Newsstand Sales Show Dramatic Change in Product Mix
By Baird Davis Circulation Management
Newsstand sales of audited publications (both ABC and BPA) were surprisingly stable in the second half of 2006;unit sales were up 0.7 percent and retail revenue only declined 0.2 percent. But the relatively stable sales masked the continuing story of the dramatic newsstand product change that's being precipated by celebrity-oriented titles. OK Weekly, the new entry in the celebrity sweepstakes, made its audited debut in the second half of last year. Its coming out party was a little more glamorous than many expected. This publication reported average per issue sales for the period of 513,000.
OK Weekly's retail revenue vaulted it into tenth place among all audited publications, and their unit sales of over 13 million ranks them eighth among all publications ahead of Globe and Cosmopolitan. OK's inaugural effort does not appear to have slowed down the celebrity title freight train. Among the five other major weekly celebrity-oriented publications (People, Us Weekly, Star, In Touch, Life & Style), only Star reported a sales decline (revenue down 14 percent). In the aggregate, these five titles reported an increase of 3.3 percent in unit sales and a 1.5 percent lift in retail revenue.
When OK's sales are added to this group, the unit sales in category jump to 150 million for the period and their retail revenue to $428 million. To put this in perspective, these six celebrity titles now account for 31 percent (nearly one third) of the newsstand unit sales and 26 percent of retail revenue of all audited publications. In the face of the continuing dominance of celebrity titles, you might ask how the other audited titles fared on the newsstand in the second half of 2006. Well, it's the same old story.
The sales performance of all other publications reflects a continuing downward trend;unit sales were off 4.2 percent and revenue fell 2.9 percent. The celebrity title onslaught seems to be making it difficult for the other audited titles to gain sales traction and is significantly altering the mix of titles sold on the newsstand. A review of the sales of the top 30 (as of second half of '05) audited titles sold at checkout helps further reveal the cannibalizing effect of the celebrity publications.
Nineteen of those 30 titles experienced retail revenue declines;seven of those titles reported revenue falls of 9.9 percent or more: Marie Claire (-26.1), Star (-14.0), TV Guide (-13.5), Reader's Digest (-12.6), Woman's Day (-10.3), O, The Oprah Magazine (-9.9) and Newsweek (-9.9).
On the plus side, only two of the 11 titles registering revenue gains had increases of more than 3 percent: In Touch (+7.1) and Life & Style (+24.6). Overall, the top 30 checkout titles reported a revenue decline of 1.4 percent. The majority of the top ten newsstand sales companies also experienced newsstand sales hardships of varying degrees. Overall, the performance of these ten companies (they represent nearly 75 percent of all audited newsstand sales) was slightly worse than the industry average;unit and retail revenue down 1.6 percent. On the positive side
Bauer: Sales revenue was up 5 percent, helped by sales increases from In Touch and Life & Style.
Wenner: Sales revenue increased 2 percent;exclusively a result of Us Weekly's 2 percent sales increase.
Rodale: This was the only top-ten company, without a celebrity title, to report sales increases. Their sales revenue was up a robust 26 percent, based on strong sales across their entire product line and the sales strength of Woman's Health, a publication initially audited in the first half of 2006. On the down side
Time, Inc: Sales revenue declined, but only about 1 percent. The decline can be attributed to relatively small sales downturns from In Style, Time and Sports Illustrated. However, its estimated sales of over $250 million was enough to keep them safely perched atop the newsstand sales leader board.
American Media: Sales revenue declined 5 percent. Their sales were hurt primarily by the 14 percent sales decline of Star.
Hearst: Sales revenue dropped over 5 percent. They were adversely affected by the poor sales performance of O the Oprah Magazine and the precipitous sales decline of Marie Claire.
Condï¿½ Nast: Sales fell over 2 percent. The major reduction culprit was Glamour, whose sales revenue fell 7 percent.
Meredith: Sales revenue dramatically fell by 15 percent. The decline was primarily a result of the reduced sales of their BH&G Special publications.
Hachette: Sales revenue dropped by over 8 percent. The decline can be chiefly attributed to the continuing sales slide of Woman's Day, whose sales fell over 10 percent. The sales of Primedia, the other top-ten company, were flat. This includes the 16 audited outdoor publications sold to Intermedia Partners in December. Buyer affinity for low cost weekly celebrity titles is changing the newsstand product mix dynamics and seemingly making it more difficult for other types of publications to prosper on the newsstand.
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