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:

Wisconsin 3
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.

 

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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.

Maybe We Should Rephrase The Question

 

 

The next round of AAM and BPA reports are due out soon. Come on, you know where I’m going with this opening paragraph. The numbers will be released. Then the writers for Folio and Media Bistro and all the others will jump in and recite the numbers and, no doubt, newsstand will not look good. Someone will publish something that gives us all a stern warning.

Someone will ask, “Where’s the bottom for newsstand? ”

People will get defensive.

An industry thought leader will write, “How can they maintain these losses? Surely no one is going to the newsstand anymore!”

So I am thinking, maybe we should rephrase the question. Because, frankly, at this point, who knows?

So let’s not ask, “Where is the bottom?” and instead ask:

“What is working?”

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This is not working.

“Why is it working?”

Dominicks Racks
Clearly that didn’t work.

“How do we replicate that?”

“How do we engage our publications’ audience and encourage them to buy a single copy?”

We know single copy sales are a declining industry. But even within that decline, there are sparks of light. Why is that? Was it luck? Deliberate?

There are publishers who are innovating and seeking out new markets. Some are in non-traditional markets, others within the tried and true. Who are they and what are they doing? Is it niche specific? Title specific?

Can we turn this around?

I think it’s highly unlikely that we will see some sort of massive turnaround. As a business, we shouldn’t be looking for or hoping for the next TV GuideCosmopolitan, or People. Instead we should be looking for the next Backwoodsman or grow an emerging category like adult coloring books.

Keep in mind, our industry has adapted to and accepted many changes that some traditionalists thought would never change. So the next challenge is to adapt to the new realities we face (and share) at retail, the same ones that other marketers are facing, and see how we can continue to attract an audience.

So my question to you is:

What’s working out there? How did you do it and can you do it again?

 

 

There’s An Alien On The Roof

The conversation below is an amalgamation of about twenty different conversations I’ve had since 9:35 AM Wednesday, December 9th. If you don’t quite get the context, I’ll fill you in. Later.

We denizens of the newsstand world have apparently decided to mess with things. Again. Will this outcome be good? Well, for some former employees, no. For some publishers who may not see payment for product sold for a long time, no. For some publishers and their employees who may miss an issue on the newsstand and thus miss their advance payments and final payments on an issue (or two, or three), no.

But in the long run, the end result may be good. It is certainly a game changer. We should have seen this coming down the road. It could be good. We’ll see. Stay tuned.

In the meantime, try and find some humor in a phantasmagorical mess up of slightly less than epic proportions.

A Recently Overheard Conversation

Publisher: “So what does this letter from my national distributor mean?”

Consultant: “It means that they’re going out of business. Right now.

Publisher: “WTF? Now? That’s crazy! Why?”

Consultant: “Probably because one of the big wholesalers won’t carry their product anymore.”

Publisher: “WTF? That’s crazy! Why?”

Consultant: “The wholesaler objects to the distributor being a part of a company that is now competing with them for retailers.”

Publisher: “That’s crazy too! Is that legal?”

Consultant: “Who knows anymore. Maybe in some context. Maybe not in another.”

Publisher: “Well this January issue is a pretty big deal. Now how are we going to get it out?”

Consultant: “We have to find you a new distributor.”

Publisher: “We’re supposed to ship next week.”

Consultant: “I know. This will be a lot of fun.”

Publisher: “What a mess!”

An awkward silence ensues.

Publisher: “Well this is great. Did I also tell you that my printer screwed up my subscription insert for this issue?

Consultant: “No, that’s terrible.”

Awkward silence.

Publisher: “And, the server went down and tanked of my digital. My tech guy’s in the backups but this could take some time. This is the worst timing ever.”

Consultant: “That’s even worse.”

Another awkward silence. There is a loud humming noise on the cell phone connection. 

Consultant: “So what are you going to do with alien spaceship that just landed on your roof?”

Publisher: “They can wait. I’m busy.”

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Good luck with that.