Anderson News Is Asking for More

The product is what this is all about, remember?

By Linda Ruth
01/15/2009 -04:19 PM

By now everyone has heard that, like Oliver Twist, Anderson News has asked for more.

Everyone knows that wholesalers have lost the knack of profitability—indeed, haven’t been profitable for many years now. Everyone knows that if wholesalers don’t become profitable, the system may not continue to work in the long term.

What is equally relevant is how profitable are the publishers with their newsstand sales. Paper is up, postage is up, sales are down, and many publishers are exploring other options to newsstand distribution.

Certainly newsstand distribution is still very appealing in many ways. There is still a lot of prestige associated with having your magazine in the corner store. Advertisers still like it. Readers still like it. And of course editors and publishers still like it.

But as the various channel partners struggle for profitability, the publisher’s share is eroding. Checks are smaller, fewer—sometimes vanishing entirely. We talk about making newsstand work—it has to work for everyone, including the one that provides the product. The product is what this is all about, remember?

A lot of fingers have been pointed at the publisher. We need to cut waste, reduce rate bases, stop forcing copies into a system crying out from overload. But have you ever seen a publisher reduce draws and fail to bring up efficiencies? I have. Have you ever seen a publisher cut the waste out of their distribution—the unsold copies, the unproductive dealers, the ones that sell a copy or fewer an issue—only to return three months later to find twenty percent of their distribution back in these low efficiency retailers? I have.

I’m not saying that there is a culprit in this situation. I’ve been here since the whole consolidation that gave rise to this started, and I’ve seen distribution partners struggling to do their job and create maximum sales and profitability for everyone. But that means the answer isn’t so simple either. It can’t be solved alone by one member of the channel—in this case the publisher.

What really concerns me about this initiative is its potential irreversibility, if adopted. Every contract you have is re-negotiable—except that with your wholesaler. A discount once given is never reversed. Nor is it localized. What is given to one wholesaler must be given to all; what is given once can never be reclaimed. The publisher may giveth, but the publisher does not taketh away. Not in the world of newsstand sales.

So we need to walk softly when it comes to this, and enter any arrangements carefully, with a great deal of thought. Not something easy to do between now and February first—the Anderson deadline—is it?

Blog: Anderson Broadside Leaves Publishers Little Choice

The Other Shoe Drops: Anderson News Announces Major New Distribution Requirements

Linda Ruth is Principal of Publisher Single Copy Sales Services.