Canadian Magazine Industry News
15 August 2013,     TORONTO
How to fix the broken newsstand system: Michael J. Fox
With newsstand sales hobbling, much of the talk at yesterday's PBAA Canada meet centred around change. It's time to entertain new ideas, said speakers and attendees, spurred by a presentation by Michael J. Fox.

Speaking August 14 in Toronto to a gathering of magazine publishers, retailers, wholesalers and distributors, the publisher of Garden Making and new chair of Magazines Canada floated some ideas about circ that he admitted might be radical or naive (and in some cases not even his own). Regardless of whether the suggestions are doable, Fox's point was that it is time to try something different, because the same-old means sales keeping sliding.

Michael J. Fox speaks at PBAA Canada 2013, held at the Old Mill in Toronto
Michael J. Fox speaks at PBAA Canada 2013, held at the Old Mill in Toronto

"The economics no longer make sense for a lot of players," Fox said, noting that everyone in the chain is facing challenges. "Margins per copy are not very good."

Fox said that fighting over who gets what slice of the cover price pie coupled with historical industry competitiveness is preventing the consideration of new ideas. "The system was supposed to work," he said, but doesn't anymore, leading to today's climate where Fox said there is little incentive to explore newsstand marketing.

Here are some thoughts from Fox on switching from a model of abundance, to a model of scarcity.

Get the margins up to 100%

The idea behind Fox's scenario is to get the juices flowing, and to move units. Copies could be re-allocated with frequently rejiggered newsstand  configurations (which also means scrapping RDA); putting new or hot items at the front and repositioning older titles that are known to sell mainly in the first week; or maybe even using copies as shopper incentives. "You pay $50 on groceries, you get a free magazine of your choice," Fox suggested.

All copies leave stands with consumers

This model might require having a no-return policy in place and cutting press runs (apologies to printers, said Fox, who are currently the only parties who get paid for every copy produced). For retailers, it creates opportunities for new display ideas, making an event out of the release of new issues, and specials, like bundling unsold issues as gifts. "There would be more copies in the consumers' hands rather than at the shredders," Fox said.

He also mentioned publishers paying fees to distributors and wholesalers, and maybe selling copies to retailers at a third of the price. Who takes the hit? The publisher could absorb 25%, the wholesaler 5%, and the distributor 3%.

Put the data to work

How to know where to place copies and how to reconfigure the newsstand on a regular basis? Which magazines to bundle with what products? What magazines to publish, let alone stock in stores? In the current system of RDA and sending unsold copies to the cutters, "there is no real incentive to make use of all the data we now have available," Fox said. "Use databases to actually market," he said.

Masthead will have more on the Periodical & Book Association of America's 2013 PBAA Canada event to come. In the meantime, share your own ideas on how to shake up the newsstand in the comments section below.

— Jef Catapang
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