Mr. Magazine

Is it payback time or is it a thank you for all the “free advertisements” Us Weekly has been running for weeks for Bauer’s Life & Style Weekly and In Touch Weekly? For sometime now, Us Weekly has been running a spread in every issue trying to tell readers about all the wrongs in the coverage of the stars in Bauer’s two celebrity weeklies. Well, this week, as fate may have it, both Us Weekly and Life & Style Weekly have a similar main cover story with almost the same headline: HELP. I do not know whether or not the editors at Life & Style Weekly added US to their help intentionally or not. In any case, it seems like a nice payback to me from the folks at Bauer for all that free advertisements Us Weekly has been running for the Bauer’s magazines.

This is week three after my blog on the future of wholesalers and magazine distribution in general was published. The reactions and comments did not stop yet and the complete lack of interest in trying to find a real solution for a major problem in our industry still amazes me. The publishers are only willing to talk “off the record” and in e-mails “not for publications.” The wholesalers are in a defend mode, big times; those who were “stunned” by my blog did not expect those opinions from me, and those who questioned my knowledge “with all due respect” such as the president of a wholesaler company who wrote Bob Sacks on www.bosacks.com stating,

“I am a wholesaler and through my family has been since 1917. I take huge exception to the comments on our learned title counter Dr Husni. With all due respect what does he know of wholesale economics. I am sure that since 1995 every publisher worth his salt has looked at better ways to get to market. The long and the short of it is that the current method is the best.”

(On a side note, I love the fact that I am referred to as the “learned title counter.” All my research and studies have been boiled down to title counting…)

The other two major silent watchers in this major debate that sooner or later will affect the entire magazine business (especially when wholesalers start owning magazines as in the case of the Source Interlink, one of the four major wholesalers in the country now), are the National Distributors (whose future role is being highly questioned by both magazine publishers and wholesalers) and the magazine industry leading associations who do not seem to see the impact of the major changes taking place in the single copy sales today.

As for the reactions to my comments, John Harrington, published the following in this week’s edition of The New Single Copy.

“For the last few weeks, the issue of magazine retail pricing has been a subject of The New Single Copy. Last week, University of Mississippi journalism professor Samir Husni was quoted as saying, “They [magazine wholesalers] need to force other publishers to lower the single copy prices of other magazines to be equal or close to that of [their] subscription prices.” That inspired the following response from Brian O’Leary, a principal of Magellan Media Consulting Partners: “I say this pointedly, Husni’s argument that wholesalers should pressure publishers to price newsstand copies at subscription rates is both naïve and economically disastrous. It’s naive because publishers have shown very little willingness to use anything other than the ‘publisher next door’ as a benchmark for price. Whether or not the source could be helpful, wholesalers are the last place publishers would go for advice on pricing. “It’s economically disastrous because subs already lose money at prevailing prices. Capell’s survey data in [The New Single Copy, 7/30/07] tells the tale: on average, direct-mail subs lose $10.28 an order. This reflects both the poor economics of obtaining new subs from this source as well as the miserably low per-copy prices most publishers charge to gain a subscription. There is virtually no way that monthly subscriptions sold for $1 a copy can make money for a publisher in any way other than advertising. Pushing single-copy prices to that price isn’t going to help, even at an unobtainable 100% sell-through. At $1 a copy, the expenses associated with printing, distribution, marketing and selling these copies eat all of the margin, and more.”

With all due respect to Mr. O’Leary, I know at $1 a copy the magazine publisher cannot make any money, thus when I argue that magazines should reduce their newsstand prices to that of subscriptions, it does not mean to sell it at $1 a copy. But rather if you are willing to charge $2.95 for the single copy price, then charge $2.50 for the subscription price per issue. No 90% discount from the cover price, but 20% at most. Mr. O’Leary is right, publishers lose money selling subscriptions at $1, $.50 and .$35 a copy. Yet, if you look at magazines like People and The Economist, I doubt that they are losing money selling subscriptions at almost $2.00 a copy (and that’s much more than my 20% discount from the single copy price I am advocating).

