How the Industry Can Fix a Broken Newsstand Supply Chain
A Q&A with John Harrington, editor of The New Single Copy.
John Harrington has had his eye on the magazine distribution channel since the mid-1970s, first as editor of an association newsletter, then as the voice behind The New Single Copy. He’s seen the industry go from a competitive, thriving enterprise to a business run by a few major players that are swimming upstream against hard economic realities.
Harrington sent out the final issue of The New Single Copy this week after a 19-year run, though he’ll continue to write about the business on his website.
Folio: caught up with Harrington to get his perspective on where the newsstand is right now and what can be done to fix the supply chain behind it.
Folio: Most people will agree that the newsstand supply chain is broken, but a lot of people are quick to put all the blame on the product, print magazines—you see a much deeper problem though. How much of the issue is with the product and how much is it the fault of the legacy system in place?
John Harrington: Clearly, newsstand and retail isn’t going to sell at the kind of levels it did even five or six years ago, but the success in that period was because of a boom in the celebrity category. And now, that category is probably the most impacted by the rise of technology and social media. But with the success of book-a-zines, it’s clear that that same information can be packaged in different ways that can still sell a lot of units. Few magazines have altered their editorial strategy to take advantage of that.
The mechanics of the distribution channel are definitely broken, as well, but there’s an opportunity since there are only two traditional wholesalers [Hudson News and TNG] and one large direct distributor [Ingram Content Group], and all of them are financially secure with big backing companies or private backers.
The financial models of wholesalers and publishers still don’t line up though. Publishers can still afford a certain level of inefficiency there because of their advertising base, while wholesalers are paid only for the copies that sell and are having to handle more and more copies to sell fewer. It’s incompatible.
Folio: What can be done to align those objectives?
Harrington: I can’t tell you exactly what would be the best way to do that, but there has to be a way to compensate the wholesaler for doing something at the publisher’s request that they otherwise wouldn’t be compensated for under the current system. There has been talk of paying fees for distribution alone, but it’s hard to change the whole system.
Currently though, when there are relatively few players involved, they should be able to sit down and work through some of those things.
It’s a smaller part of the business now, but all major publishers will tell you they can’t do without the newsstand, especially for launches. If you look at the few successful launches recently, they started with large distribution and success of sale at retail. It’s the only place people can sample new magazines.
Folio: You’ve mentioned that the industry is still in restoration mode, trying to absorb the fallout from the Source Interlink Distribution shutdown. Why is it taking so long to get back to normal?
Harrington: Different than the collapse of Anderson News five years before, the good portions of the business Source had were in markets that other wholesalers weren’t in at all. They had to create new distribution channels to those marketplaces—buy warehouses, trucks, hire workers, it’s not easy.
For a while they were subcontracting the work out, but it’s something that’s never worked well in this business when you’re trying to coordinate deliveries with service merchandisers.
I think they’re close, but it’s just been a much larger task than anybody anticipated.
Folio: What’s the role of print moving forward?
Harrington: Print magazines have to focus on what they can do better than digital or mobile formats. It’s producing quality journalism.
Retailers are still receptive to the product though. Even with the chaos over the last year, they haven’t reduced space. They find it attractive in their stores, its profitable and it’s a low-maintenance product. If publishers can straighten out the other side of it, they’ve got a welcome mat out there.