A Bleaker-than-Reported Newsstand Story
SIPs and one-shots are choking off sales of regular-frequency magazines, argues one analyst.

That rate of decline increased in the second half of last year, Davis said, adding that looking at data by the half, and not for a full 12-month period, is preferred because performance varies significantly from one six-month period to another.

Davis, in his analysis, broke out audited titles from non-audited ones (largely high-priced SIPs and so-called bookazines), and focused on the second half. According to Davis, audited publications declined significantly more than non-audited titles in that period, off dramatically by 16.6 percent in unit sales from the same period in the prior year, and by 15.2 percent in revenue. In real numbers, audited publications produced unit salesof 121.4 million and revenue of $537 million in the second half of 2016. 

By contrast, non-audited publications declined, but not nearly as much. There were unit sales of 55.1 million in the second half, a decline of 8.0 percent. Revenue produced by those sales was $471.5 million, a decline from the same period the prior year of 9.3 percent. It’s interesting to note that non-audited publications generated nearly the same amount of revenue on far fewer unit sales — the reason being that per-issue prices are much higher on non-audited titles, which tend to be one-shots and specials.

“For the last two years, the newsstand sales rate of decline has accelerated every six months,” says Davis says. It’s the convergence, according to Davis, of several simultaneous events:

• The cumulative impact of reduced demand for print products. The growing effect of publishers’ using non-revenue-generating circulation (verified, sponsored, partnership and others) to support circulation levels that are too high.  

• The growing effect of specials and bookazines (non-audited publications are largely high-priced “specials” of some sort). These products are subsuming display space (especially at checkout) to the detriment of regular frequency pubs.

• Adding to the newsstand woes, especially of audited regular-frequency magazines, Davis said, is that specials might be having a zero-sum sales effect on the sales of regular frequency titles. Consumers have limited funds for the discretionary purchase of magazines, so when they spend $9.99 for a special issue, there is less left for the purchase of regular frequency titles.

“And specials priced at, say, $9.99, are also given longer on-sale periods, and their economics makes it more palatable for wholesalers and retailers to accept reduced efficiency levels,” Davis adds. “Currently, everything is conspiring at the newsstand against regular-frequency publications.”