In short, I feel that if wholesalers have the right to tell the low priced magazines that they are not going to distribute them anymore unless they change their prices to over $2.49, they should practice that same right by telling publishers who sell their subscription copies for $.50 and their newsstand copies for $4.95 that they are not going to distribute their magazines too. In addition, what about the publishers who use the newsstands to showcase (mainly for advertisers’ sake) their 5% or less from their total circulation on the newsstands, while spending all their efforts on the 95% subscription copies. I know that we need to stop the single copy magazine sales abuse, but I also continue to believe that the approach the wholesalers are taking now is still not the right one.

I am sure there will more to come on this subject matter and I, once again, encourage you to comment on line, in public and without starting your e-mail with “Samir, you are right, but this respond is not for publication.” Please get engaged in the conversation. Hit that comment link below and let me know what you think?

… and the question whether it should be rebuild or not is limited only to the newsstands in a specific region of the country? I know magazines are using split covers more often these days because the technology make it possible to do that at a very cheap price. The question that I have is should we do something just because it is doable? More than one subscriber told me today that they were surprised to the see the August issue of National Geographic on the newsstands with the New Orleans cover. Their initial thought was that they missed that issue until they reached out and flipped the pages to find it is the same issue they have at home with the Maya story on the cover. Research shows us that people see and remember color first, pictures second and type third. Well, a change in the cover picture and in the type are two strikes against people’s memory and recognition and thus two strikes against National Geographic. If editors feel that a story and an image are worthy of being on the cover of the magazine, it better be on the entire magazine run. Unless the decision to send the almost 5 million subscribers the Maya cover (which is also the cover on the National Geographic website) and thousands of newsstand readers the New Orleans cover is not an editorial decision. My question is “Who is in charge?”

The folks at Texterity, Inc. have prepared a video demo of their new iPhone magazines. In the demo they use a copy of Popular Science magazine delivered and viewed via the iPhone. Here is the link for you to judge for yourself whether this new method of delivery of a printed product is worthy of your fingers touching the screen. I would love to hear your feed back.

Although the editors of Vapors magazine want you to steal their magazine, I promise I did not do it. I paid my $4.95 for the magazine regardless of what they told me to do. This issue of Vapors with its “Street Couture” tag line comes with three covers, but I opted for this one because it reminded me with the famous National Lampoon cover with the gun pointed at the head of the dog and a cover line that read “Buy this magazine or we will shoot this dog.” That issue sold out on the newsstands. If this issue of Vapors sells out on the newsstands, it may or may not be because it sold out, but rather because people listened to the advice of the editors and just stole the magazine. A clever cover idea with a lot of risk!

The responses to my blog on the wholesalers (click here to read) have been overwhelming to say the least. From the comments on the blog site, to the “off the record” and “phone calls” responds and to the comments in the publications of two of my colleagues in this business Bob Sacks and John Harrington. The underlying theme is there is a major need to talk about the problem and to address it in a completely different way as it is been addressed today. First I will share with you what John wrote and what Bob’s readers commented and then I will ask you to respond on the record.

John in this week’s issue of The New Single Copy commented on the Mediaweek article and on mine. Regarding my blog he wrote

“A more impassioned approach appeared on the website of Samir Husni, the University of Mississippi journalism professor, best known for his work on new titles. The title of his article, “Wholesalers are not dying…they are committing suicide,” gives a hint about his position. Husni references some of the information previously reported in The New Single Copy, including a letter from Kable Media Services president Mike Duloc. Among his recommendations is “If wholesalers do not want to commit suicide they need to force other publishers to lower the single copy prices of other magazines to be equal or close to that of [their] subscription prices.” By the end of the week, seven responses, five from wholesalers and two from publishers, were posted on Husni’s website, which is http://www.mrmagazine.wordpress.com. For the record, the Harrington Associates study, The Impact of Low Cover Price Magazines, was based on wholesaler cost data supplied by members of Magazine Information Network (MagNet). It was reported on originally in the 12/11/06 issue of The New Single Copy. It is available in electronic format on request to info@nscopy.com.

