All Eyes on Wholesalers at DMA Circ Day
Anderson, Source debacle overshadows 23rd annual event.
NEW YORK—DMA’s 23rd annual Circulation Day, which took place here Tuesday, opened with a rather bizarre scene: keynote speaker Johnny Mcintosh,
president of Southern Living at Home, skipped into the Marriott
Marquis ballroom to Rihanna’s “Umbrella"—with a scantily clad
woman holding an umbrella in tow.
In between, attendees were presented with various
tactics and techniques needed to navigate through these tough and
tightly budgeted times.
During his keynote
presentation, entitled “When it Rains, it Pours—Your Magazine Brand as an
Umbrella,” Mcintosh outlined the brands under Time’s Southern Progress
Corporation, Southern Living, Southern Living at Home and Southern
Living Book Division, and told attendees “we are brand marketers—much
more than just a magazine.”
Despite the fact that Cottage Living was shuttered this past
November as part of Time Inc.’s broad restructuring, Mcintosh
explained that for the Southern Progress brand, “it’s not always about making money, but about opening up the brand for
A key to Southern Progress’ portfolio, Mcintosh said, is its
divergence from magazines into national “book parties,” where Southern
Living fans (particularly females, late 30s, with annual
income of $80,000 or more) sell magazines and books for a profit. He said that Southern
Living at Home throws approximately 150-200 parties per year. “We were
book sluts,” he said. Despite its success, Mcintosh said that Time Inc.
would likely divest itself of the party business. “It’s a bit of a
round peg in a square hole.”
Small Publishers in ‘Survival Mode’
For Metrocorp, publisher of Boston and Philadelphia magazines, the
small publisher story sounds like so many others—the company was
looking great coming into September 2008, and then “the world fell out
in October,” said Marianne Kerr, consumer marketing director. Metrocorp constructed budgets, assuming revenue would be 50 percent
less in 2009, by closing down its New York City office and relying on
less expensive sources and very little verified circ. “Our budgets are 25 percent
verified,” Kerr said. “We are definitely in survival mode.”
Something that works well for NewBay Media, said VP, group director
Denise Robbins, is that they are part of a cooperative group of music
publications where competitors have formed a coalition to get small
retailers to buy into idea of selling their magazines. “If you have
small circulation and are specialized, it’s harder to negotiate with
larger distributors,” Robbins said.
The lack of cash flow and adequate staff is also a large concern for
small publishers. “Metrocorp has always had a good cash flow,” Kerr
said. “We have reduced our rate base and gotten rid of our direct mail,
so our primary source of income now is events and advertising. Getting
credit is hard for us. But cash flow is always critical. The lack of it
can put you out of business.”
Robbins also suggested being careful about that cuts you do make.
“The most important thing to do is to make sure you have the best
circulation quality possible,” she said. “Because when you start to cut
sponsored subs, for example, your response rates can drop and as well
as your list rental quality.”
‘Magazines are All on the Long Tail of the Web’
keynote speaker Eileen Naughton, director, media platforms, Google,
gave attendees a snapshot of the “new directions in direct marketing”
that could make magazine Web sites more visible to Internet users.
According to statistics provided by Naughton, magazine Web sites
remain “in the tail” of the "Long Tail" when looking at what sites consumers
visit the most. The best way to change that, she said, is to not hold content
captive and make it searchable. “Search is a core behavior,” she said.
“It’s accountable, you only pay for what consumers click through, and
just like direct mail, you can refine and change it to make things
Naughton urged attendees not to make consumers “hunt and peck” for
information once they find Web sites through
search and to make features like subscribe buttons easy to locate.
“Your landing page is quite important because it will drive your
conversion rates,” she said.
‘This is What We Know Right Now’
In an effort to stay as timely as possible, moderator and panelists
of a final session, “Sustaining Your Newsstand Sales,” opted to scrap
their previously scheduled agenda to talk about the reported ceasing of Source
Interlink and Anderson News’ wholesale operations. Moderator Marcia
Orovitz, director of retail sales for Active Interest Media, explained
what she and newsstand expert panelists collectively knew “right now,”
barring changes over the next couple of days. (Due to the immediacy of
the situation, panelist Dale Oehler of Time Warner Retail was unable to
sit on the panel as scheduled.)
In an educated hypothesis, Will Michalopoulos, senior director of
retail newsstand marketing,Hachette Filipacchi Media, said that he
expects Hudson News, Newsgroup and about 30 independent distributors to
pick up where Anderson and Source have dropped off. “About 60 percent
of Anderson’s footprint can be handled by Newsgroup. However, I do
think this will lead to a big disruption in the L.A. market.”
get to a point in the future, said an attendee, where wholesaler distribution will break down into two major monopolies “who will be able to charge
whatever they want.”
Mary McEvoy, president
of McEvoy Associates, thinks that distribution will go down two paths,
supermarket and bookstore. “The path is going to become more divergent,
with the supermarket cost of entry being higher,” she said.