Kable Distribution Services: Another Industry Goodbye
Yesterday morning, publishers were informed that Kable Distribution Services Inc. (KDS) is going out of business.
The news was conveyed in a remarkably distant manner, in a general letter that speculated that its recipients would not be astonished or blindsided by the news.
True, the industry was rife with rumors that Kable was holding on by a thread — but those rumors have been going around since I got into this business, more years ago than I care to count. It is also true that TNG, North America’s largest wholesale group, had already threatened to refuse Kable product, which would be a disaster large enough to put a national distributor out of business. However, TNG’s threat was reportedly due to a squabble over a project that KDS’ sister division, Kable Packaging and Fulfillment (KPF), picked up; and it seemed reasonable to assume that KPF would drop that project before allowing KDS to shutter.
The story behind Kable’s closure, as I tracked it, is this: Hudson Retail, owner of airport stands throughout the U.S., decided to no longer receive their magazines through TNG, and instead to use KPF to deliver. The backlash from TNG, wherein they reportedly made good on their threat to refuse service to Kable-distributed titles, leaves publishers scrambling for national distributor alternatives, and KDS employees looking for work.
It’s perplexing. The dotted lines in this business are a bonanza for conspiracy theorists. Just for starters, TNG’s parent company, the Pattison Group, owns Comag, the national distributor to whom Kable has directed publishers in search of replacement distribution. Hudson News, who no longer owns Hudson Retail but still has, I am told, representation on its board, also has a minority stake in Comag. When the Pattison Group purchased Comag, there was much speculation as to when the industry would start to further consolidate under a single national distributor, or perhaps move past national distribution entirely. The falling of this shoe could seem, to a linear thinker, and despite some indications that lead to contrary conclusions, like a direct result of that purchase.
It’s scary. The loss of Hudson Retail can’t add to TNG’s health, and if TNG sneezes, we all catch cold. After all, TNG is responsible for, well, almost all magazine distribution in North America, and its profitability, or lack thereof, is tied into the dwindling size of a publisher’s remit.
And who’s to say it will stop with Hudson Retail? The shift to direct, represented by Hudson’s disposal of the wholesaler middleman, could easily spread to other airport retailers and beyond. Our industry continues to change rapidly, and publishers must try to keep their heads above water in the midst of it all.
And mostly it’s sad. There are lots of good people at Kable, and many have been there for years or decades. The ones I’ve spoken to today are trying to help their clients transition while dealing with a looming transition themselves.
I wish my friends at Kable luck, and hope to see them in our industry for many years to come.
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.