Digital Publishing
4 mins read

The newsstand apocalypse: what does the future hold for publishers?

At the invitation of the Magazines and Books at Retail (MBR), I attended their June 11 to 13 Conference. After Baird Davis and I had written several articles expressing concern that the mass market magazine distribution channel was near collapse, which appeared on BoSacks’ daily newsletter, the invitation was extended to hear what MBR was doing about the situation and talk one-on-one with key channel players. (Baird and Bo were also invited, but each were unable to be there due to previous commitments).

Our dire view of the channel was based on the fact that, beginning in 2008, magazine retail unit sales have declined annually by more than 10%; and that cumulatively the retail dollar value of the market is down by more than 60%. In the “last good year”, 2007, magazine sales were nearly $5 billion, and last year they were below $2 billion. When I was still publishing The New Single Copy, which I retired in mid-2015, I regularly asked publishers, national distributors, and wholesalers, “Where is the bottom?” Without fail, the answer was, “I don’t know.” My conclusion was it was “O”! In our articles, Baird and I urged the major publishers to focus their collective energies on the newsstand, or it would eventually vanish. And although it was clear that the largest publishers had become disenchanted with the channel and lacked confidence in it, they would suffer, particularly when launching new titles, if it were to disappear.

The Conference

The presentations at the MBR Conference were universally informative and professional. In order, they were:”Today’s Retail, Today’s Retailers”; “What if We Leveraged Everything – The Latest Retail Category Presentation”; The Miller Zell “New Consumer Insight Driven Store Display Research Study”; and “Front End Focus”. The follow-up discussions of these topics by channel executives were clear and responsive.

Do you recognize the central focus of all of the above presentations? Simply, that if the channel tells its story to the retail community, display space will be maintained and maybe even expanded.

Editorial Opinion

Sales are not down by approximately 60% over the last decade because retailers are reducing space; retailers are reducing space because sales are down by approximately 60% over the past decade! Sales have been reduced by more than half because the warp speed development of digital technologies has created new media platforms that have decimated the sales of magazines, particularly the celebrity weeklies that overwhelmingly dominated retail in the years up to 2007. Additionally, they are down because major publishers, desperate to maintain their advertising rate bases, have recklessly promoted subscription sales, at times offering a year’s worth of issues for the cost of a single retail copy.

In other words, it has been our (Baird Davis’ and mine) contention that if there is any hope of saving the mass market retail distribution channel, it will require the focus of the largest magazine publishers, working with wholesalers to restructure the financial model that has been merely fiddled with over the past 20-plus years of chaos; and, particularly from my perspective, for them to also promote retail/newsstand sales with the same creativity and energy that they have devoted to subscription marketing. Unless something is done to address consumption, the channel will be capable of delivering copies to retail displays, but at the same time will also continue to sell less and less of them. That does not bode well for the future.

Clearly, the program at the MBR Conference was not directed at the forces who might be able to change the direction of magazine retail sales. Why not? Well, for one, I don’t think there was a single publisher executive there above the newsstand level. If there was, they were not from a publisher with the capacity to have a sizeable impact on retail marketing.

Well, let me be fair. The importance of dealing with consumption was mentioned at least once. During an executive panel, Jay Felts, president of Comag Marketing Group (CMG), said, “There are two big areas of challenge. One is cost pressure within the supply chain; the other is finding a way to drive consumer consumption. If we fail to make positive progress on the second, the first really doesn’t matter.” Isn’t this reasonably similar to what I wrote a couple of paragraphs back.

I don’t want to name names, but my individual conversations with executives about reaching back up the channel to key publishers were not optimistic.

Instead of continuing to direct their marketing efforts toward retailers, who in fact would love to sell more magazines, the leaders of the distribution channel – wholesalers, national distributors, and newsstand directors – should be developing and putting on a presentation to the CEOs and COOs of the largest publishers that spells out the ugly truth. That if you, the leaders of a once great business, do not take dramatic and dynamic action, there will no longer be a newsstand left where you can introduce and sell your beautiful publications!

What Will the Newsstand of the Future Look Like? What Next?

There is near universal agreement that without some channel changes and no change in consumer newsstand marketing, the long malaise of the past decade will continue. Will it reach zero? Probably not. But the following scenario is not too farfetched. Retailers will continue to reduce space, eventually in mass merchandisers like supermarkets, drug stores, and combos, eliminating mainlines, and end up with only checkouts. Wide assortments of magazines will be found only in large bookstores and terminals. Major publishers will still have the opportunity to introduce new titles and reap subscriptions from blow-ins, and maintain brand awareness, if they are willing to pay increased costs of getting to those markets. Wholesalers such as TNG and Hudson will likely be the means which publishers get to those remaining markets, and they are also likely to expand the range of products they deliver and merchandise. However, medium sized and smaller publishers will have a much more difficult time in finding a home.

Not the magazine retail distribution channel we once knew.

John Harrington, President at John Harrington Consulting LLC

Reproduced by kind permission of Bo Sacks, President of Precision Media Group and founder of the world’s oldest publishing newsletter.