As for the Bosacks electronic newsletter he published the following responses last night:
BoSacks Readers Speak Out: On Wholesalers…

Re: Wholesalers are not Dying . . . they are Committing Suicide
It is about time that someone finally put in print what some people have been saying for a long time. Thank You!!!!
It is time that the w/s community realize that they are a delivery service for the magazine industry and that they do a semi good job at that, however when they start analyzing the delivery system this is where they are failing.
Good for you Bo keep up the great job and maybe someone at the w/s level will start listening and doing what you are suggesting.
(Submitted by a Senior Wholesaler)

Re: Wholesalers are not Dying . . . they are Committing Suicide
This is by far the GREATEST article I have read over the past 12 years describing the utter futility of the newsstand single copy industry. The nail was hit directly on the head. Unfortunately the people who should be reading this, will probably dismiss it as pure fluff. What a shame, they still have there heads up their be-hinds.
(Submitted by a new and Unknown Reader)

Re: Wholesalers are not Dying . . . they are Committing Suicide
One of these days Wal-Mart is going to get their way and the publishers will deal with them direct and cut out these folks. Last time I heard, “Wally-World”, as we call them here, account for over 25% of newsstand sales, why not deal direct? Save a bunch of money regarding distribution costs and probably knock off 33% of the cover price to the customer, what a concept.
(Submitted by a Paper Person)

Re: Wholesalers are not Dying . . . they are Committing Suicide
Bo, thanks for the best, most interesting news delivery system in our business. I never know what you will send out each day, but it is always of interest to me and my career. You have improved my ability to understand this industry ten-fold.
As to the newsstand situation it is part and parcel of the bigger picture of an old and formerly honorable business gone to the dogs. Everyone scrambling to endue another year or two, as the industry changes and the management at best treads water..
(Submitted by an Unknown Reader)

I welcome all responses on this important matter and I invite you to post all your comments “on the record.” I understand the reason some of you only respond “off the record,” but we cannot continue to hide our head in the sand and hope for the problems to go away. We are heading toward what can be the most difficult time in single copy sales in this country, and I do not believe we can solve our problems off the record. The time is now to speak out, not for the sake of any one publisher or wholesaler or retailer, but for the sake of the entire magazine industry. I hope you will consider this as a plea to get involved.

The July issue of the British Esquire magazine brought back memories of the first issue of Radar published earlier this year. The only difference between the two smoking figures is that one is a boy and the other is a girl. One is on the beach and the other is on the bed. The two poses are so close that you will think the same photographer took the two pictures, or (which is more likely) a photographer who really liked Radar’s cover idea decided to try it across the pond. It is just another day in magazine publishing where imitation is the best form of flattery. Enjoy.

To love your life, you have to be honest with your life first. Stacy Morrison, Editor-in-Chief of Redbook magazine, did a great job reinventing the magazine last month, but failed to get rid of the hypocrisy (oh, sorry it is a marketing ploy) that she inherited regarding exchanging the words “love” and “sex” when used on the cover of the magazine for subscribers and single copy editions. The August issue goes even one step further by attributing a tip to their cover star Kelly Ripa in which the subscribers receive “the love tip she just has to share” and the single copy buyers receive “the sex tip she just has to share.” Ms. Morrison, I know you are in charge, so please stop the hypocrisy and give your readers some credit. If you think they are not going to buy the magazine because you do not use the word sex on the cover instead of love, trust me you do not want those readers. Love your life is your new tag line and not Sex your life. Or, is it Sex your life?
On a separate note, did you know that Redbook is also selling in some parts of the country at the low price of $1.99? (See related story below) Here is my copy bought at Books-a-Million.

