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Newsstand Drops 11 Percent in Q1 While Bookazines See Gains

High-quality and exclusive publications are driving sales for publishers.



TJ Raphael By TJ Raphael
05/23/2013

 

NEW ORLEANS—On the second day of the MPA’s 10th annual Independent Magazine Media Conference (IMAG), industry publishers got a peek at first-quarter numbers for the newsstand, which showed a mix of declines and gains.

In a mid-morning session Gil Brechtel, president and CEO of the Magazine Information Network, or MagNet, offered a picture of the current climate during his “Realities at Retail” session. On the whole, the newsstand continues to see significant drops, but he said that trends surrounding bookazines and special issues continue to fair well—proving that readers are still willing to buy print on the newsstand.

See Also—IMAG Day 1: MPA Rolls Out Pilot Program For Digital Measurement Standardization

“We just released our first quarter, 2013 numbers and the pain continues,” Brechtel said. “During the first quarter sales were down 11 percent in dollars and 14.5 percent in units sold. This is the largest quarterly sales decline we’ve ever seen when you compare period-to-period and year-over-year numbers.”

The top 50 titles and titles ranked lower than 1,000 in retail sales dollars represented about 97 percent of the sales losses—around $96 million. Titles ranked 51-1,000, however, collectively performed fairly well and represent over 50 percent of the magazine business.

The reasons for these sharp declines are as varied as the titles that appear on newsstands. For starters, Brechtel said that many major weekly titles had 12 issues in 2013 compared to 13 in 2012, and there were 975 fewer releases in the first quarter this year or about 6.3 percent less than in the first quarter of 2012. Competition from new media for content delivery and the way consumers’ leisure time is shaping up, coupled with a rough economy, falling wages and less disposable income have all had an impact.

Additionally, retailers are cutting back on space for magazines because of sales declines, and wholesalers are exploring other opportunities to leverage logistics and merchandising expertise to increase sales through products other than magazines.

“Sorry to be the bearer of such information, but these are the ‘realities of retail,’” he said.

Yet, one interesting point raised by Brechtel was the price of subscriptions. He said that Cosmopolitan saw newsstand sales drop by as much as 18 percent in 2012, while at the same time an annual subscription was about $5.00.

“Is there a correlation here? I think so,” said Brechtel, implying that readers are turning to subscriptions due to the lower price points instead of buying it on the newsstand. “With fewer advertising pages and current cover prices, consumers feel too many titles aren’t worth the money.”

Bookazines & Special Issues Gaining Ground and Revenue

The newsstand sales environment has publishers focusing more on digital initiatives and less on new print products. But Brechtel said that the market shows that readers are still willing to purchase in print—if it’s worth their while.

“High cover priced specials have prospered during the same five-year period (between 2008-2012),” he said. “So if print is dead why are so many consumers spending so much on high cover priced, newsstand-only products? One answer is there are no subscriptions. There is no reason for publishers to discount the price of that product at the newsstand, there’s little to no advertising and there’s no ratebase to meet. Consumers want high quality covers and paper stock with good pagination. This should make us feel good: Consumers will buy magazines at the checkout if it’s a high quality product.”

As the chart below shows, the bookazine market, which represents about 10 percent of total volume at newsstands, continues to see steady revenue increases.

“So the newsstand can certainly produce great sales and profitable products for publishers,” Brechtel said. “You can increase your newsstand sales and profitability, but you have to work at it.”

 

TJ Raphael By TJ Raphael
05/23/2013







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