Industry expert John Harrington offers…
What Happened to the Newsstand? Understanding That is Step One
By John Harrington
There are times when seismic changes take place and they are immediately recognized as altering the landscape so dramatically that things will never be the same. On the other hand, the underpinnings of an environment may shift radically, but a confluence of events occurring nearly simultaneously may manage to camouflage the true impact until the truth gradually emerges in its own good time.
In the summer of 1995, when a major retail chain broke down the wholesaler structure that had sustained the magazine distribution system for more than 40 years, it was quite universally recognized within weeks, if not days. In one wholesaler’s words, “The genie is out of the bottle and it is not going to be put back in it.” By the fall of that same year, the financial and contractual relationships at every level of the channel had changed radically and everything about the business was forever different. That was a seismic change that was recognized on day one.
In early 2008, the nation’s economy began its rapid slide into the Great Recession, and at the same time magazine retail sales, which had been stable for four years or more, precipitously fell. The recession proved to be the deepest since the Great Depression nearly 80 years before, and newsstand sales tumbled at nearly double digit rates through the year and into the next. In fact, 2009 saw the collapse of one of the largest magazine wholesalers, putting the newsstand channel through a convulsion perhaps equal to that of 1995. In time, the nation’s economy began to recover, albeit haltingly, but magazine retail sales have continued to deteriorate, falling by nearly 10% last year, and cumulatively by more than 30% since 2007. For most of the channel’s players, it was hard not to associate the initial newsstand collapse with the general economic malaise. But then, why did magazine sales continue to suffer when the general atmosphere improved? Was there something that had been missed?
Well, maybe not entirely missed, but certainly not immediately and clearly comprehended. The impact of digital technologies, certainly present and progressing for many years, advanced at warp speed during the 2008 to 2013 period; and by the time American consumers were ready to start spending money again, they had found other means of getting much of what magazines had previously provided. Yes, the internet had been a factor for a decade or more, as publishers established websites and digital entrepreneurs were challenging traditional concepts of media. However, consider that since 2008, Apple introduced the iPad and created the tablet industry, providing a new platform for delivering magazine content; social media became a staple of personal interaction and communication; mobile devices (once known prosaically as cell phones) may have become the dominant means of human contact; and the world’s daily vocabulary has become overwhelmed by words and phrases hardly ever heard only five years ago.
Consider just one magazine category, celebrity weeklies. Of course, it is the category that drove the relatively strong newsstand numbers of 2004 to 2007, and, in itself, masked some signs of weaknesses in the broader newsstand market. During those years, People, with a 30-plus year history of success, and Us, more recently converted to a weekly, found themselves confronting new competitors – In Touch, Life & Style Weekly, and OK! – and all them were doing pretty well. Since then, nearly all of the losses at newsstand can be attributed to the declines suffered by those five titles. The information once provided by these magazines is now available to the public earlier and easier via the new media enumerated above.
At this particular moment, that profound change is being demonstrated again. Coverage of the horrible bombing at Monday’s Boston Marathon and its aftermath would have, not all that long ago, driven some staggering numbers for the celebrity weeklies and for the newsweeklies as well. There undoubtedly will be a bump for some of them, but it will be only a shadow of what the numbers once would have been. Before they reached the newsstand, the public had access to, and was witness to all the news the magazines could provide, and more.
So, since “good old days” of 2007, the newsstand channel was buffeted by the recession, but probably as much, if not more, by an accelerated digital revolution that will have an even more sustained impact. Granted, there were some who recognized this earlier, while for others of us, the dawn was more gradual, but now it is clearly evident. Also evident is the realization, while the business will not go back to the levels of 2007 and earlier, that magazine media (acknowledging the new terminology) will still need a sustainable newsstand capacity. Magazine media extends now into platforms only once dreamed of by a few visionaries, but it is a continuum that begins, as restated to me very recently by the president of one of its largest players, with the newsstand. It will be the task of leaders like him, at every level of the magazine distribution channel to understand its frailties, address them, and build a viable, sustainable newsstand structure for the future.