The Newsstand Impact of Source Interlink’s Shutdown
Sales down 20 percent in Q3.
Magazine distributors have picked up the pieces of Source Interlink Distribution’s shut down which cut off service to nearly a third of U.S. retailers in May.
Service is almost all the way back, according to MagNet’s third-quarter report on newsstand sales, the first since Source Interlink closed its doors. While 30 percent of U.S. retailers were left without magazine deliveries in the immediate aftermath of the closure, that number shrunk to just 11 percent in July. By September, 98 percent of service had been restored.
"There are still, in a few cases, logistical problems that some wholesalers are experiencing, as they work to develop infrastructure and improve deliveries to areas far removed from their distribution facilities," the report suggests. "We also note through our analyses that, in some cases, title quantities going to different wholesalers could be improved. However, the industry should be commended for getting so many retailer accounts back in service as quickly as it did."
While things are almost back to normal now, damage did occur. MagNet estimates total U.S. unit sales dropped 26 percent, with dollar amounts falling 20 percent in Q3. For comparison, typical full year losses for both units and dollars have been less than 10 percent since 2011.
There’s reason for optimism though. Uninterrupted sales in the third quarter—sales at stores not impacted by the Source Interlink bankruptcy—were down 10 percent in units and just 2 percent in revenue, according to the study. The latter stands as the best performance in six years.
And things were even better in the second half of the quarter. Units were down 6.5 percent, with revenue actually up slightly over the same period in 2013.
The uptick in dollar amounts is a strong indicator that the price increase on many weekly celebrity titles last spring was warranted, MagNet adds.