Canadian Magazine Industry News
12 June 2009,     NATIONAL
Consumers and small mags the losers in a new single-copy world?
It’s been almost nine months since Chapters-Indigo introduced a policy whereby most new magazines must spend at least $1,250 on newsstand promotions to get authorized by the retailer, a policy that has provoked strong-but-mixed reaction within the distribution community.

On October 14, Bruno Monti, senior vice president of publishing at Indigo Books & Music Inc., sent e-files addressed to “All National Distributors and Publishers” that stated, “All new titles must be promoted with Indigo first.” The cheapest retail promotion the retailer offers—a mainline feature pocket—costs $1,250 for a two-week booking period. Chapters-Indigo has 88 stores across Canada.

The main issue for retailers such as Indigo is shelf space, said one distribution source who asked not to be named.

“At one point in time, [Chapters-Indigo] wanted to carry every magazine, but they keep examining and modifying their factors,” the source said.

A second distribution source says he sympathizes with the retailer because too many new publishers launch magazines without sound business plans. “I’m sort of torn on this,” he said. “I do think small new titles have a chance. But I’m the guy who sees all the new stuff that comes into the marketplace. There are some guys who produce magazines for their own ego… I see too many publications where I go, ‘I can’t believe trees were cut down to produce this product.’”

Another source in distribution, however, says it’s unfair that publishers should have to pay a promotion fee just to get access to a store—particularly at Chapters-Indigo, which is often seen as the “launching pad” for new titles. “As far as I’m concerned this shouldn’t be allowed,” he said. “It’s not just the publisher who’s affected, it’s the consumer. They can’t find the products.”

In his letter to distributors and publishers, Monti wrote, “Indigo Books & Music Inc. hereby authorizes [wholesaler] The News Group to sign off on all new titles in accordance with the attached grid for RDA payment and Promotional booking. This grid is in accordance with a new reduction in overall title count on the Indigo authorization lists for both large and small format stores to be implemented effective immediately.”

Kevin Brannigan, vice president of circulation in Canada for The News Group, declined to comment. “This is a matter between the retailer and the publisher, and The News Group has no involvement in this matter,” Brannigan said via e-mail.

In an e-mail response to queries about authorization policies at Chapters-Indigo, public relations director Janet Eager replied, “The e-letter was originally sent to formalize the authorization process of new magazines during the fall of 2008. At the time there were over 5,300 titles vying for consumer attention on the newsstands. There are fewer titles currently but regardless the setting of guidelines for authorization continues to be important in managing this business for us.

“As many retailers do, we encourage the wholesalers from whom we purchase to work with their publishers to promote their new titles. This co-op fee for featured promotion is not a requirement to do business with us. We carry new titles on occasion that have no marketing co-op attached, and we won't carry every magazine that does.”

Eager did not, however, provide examples of titles that have been authorized without promotion since the Oct. 2008 communication went out.

Shoppers Drug Mart, Loblaws, A&P and 7-11 have also recently instituted similar “no promotion, no authorization” policies, sources within the Canadian newsstand industry say. Distributors typically have the option of swapping a new title with an already authorized title, Masthead was told.

Jon Spencer of circ consultancy Abacus Circulation says promotions are rarely worth the expense for the kinds of smaller titles he represents. “The extent of that surcharge is so huge compared to any revenues any small magazine is going to get,” Spencer says. “Plus, there’s the extra printing costs I’m going to incur. Small magazine printing costs is not like printing an extra copy of Maclean’s. It’s like doubling your press run.”
— Marco Ursi
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