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A Mexican Standoff at the Newsstand

Single-copy supply chain mess a short-sighted gamble on customer happiness.

Patrick Hainault By Patrick Hainault
04/13/2009 -09:07 AM

The moment I heard of the flare-up between newsstand distributors, wholesalers and publishers, whereby one party demanded higher fees or else, another stumped for status quo or else, and the other just made a lot of noise, I was reminded of Reservoir Dogs, the gory Tarantino crime caper famous for, among other scenes, its “Mexican standoff” ending.

That’s the classic spaghetti western situation in which each character has a gun pointed at another character’s head, forming a literal deadlock and ensuring that, should anyone pull the trigger, all die.

One characteristic of a Mexican standoff is that it can only emerge if all players are focused exclusively on each other with no thought spared for exogenous items such as law enforcement, the clock, passer-bys or, in the case of magazine sellers, customers.

To those in the standoff, such concerns are potentially lethal distractions.
And that’s why the Mexican standoff is such a potent allegory for self-centered oblivion, especially if you take into account that a major precondition to such a standoff is the participants’ inclination to ignore all but their own gun’s aim.

Washing Hands

Which leads me to wonder: How many industries have such a hold on their customers that they can ignore them and continue to thrive? We know how that went for the music industry, stand aghast at how it’s turning out for American banks and car makers, and have an inkling of how it might end for cable.

So with everyone in the single-copy supply chain focused on his or her own immediate interests, all are willing to gamble with the customers’ happiness, washing their hands of their role in the ultimate outcome. “Not my fault if people can’t get their hands on their favorite magazine. The other guy is showing tremendous bad faith.” This will be cold comfort should retailers choose to replace magazines with frozen yogurt or, worse yet, if readers begin to feel they can live with the alternatives to what they would have liked to purchase, but couldn’t find on the shelves.

The industry that can’t find a way to start serving new customers before “four to eight weeks” has thus outdone itself: Whether you’ll be served has devolved to “maybe, maybe not.”

Now that the conflagration is smoldering out, having claimed a major wholesaler in the process, it may be tempting to take a deep breath and pronounce the damage minimal, the whole episode an anomaly. Thanks to heroic efforts by some people in the field, a degree of normalcy was restored relatively quickly, and only a small fraction of customers were frustrated for only a short time.

But this won’t wash away the fact that key industry players were willing to take bets that impacted customers. Although minimum long-term damage may have been done this time (unless of course you are one of the 2,500 laid off Anderson News employees), the parties’ willingness to even take this kind of bet is distressing. If you know what’s good for you, you never bet on your lifeblood.

Admittedly, from the perspective of a publishing company with subscription-heavy titles, it’s easy to claim the high moral ground and advocate that customers must always come first. However, it’s also clear to me that it takes neither courage, nor creativity to reach for one’s gun whenever conflict arises.

With all that’s threatening the magazine publishing industry, couldn’t the players who hold the most influence show that they deserve it and display stewardship as opposed to machismo? Serious negotiating is never easy, but it can’t be done productively if the parties are only concerned with preserving their own piece of the pie and give no consideration to tactics that make everyone a winner—or at least prevent system-wide losses.

Now is Our Chance

In the past few years, several level-headed solutions have been proposed, including reevaluating how many titles should be offered at newsstands, rethinking how payment flows ought to be structured and investing in 21st century information technology. With the latest conflict having resolved nothing, wouldn’t now be the time to launch a pilot program or two?

Everybody knows that the channel’s current equilibrium is unsustainable and that reverting to status quo can only lead to a recurrence of flare-ups like the one we just experienced; this is tantamount to saying we are comfortable continuing on a course that’s detrimental to our customers.

In most movies, likely out of distaste for unhappy endings, directors typically find creative ways to resolve Mexican standoffs. In Reservoir Dogs, Tarantino chose to let events run their course. Let’s just say that there will never be a “Reservoir Dogs II”—at least not with the same cast.

Patrick Hainault By Patrick Hainault -- Patrick Hainault is consumer marketing director at Mansueto Ventures, publisher of Inc. and Fast Company.

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