featured many of the same sporting activities that we covered in our national magazines,” Said Peter Westleigh, CEO of Outside the Groove, “And we bumped up against them repeatedly in sales calls, industry events, even promotional activities. We were  were sure we could fold their editorial and sales teams of all three titles into our office.”

But nothing could prepare Westleigh or his circulation team for the onslaught they were about to face shortly after the first issues of their new acquisitions hit the stands.

“It was almost as if the entire state had contracted TMB,” said Wendy Ashburnham, the Audience Development Director for Outside The Groove.

As reported earlier, TMB, or Temporary Magazine Blindness is a disease that the CDC in Atlanta, GA has described as “The unusual condition when magazine advertisers, sales representatives or publishers and employees of magazine publishers walk up to a newsstand and fail to see their magazine on display for sale on the newsstand even though the magazine is, in fact, on the said newsstand.”

Ashburnham, a long time veteran of magazine circulation, admitted to having little interaction with the newsstand world prior to the acquisition of these three titles. “We have a distributor who talks to the wholesalers and frankly, I could never figure out what language they were speaking. So I got a consultant and told him to handle it and not bug us too much.”

That seemed to work well for the publisher. “Occasionally,” continued Ashburnham, “Peter would call me about not seeing our national titles in his King Sooper, but I could usually get that fixed. Usually I just dropped off a copy or two on my way home.”

“Once we put those locals on sale, Holy Hannah, Katie bar the door!” said CEO Westleigh.

Westleigh and Ashburnham reported that their office was inundated with calls from outraged advertisers who claimed they never saw one single issue of Rocky Mountain Life, Triathlete or Outdoors magazines. These were followed up with panicked emails from sales representatives who claimed the same thing and began to offer “make goods” to the irritated advertisers.

Whenever Westleigh went out to the newsstand, he too could never find any of his new titles.

“It was certainly a worrisome transition,” said Wendy Ashburnham.

The troubled circulator called in her consultant, Laki Patrika to see if he had any ideas.

“I never know what to do in these situations,” admitted Patrika. “Mostly because there are so many possibilities. Sometimes, the advertisers and sales reps are spot on. The magazine is not there.”

“But,” continued the consultant, “Usually it’s because it’s the end of the sales cycle and what hasn’t sold was returned and the new issue isn’t in yet. Or sometimes, the magazine is not authorized for that store, or sometimes it’s authorized for the chain, but not that sized rack in that store. Or sometimes the magazine went on sale late, or early. Or it’s a merchandising problem and we have no real control over that. Or sometimes the magazine was in that store, but nothing sold and eventually it was removed from the distribution,” he said.

“And this is weird,” Patrika continued with his monologue, “Sometimes they just don’t see it, even though it’s right there on the front lip.”

Patrika did not know about the CDC’s “TMB” diagnosis.

“Huh,” said Patrika when this correspondent informed him, “That explains it.”

The solution that Ashburnham and Patrika came up with is both ingenious, probably not helpful to the local wholesalers, but has seemed to solve the problem of irate advertisers.

Peter Westleigh,  Wendy Ashburnham and Laki Patrika of Outside The Groove Media discuss their innovative solution to solving their latest newsstand conundrum. Source: in-this-economy.com)
Peter Westleigh, Wendy Ashburnham and Laki Patrika of Outside The Groove Media discuss their innovative solution to solving their latest newsstand conundrum. Source: in-this-economy.com)

Outside the Groove hired their own merchandisers to follow the local wholesaler merchandisers on the days that the three new magazines go on sale. As soon as the merchandisers put up the magazine, the Outside the Groove merchandisers move the magazines to the front of the rack, then superglue the magazine to the base of the rack so the copies can not be removed. This insures that the copies stay front and center for the life of the on-sale period.

“Of course it kind of stinks on the sales side,” said Patrika, “And then there’s the clean up at the end of the sales cycle.”

This was solved by using a box cutter to slice the magazines out of the rack and get them into the returns bin.

“But the level of complaints from advertisers and sales staff has declined to almost zero,” said Ashburnham, “And that means we can deal with other issues.”

At this point, our interview was interrupted when CEO Westleigh walked in and asked, “Hey Wendy, how come this month’s issue of Rock mag isn’t in my King Sooper.”

“Like that,” said Ashburnham.

 

 

 

 

 

Things Placed In Front of The Magazine Rack Part 7 0f…The Fully Charged Edition

This just in from our US News and World Report correspondent, Mark White, V.P. of Specialty Marketing. I’ll let his words describe what he found:

The good news is that our new Secrets of the Civil War got placement by checkout that we didn’t pay for. The bad news, of course, is that the retailer committed such assault and battery against its highly profitable magazine business that no shoppers will actually see our bookazine. More bad news: The title is not displayed on the store’s mainline.

Lasts just as long, costs less, and delivers even fewer profits…

Encroachment at the front end has long been an issue for the publications that participate in check outs, with the encroachers enjoying the benefits and the “encroachees” left scrambling to defend their turf. “Things Placed In Front of The Magazine Rack” is part of an informal calculation I now consider when budgeting for check out programs.

Although in this particular case, we’d have to argue that Mark’s “encroachee” title didn’t get much benefit because of the dump display of batteries.

I wonder if there is an algorithm that would define this? Could it be turned into a charge back “Marketing Fee”? Who would have to pay the carrying and inventory costs? I’ll have to get the accounting department on that right away.

In the meantime, Mark should know that I found Secrets of the Civil War on the mainline of my neighborhood supermarket and I thought it was a really good read (I bought a copy).

If you have a good example of “Things Placed in front of the Magazine Rack”, please forward them. Checkout, mainline, specialty rack, all are accepted and appreciated.