What The Newsstand Numbers Are Saying
Publishers should reassess distribution and pricing strategies.
Although it’s easy to fall back on saying “social media is to blame,” publishers also need to reassess their releases—how often to distribute and how much are they going to charge according to MagNet’s 2015 Q1 Newsstand Sales Results. Magazine unit and dollar sales improved slightly in the first quarter to declines of 14.2 percent and 8.3 percent, respectively, compared to drops of 15.6 percent and 9 percent in the prior quarter.
Although there will likely be no major turnaround in the foreseeable future, MagNet notes that decisions being made by publishers to reduce their allocations, partially driven by wholesaler demands for subsidies, are having a substantial impact on the steady sales decline. That comes in addition to the rise in social media and mobile technology in influencing how consumers view and absorb content.
The Top 100 chains' combined sales beat the overall business trends, which again indicates that the industry is losing smaller retailers. But the publishers who performed well in the first quarter all followed the same formula: more releases. Many of these publishers also tacked on higher cover prices, like Penny Press, which had 13 percent more releases, and an average cover price increase of about 23 percent. Time Inc.'s numbers benefitted from more book-a-zine releases under their THEI brand, as well as the higher cover price on People. Harris Publications also increased their number of releases and focused more on book-a-zine products.
Overall, the average cover price of a unit sold in the first quarter increased by 36 cents (more than 7 percent). Two factors contributed to this jump: 1) higher cover prices on many of the weekly titles, and 2) the continued publisher focus on book-a-zines with cover prices startingat $9.99. These factors helped drive the average cover price on a unit sold to an all-time high, which is one of the few good signs for the industry—consumers are willing to pay higher prices for quality printed magazines.
This year, the trend continues with the loss in sales in smaller retailers and the declining sales of smaller titles. This has a huge influence on the overall sales numbers; there were more than 8,000 fewer retail accounts being serviced in the first quarter of this year in contrast to last. The top ten chains in Q1 2015 represented 53.3 percent of total sales, compared to a collective market share of 51.8 percent in 2014. This is a trend that will likely continue as smaller retail stores exit the business.
The average dollar sales decline of the Top 25 titles was mitigated this quarter by the higher cover prices on the weekly titles. Even though the newsstand sales environment is bleak, decisions being made by publishers have a major impact. So keep producing quality content but perhaps release it in a higher quality product and quit reducing your allocations, as MagNet suggests doing the opposite has proven to only be beneficial.