Bezos, Pecker, and the American Magazine Business
Last week’s bombshell post from Jeff Bezos, in which the billionaire Amazon founder and The Washington Post owner revealed AMI’s “offer he couldn’t refuse,” relates directly to consumer magazine publishers and their distribution channels. The reason: AMI is owned by hedge fund company Chatham Asset Management. Chatham Asset Management also owns American News Company, which through acquisition now controls about 70% of the magazine distribution channel in the US, including former behemoth wholesaler The News Group (TNG); national distributor Comag; TNG Specialty (formerly Ingram Periodicals), the exclusive distributor to Barnes and Noble and other bookstores; and Magnet, the company that compiles and provides sales data to publishers.
And of course, David Pecker is chairman and CEO of AMI, which owns the National Enquirer.
As we all now know, AMI threatened to release sordid photos and texts of Bezos if the latter would not stop an investigation into the National Enquirer’s information sources and whether the tabloid’s targeting of Bezos was politically motivated. Bezos refused the offer. Since then, enough additional blackmail stories have surfaced, from Ronan Farrow and others, that it’s shaping up to be a “me too” moment for journalism; an irony, given that a National Enquirer editor was involved with another scandal, one having to do with digging up dirt on Harvey Weinstein’s victims.
It’s a big story. It’s got a hero and a villain. It’s dishy and fun to read about. And it’s hard to say how this will affect US consumer publishers -- it still hasn’t become clear how Pecker’s acquisition of TNG and its related companies will affect us. But our industry does not appear to be as abuzz as one might expect it to be.
“I haven’t heard from anyone,” said an outspoken industry consultant whose views I respect. “It’s an indication how far we’ve fallen. Just another day in the life of our business.”
How far indeed. Newsstand was always, in some ways, seen as the seamy underbelly of an otherwise respectable business, what with the old days, and the mob, and the magazines falling off the backs of trucks. It’s traveled far, over the past four or five decades, to clean up its image. AMI, with its flagship National Enquirer, has had its own non-mainstream role to play. But with its mainstream magazine acquisitions, along with its current close connection to the distribution channel, it has become way more than mainstream. It’s become the most powerful company in US publishing.
And this goes beyond a formerly-sketchy publisher stepping up to play a bigger role. There’s the morality aspect: is this what we as an industry have come to? Is it who we are, who we are going to be? There’s the intelligence aspect: anyone else think blackmailing Bezos would be a good idea? And there’s sustainability, already in question in our business. Everyone I’ve spoken to so far today is in agreement: AMI is toast. Are they? And what does that mean to their sister companies, the ones now so crucial to our business?
I’d like to clap my hands sharply, like a teacher in front of a fractious class, to get publishers’ attention. “Hey,” I’d like to shout, “print still matters! Retail still matters! It’s still the lifeblood of plenty of publishers. It still generates many millions of dollars of revenue. It can still be protected, nurtured, saved.”
But who will lead that charge? Not, it would appear, David Pecker.
Linda Ruth, as president of PSCS Consulting (www.PSCSConsulting.com), offers communication companies worldwide the keys to magazine launches, search engine optimization and audience development online and at retail. She is a pioneer in the fields of Online Audience Optimization (OAO) and gamification for content publishers. Her books, "Internet Marketing for Magazine Publishers" ; "How to Market your Newsstand Magazine"; and "Secrets of SEO for Publishers" can be found on Amazon. Find her online at Google Plus, Magazine Dojo, LinkedIn, and Twitter @Linda_Ruth.