It’s no secret that the newsstand is not the revenue driver it once was for magazines. However, that hasn’t been the case for Bauer Media, a company that places heavy emphasis in that space with a portfolio that includes In Touch, Woman’s World and Closer.
While data from MagNet shows that overall newsstand revenue continues to decline between 5-10% every quarter, it hasn’t seemed to impact Bauer here in the U.S. Evidence of that is the company is bullish in launching new titles—about a half dozen just in the past couple years.
Of course, the question is: Why does the newsstand work so well for Bauer? EVP Sebastian Raatz explains.
You’re heavily dependent on newsstand sales, which is somewhat counterintuitive in 2016. Why are you staying with the newsstand model?
Raatz: It’s counterintuitive if you go by conventional wisdom, yes. But there are categories on the newsstand that do very well (under admittedly adverse circumstances) that allow you to launch titles and earn a good return.
Let me elaborate: I believe that the basic attractiveness of the magazine as a medium hasn’t changed. Not one bit. That’s probably controversial, so let’s talk about a few select reasons for the newsstand decline:
First, availability. The number of retailers that carry magazines has shrunk significantly between 2010 and today—depending on how you count them, by -25% or even more—mainly through a series of wholesaler bankruptcies. A smaller retailer network obviously has a direct impact on sales.
Second is the eradication of boredom. What do you do when you’re waiting in line at the checkout? Right… watch cat videos on Facebook. Magazines are impulse purchases. We don’t know much about how seeing a magazine converts into a purchase. But we do know that fewer shoppers see them in the first place because they look at their smartphones.
The last thing is consumer needs. This is the conventional wisdom: “People just don’t need magazines anymore.” Sure, the sheer utility of a magazine reporting last week’s news has disappeared. And if you look at the categories that have lost the most, it’s those that rely on information that you can easily get elsewhere, especially news about politics, celebrities, teen stars, and even fashion to a degree. These categories represent 36% of newsstand dollars, but 56% of all newsstand dollar declines between 2010 and 2015. The rest are doing better, and there are many categories that are actually up in the same time frame—again, all that despite the adverse trends I mentioned above.
The easy story is “newsstand sales are down,” and while it’s true, it’s an undifferentiated view that most of us industry insiders get sucked into too easily.