If the newsstand goes down, how much of the industry does it take with it?
The question is being debated by publishing industry veterans, a number of whom agree that “publishers have seriously underestimated the possibility of collapse of the newsstand channel; that such a collapse could take place within a year to 18 months; and that unless publishers begin to work together…there isn’t much hope of survival,” says Linda Ruth in Folio:.
Ruth reports on the current state of affairs in the magazine distribution channel, and it’s eye-opening to say the least. According to Ruth:
• A large national distributor recently sent its publishers a list of all the wholesalers that they intend to cut off if certain financial terms aren’t met. The list included…pretty much everyone.
• A second national distributor has indicated to one of the major wholesale groups that their latest financial proposal, if implemented, will result in the termination of their business relationship.
• Two of the four major national distributors have begun to refuse to cover bad debt liability for their publishers.
So, where does this leave the magazine publisher? Is there no alternative if the distribution channel goes down?
“An industry veteran shared with me the following scenario: In the event of channel collapse, the top publishers will go direct to the top five retailers in the country. They are setting up the relationships and the distribution channels now. Every other publisher will have to scramble to follow. But these top publishers aren’t throwing a ring out of the lifeboat just yet.”
“But we do need to look to setting up new ways of reaching these retailers. Our current channel partners are telling us explicitly, in every way they know how, that they might not be here tomorrow,” Ruth writes.
“Can we live without newsstand? Of course we could survive. But newsstand remains an important, if not indispensable, part of the distribution of consumer publishers large and small. There is no question that a channel collapse would take many publishers down with it.”
“For most publishers, working independently at this scale, away from the umbrella of their national distributors, is not a possibility. They rely on those national distributors to find the solutions and provide leadership. But many of these publishers have ideas to contribute. For example, one industry watcher suggested, what about a partnership with one of the largest distributors of print product in the country?”
(Hint, it’s Amazon.com)
This is getting interesting folks, and is a story we’ll follow closely.