What Everyone Gets Wrong About What's Wrong With The Newsstand
People in Magazine Land love to talk about how stupid our industry is, and no part of the business comes in for more ridicule than the shrinking newsstand system.
To paraphrase that famous publishing and newsstand entrepreneur Larry Flynt, opinions about the newsstand system are like … well, let’s just say that everybody’s got one. And many of them are rather misinformed.
Let’s take a look at some of the questions that keep coming up about the retail sale of magazine copies:
Q: Why do some publishers keep offering annual subscriptions at prices that are barely more than the cost of a single newsstand issue? Won’t people just buy the subscription?
A: The publishers would really like that. For magazines, a subscription sale is far more valuable than a single-copy sale. A subscriber can be renewed (at higher rates), sold other subscriptions, signed up for newsletters, and lured to events. And her name can be rented to other publishers and marketers. (Shhh, don’t tell.)
Erratic newsstand sales can cause poor-selling issues to miss their ratebase, the minimum circulation it guarantees to advertisers. But a subscriber can always be counted, for stinker issues as well as blockbusters.
Most of the money paid for a newsstand copy goes to intermediaries, not the publisher. Not so with a subscription sold directly to a consumer.
Q: But don’t those $5 monthly subscription offers hurt newsstand sales? The newsstand experts keep calling this a stupid tactic.
A: That’s because newsstand experts often miss the big picture: There are many reasons to distribute copies for retail sale, and most have little to do with actually selling copies. One of the main benefits of newsstand distribution is finding new subscribers for a magazine, both from newsstand buyers and newsstand browsers.
Seeing a title on sale reassures advertisers that the magazine is widely distributed and puts it on the radar of potential advertisers. That’s why many publishers distribute aggressively to the cities where its advertisers and their agencies are located. Some publishers pay huge fees for distribution at airport shops – more than they could possibly make up from sales – because air travelers tend to be so affluent and influential.
And look at all the digital-native publishers who have launched good old-fashioned print magazines: Newsstand sales are not covering their additional costs. But the cachet from having a magazine and having people see it does wonders for a web site’s credibility and traffic.
Sure, some more titles probably need to bite the bullet and dial back their ratebases. But the primary reason to do so is not to sell more newsstand copies.
Q: Newsstand distributors keep criticizing publishers for cutting back on the number of newsstand copies. Doesn’t that hurt sales?
A: Ah, the old “Reduce the draw, reduce the sale” canard. It’s been an excuse for inefficient newsstand management for all of the many moons I’ve been in this business. Distributors only see the revenue from copy sales, ignoring the cost of printing, paper, shipping, distribution fees, etc.
Sure, fewer copies means fewer sales. But done properly, such as no longer sending copies to stores where they don’t sell, cutting the draw can boost a publisher’s profitability, which of course is what really matters.
Q: I keep hearing that the newsstand system is in disarray and needs to be fixed. Why don’t they fix it?
A: Yeah, at least several times a year I read some commentary about how “they” should fix the newsstand system. And I still don’t know who “they” is.
Some people think that a few big publishers could get together and solve the system’s problems for everyone. I suspect it would yield “solutions” favoring the Big Boys over the indies – and an antitrust lawsuit.
Digital competition and the loss of once top-selling titles have shrunk the demand for magazines, disrupting economies of scale and leading to less display space for our industry’s products. I don’t see how a few people holding hands in a Kumbaya session are going to change any of that.
Q: Why is it called the newsstand system? Newsstands have disappeared from many towns and are scarce even in most big cities.
A: I recently suggested that it would be more accurately called the grocery/discount-store/bookstore system in recognition of where most of the copies are actually sold. But old habits die hard.
Related story: No, There’s Not a Glut of Magazine Titles at Newsstand