I just came back from my usual weekly magazine purchasing tour in Memphis, TN. I bought 105 magazines and spend over $500.00. The price of the magazines ranged from $1.59 to $19.95. Some were $1.99, some were $2.99 and some were $5.99. Different prices for different magazines. The average cover price for a new magazine last year was over $6.50. Why the lengthy introduction? Very simple. The media lately has been filled with news that magazine wholesalers are pushing publishers of low priced magazines to cut draw and raise the price of their magazines. Some say that wholesalers cannot make any money on any magazine priced less than $2.50. In fact this week Mediaweek carried an article (read it here) by Lucia Moses titled
“Wholesalers Pressure Magazine Publishers to Up Cover Prices, Cut Draw.” John Harrington’s The New Single Copy editor repeated the findings of a study sponsored by Magazine Information Network. The study “reported that it was not possible for wholesalers to earn a profit on publications, no matter what the sale or retail sell-through percentage, on publications with prices of $2.50 or under.” The study drew a sharp response from Michael Duloc President and CEO of Kable Distribution Services, a national distribution company. His response to the MagNet study (and John Harrington), published in The New Single Copy this week states, “Relating to your (John’s) recent comments on this subject, your viewpoint, in our estimation, continues to be very slanted. It would appear that the major wholesalers (or perhaps another weekly celebrity publisher) are contributing beyond normal subscription rates to keep the issue of lower cover price, yet highly efficient titles on the radar screen. The question is, where would wholesalers be without this additional $450 million in annual retail sales? From your writings, one would quickly assume better off. I’d like to see audited numbers, versus the fuzzy number which have been used to substantiate this claim.”
It is amazing that the only publisher who revived single handedly the single copy sales, and I mean Bauer Publications, is now forced to kill what would have been their fourth weekly because of the “single copy market climate.” In the good old days, and in most of the world, magazines that sell are rewarded with better placement and good publicity. The wholesalers in their recent attempt to force Bauer to increase the cover prices of their magazines, and those of the rest of the publishers of low cover priced magazines, is gasping for their last breath of air. Those low priced magazines are needed to bring the traffic to the newsstands and to maintain the unit sales of their “bread and butter.” What type of logic is this that bites the hand that feeds you? It does not take a researcher or a Ph.D. (although I claim to be one and do have a Ph.D.) to see the flow in the wholesalers logic. They are digging their own grave and they are digging it deep. When you hear people say that the wholesalers are in trouble, check and see if the trouble is from their own making. Wholesalers are not dying in this country, they are committing suicide. They have buried their head so deep in the sand that they can’t differentiate between friend and foe.
As a matter of fact, do you know that four of the top ten revenue-generating magazines on the newsstands are Bauer magazines and are all priced under $2.00. If they, as publishers, can survive and make money from this single-copy driven model of publishing (unlike many other advertising driven publishing models), I cannot see or understand how the wholesalers cannot make any money unless the price is over $2.50. Wholesalers deliver magazines as a whole (in boxes) and not by single units and titles, and the average cover price of all magazines distributed (old and new) is almost $4.95. The magazine distribution channel is indeed broken, but the low-priced magazines that they are selling are not the cause of the problem. In fact if wholesalers do not want to commit suicide they need to force other publishers to lower the single copy prices of other magazines to be equal or close to that of the subscription prices. I cannot believe that they see fault with a magazine that sells at $1.99 and has almost a similar price for subscription, but they do not see fault with a magazine that sells for $5.95 on the newsstand but sells for less than 50 cents by subscription. It is a world gone mad. By the way, none of the covers shown above are from Bauer. I just wanted to show the proliferation of the low-priced magazines besides Bauer. They include respectively Meredith, HFM, Time Inc., Penny Press and Hearst. If those publishers did not see the wisdom of the low-priced single copy sales in reviving the single copy marketplace, a practice that Bauer has adopted since its inception as a company in this country in 1981, I do not know why they are doing it then! I am not going to second guess Bauer and their decision of not publishing Cocktail Weekly, but I am going to continue to give them credit for saving America’s newsstands, and the wholesalers, from a sure death. They maybe the only company that can help bring the wholesalers from the brink of death. Time for the wholesalers to hit the brakes and rethink their collective stand against the low-priced magazines. Rethink now!