William Ford Gibson is an American-Canadian writer who has been called the "noir prophet" of the cyberpunk subgenre of science fiction. It was Gibson who coined the term "cyberspace" in his short story Burning Chrome. He is also responsible for one of my favorite quotes, which I often used to open my lectures in the early 2000's, "The future is already here -- it's just not very evenly distributed."
In our industry nowhere is that more evident than at the Digital Innovators Summit (DIS) held each year in Berlin. I have had the privilege to attend it for seven years. In doing so I have witnessed the digital transformation of publishing media firsthand and with a global perspective. It is partly this experience that enables me to speak with authority about our industry and its future.
Publishers Are Finding Profits in Diversification I think the most obvious takeaway from almost every presentation is that the crisis of confidence is over, and we are now in a better state than we were five years ago.
There is now overwhelming proof from multiple global sources that digital can supply revenue and profits. Subscriptions are real and readers, especially those that trend younger, are willing to pay. Parallel to that is the formula of: Quality + Specialization = Premium Pricing. CLICK HERE FOR THE ENTIRE ARTICLE
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The haptic experience between print and digital is mainly a different feel, a different sensation and, perhaps above all else, a different expectation. Print doesn't offer distractions other than the words and thinking on the page, while the digital experience does.
I could quibble over a long list of essentially minor points in Baird Davis' "Modest Plan", but the fact is the underlying message - something must be done about the newsstand - is undeniable.
Two questions hang over the future:
Can and will publishers make aggressive steps to create a manageable distribution channel? And; If yes to that, can the apparently inexorable decline in sales be halted so that a manageable channel can survive?
As I have said on many occasions, there is little history that indicates publishers are willing to embark on a cooperative effort to revamp the channel, but perhaps staring into the abyss may rattle their long-demonstrated reluctance.
As for sales, magazine retail dollar volume was $5 billion in 2007 and is likely to be little more than $1 billion by the end of 2018. For years, everyone was asked the question, "Where is the bottom?" For years, the response has been, "Who knows?" Which translates as zero, and which leads to the question, "Why would anyone commit to an effort to restructure, if the market will, like the old soldier, just fade away?
Clearly, if publishers are going to recreate the channel, they must also commit to improving the sales environment. It's a two-part project.
I will once again express my skepticism about the likelihood of publishers undertaking the challenge. However, if such an ambitious task were to be initiated, I offer my modest suggestions about what elements it might have to contain.
Baird's suggestion of establishing a newsstand public utility is right on. Players on each side - publishers and wholesalers - would have to put some ego aside, but when the alternative is the abyss, that shouldn't be too difficult. Perhaps publishers, at least some of the largest, might be able to partner in some fashion with the two remaining wholesalers [1]. If such a utility could be established, it might operate on a modification of the a so-called "pay-for-service" model that was part of the industry discussion back ten or fifteen years ago, and it would be available to all publishers willing to pay for the offered services. CLICK HERE FOR THE FULL ARTICLE
The original intent of the recent newsstand articles that John Harrington and I did, at Bosacks' insistent urging, was to inspire a vigorous discussion about the often misunderstood process of selling magazines at retail. In that regard we hit a nerve - the response has been hefty and spirited. Thank you to everyone that joined the discussion.
Now that the discussion has begun in earnest I want to offer some more grist to the dialogue mill. In this note I'll present a rough-hewn plan for protecting the embattled newsstand channel. It combines ideas gained from recent reader feedback with those based on my own experience as a circulator and long time newsstand observer.
Publishers Troubling "Blind Eye" Approach
There have been many attempts at newsstand channel reform and continuous warnings, twice a year from me, of the dangers that lay ahead for the channel. All of this to no avail. The reform efforts never came to fruition and the warnings have fallen on the deaf ears of publishers.
What appears to have happened is publishers adopted a fait accompli attitude toward the newsstand; seemingly content to live with decreasing sales and higher newsstand service costs. This doesn't mean, however, that publishers weren't acutely aware of the adverse economic effects of - declining sales, reduced efficiency, increased processing costs and less service from national distributors and wholesalers. They knew there was a problem, but, as always, they seemed perplexed about what to do.
In retrospect it's become obvious that publishers seriously underestimated the effect of the dynamic changes occurring to the channel infrastructure. In 2009 major wholesaler Anderson News dropped out of the business. In 2014 mega-wholesaler Source Interlink followed suit saying the business wasn't profitable and hadn't been for a long time. These two wholesalers at one time represented nearly 50% of the magazine retail distribution volume. A total meltdown was averted in 2014 when The News Group (TNG), with support from Hudson News*, scooped up the Source Interlink leavings. In doing so they "won" the long brutal wholesaling war of attrition.
*It should be noted that Hudson News remains in the magazine wholesaling business, but in a non-competitive manner with TNG.
The result - TNG emerges at the top of the newsstand wholesaling heap, controlling 75% to 80% of the magazine wholesaling volume. Click here for the complete article
