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News

A Retailer Asks Publishers What They Will do About Newsstand Challenges

The following is an email The New Single Copy received from Rebecca Clark, senior category manager, WalMart Canada.

I've just finished reading the 1/20/14 issue of The New Single Copy, in particular the article entitled "Facing up to the Difficult Challenges of the Newsstand." The article outlines two particular challenges: 

 1) the frail distribution channel, and

2) restoring acceptable levels of magazine consumption at retail.

I will add some candid input in response, as a retailer, on the "consumption at retail"  Much like the articles' statement "The New Single Copy is convinced that changing shopper retail attitudes toward magazines needs a broad industry initiative,"

I too share this point of view.  In my five-plus years in the magazine industry,  I have never witnessed an industry-led newsstand promotion of any kind.  However, in the past four to six weeks I have witnessed a substantial industry-led public  relations/media campaign on television and in print (in the pages of top-selling magazines), aimed at promotion of the Next Issue program, which grants digital access to more than 100 of the top-selling magazines.  One particular Next Issue TV ad takes aim at print as a nuisance, literally showing a newsstand display being dragged and then falling over - like it's a negative bygone experience of engagement with a print magazine.  While I perused my favorite magazines and television shows this weekend, I lost count of how many times I was personally impacted by the Next Issue ads.  As the Senior Category Manager of a leading Canadian newsstand retailer, in the void of any industry-led initiative to drive sales at newsstand, the Next Issue campaign is offensive.

Magazines, aside from their unique homegrown content, thrive on the paid advertising of consumer products/brands, which are predominantly sold at retail.  And yet magazine publishers do not place paid advertising in other consumer media to drive their newsstand sales.  As a retailer, I absolutely believe that consumer advertising works - it gets those advertised products onto customers shopping lists - and thereby drives the movement of those advertised products off of retailers' shelves.  I would highly encourage magazine publishers to engage in a consumer public relations/media campaign in 2014, to create demand for the print titles available to purchase at  newsstand.

Hopefully this perspective may encourage the industry to creatively think about ways in which they can revive and create consumer demand for their titles at newsstand.

 If nothing else, the publishing industry will consider the inclusion and engagement of newsstand retailers to participate with an active voice or role, simply beyond display space.

Comment: Ms. Clark spoke last fall at the Distripress Congress in Toronto and raised this same issue, then calling attention to "The Power of Print" promotion that placed ads in magazines urging them to buy more magazines, and asked the question, "Why  are you advertising to the customers you already have?"  She clearly is interested in magazines and selling more of them, but is frustrated by what she sees as a lack of support from her publisher partners.

Frankly, expecting magazine publishers to take on an industry-wide consumer promotion program, even if channel members lent some support, is probably unrealistic.  Moving shopper behavior is a prohibitively costly endeavor, and one, the conventional wisdom holds, that does not have residual strength.  However, Ms. Clark's reference to the Next Issue* ads poses a slightly different question.

Why does publisher support of Next Issue and so many other subscription-type promotions have to cast newsstand as a villain?

Does anyone in the publishing universe think that the constant cacophony of subscription offers at rapidly escalating discounts - discounts disparagingly calling attention to the publishers' own cover prices - do not have a damaging impact on newsstand  sales?  Of course not!  One sophisticated newsstand executive recently told me his data can practically identify a lost newsstand copy sold for every new subscription his publisher has just added

Toilers in the magazine newsstand channel have always lived with the reality that publishers promoted subscriptions, using their own cover prices as a contrast to  steep discounts.  No one ever liked it, but blow-in and insert cards, stamp sheets, and occasional television spots were reluctantly accepted as a fact of the business.

However, now the whole dynamic has changed.  Not only does Next Issue portray the newsstand, once an icon of the American scene, as a relic of the past, in need of demolition, but subscription marketing is now ubiquitous.  It is a staple of the  internet, a central focus of e-retailing, and generally inescapable for any moderately sentient human being.  However, even more distressing is the bargain basement tone of the offerings, and they are not just coming from a few outliers, but often from titles that were till only recently bulwarks of the newsstand.  A year's worth of some of newsstand's leading monthlies can be had for sometimes less than the price of a single issue bought on the oft-ridiculed retail shelves of America's leading supermarkets, drugstores, bookstores, and terminals.

Only a little more than three years ago, many leading publishers proclaimed they  were moving from a "advertising-centric" business model to a "consumer-centric"

one.  Simply stated, it meant that, since ad pages were falling, they intended to make consumers pay a fair price for content.  The hopeful saw that as an reduction in subscription discounts.  Today, the reality is that subscription marketing is  even more aggressive than ever.  Based on available data, Harrington Associates  estimates that the average price of a subscription is nearly the same today as it was in 2007, while retail cover prices are about 30% higher.  And as far as the retreat from the "ad-centric" model is concerned, we estimate that advertising revenues as a share of revenues generated has actually increased.  This little snapshot does not even take into consideration the rise of so-called "verified" circulation, for lack of a better word, free subscriptions.

In fairness, publishers have essentially retreated even deeper into aggressive subscription marketing because of a truly catastrophic retail marketplace, and the catastrophe  extends beyond magazines.  The Great Recession, combined with warp speed digital technology developments, have wrought havoc on bricks and mortar retailing of every kind.  The economy has been demonstrably recovering, albeit at a modest pace, for several years.  However, consumer shopping patterns have been, perhaps permanently, altered by what The New Single Copy has referred to as the recession hangover. 

It is widely recognized that store customers have continued to stick to their shopping lists and resisted indulging in impulse buys.  Few commodities have not felt this broad consumer shift.

Yet, across the board, retail traffic has also suffered from the pace of digital  innovations.  Practically everyone participates in some manner in e-retailing and, consequently spends less time in stores.  During the recent holiday season, manufacturers generally reported good sales, but most retailers were down some, at least in their physical stores.

However, have no doubt that magazine retail sales were impacted far more by other aspects of the digital revolution than most other commodities.  All media is in a transformative era, where the expansion of digital platforms is restructuring how the public receives information and entertainment.  Magazine publishers now call themselves "magazine media," because, while they recognize that print is the heart of the value of their brand, they must repackage it in infinite ways to compete with media formats that did not exist only yesterday.

Getting back to Rebecca Clark, with all the unprecedented challenges that magazine media faces today, they should also be doing something substantial to promote the old time platform where most of them started out, the iconic retail newsstand. 

Particularly, they might consider how their subscription marketing tactics not only denigrate that venue, but also damage the public's value perception of their magazines.

 

Source: www.nscopy.com