ND's, Magazine Publishers Discuss Grab-Bag of Issues During Recent Panels

Topics--and opinions--ran the gamut during two recent industry panels featuring national distributor, publisher and association executives. 

One was sponsored by the Periodical & Book Association of America (PBAA) and moderated by Will Michalopoulos of Hachette Filipacchi; the other took place during the 2008 Publishing Conference & Expo sponsored by Publishing Executive and Book Business and was moderated by PBAA executive director Lisa Scott. Both took place in New York.

Several of the speakers at the two events overlapped. Here are highlights pulled from both of these fast-paced, far-ranging discussions:

Dale Oehler, Senior VP, Client Group & International, Time/Warner Retail:

* Publishers need to focus on stronger communication with higher-level retailer decision-makers to secure expanded or new presence in both traditional magazine channels and nontraditional channels, such as restaurant chains.

* While tackling larger challenges, the supply chain also needs to stay focused on the smaller but critically important day-to-day functions, such as merchandising and O&R. “We now have refined, robust data down to the store level. We need to find more effective ways to put that to work,” Oehler said.

* All publishers must be realistic about the number of stores and retail classes of trade appropriate for and achievable by their individual titles. “This is not a choice, it’s a reality,” Oehler stressed. “The system is punishing any who try to pump unwarranted copies into it. And those who still try to do this also damage our category’s credibility with retailers.” 

* Publishers also need to better leverage their efforts by putting greater focus on retailers/stores that are the highest-producing for specific titles, rather than expending significant resources on marginal dealers. 

* Online and print media are different consumer experiences, and can support and complement one another, as long as the publisher creates a synergistic, rather than redundant, content strategy.  

Jay Felts, Senior VP, Sales, CoMag Marketing Group (CMG): 

* Growing competition from confections and other categories for front-end display space, along with supply-chain instability, are the two biggest challenges facing the magazine category today.

Regarding the latter, roles and incentives within the channel need to be aligned. “Wholesalers should be focused on being world-class logistics providers,” Felts maintained. He added that realigned roles and incentives might also enable the category to re-engage and service the convenience store class of trade.

* The magazine category needs to become more effective at working with retailers to “get out in front of the curve” and be part of the process of planning new store formats and reformatting existing stores. 

Gil Brechtel, president/CEO, MagNet:

* Part of wholesalers’ financial challenge is that while cutting copies out of the system addresses variable costs, it does not address fixed operational costs. However, if some wholesalers continue to focus on cost cutting instead of “driving sales,”  this will eventually damage the overall business.

Brian Beaudry, VP, Distribution, Distribution Services, Inc. (DSI): 

* “Magazines have challenges, but all involved in publishing and the newsstand in particular know that the ‘print is dead’ theme we see constantly in the media is overblown hype,” Beaudry emphasized. “We need to counter that by getting our story out more effectively, particularly to our retail partners.”

* Rising costs are making it increasingly difficult to implement creative in-store promotion programs, even for category-leading magazines. 

* Benefits accrue to all when wholesalers work with publishers and national distributors to hone distributions. 

Jim Roberts,  Executive VP/COO, Kable Distribution Services, Inc.: 

* Sustainability initiatives are valid and increasingly important; however, overall sales would suffer in the absence of data-based, by-store decisions on title mix and allocations.

* Kable’s work with using household magazine subscription penetrations by Zip codes to hone by-store title mixes and allocations in specific geographic areas is producing sales/efficiency lifts and buy-in from wholesalers, according to Roberts, who stressed that any publisher or distributor can use the basic method. 

Will Michalopoulos, Senior Director, Retail Newsstand Marketing, Hachette Filipacchi Media, U.S.:

* “We’ve done a lot of out-of-the-box [in-store] promotions that have performed phenomenally, but the execution and compliance at retail that are so critical to success are a major challenge,” Michalopoulos said.

Dennis Porti, executive VP, Curtis Circulation Co.: 

* Rising paper and postage/marketing costs may encourage some publishers to reduce subscription portions within the overall circulation mix, and greater focus on the newsstand could benefit single-copy sales marketing and performance. 

* Better managing the efficiencies of the largest-selling titles, with the largest by-store draws, is the biggest leverage point for improving overall category efficiency. This happens in bookstore chains, where up to 4,000 different magazine titles continue to be sold, Porti pointed out.

* If the logistics could be worked out, it would be beneficial to vary cover prices by region, just as marketers of other types of consumer products do.

Jerry Lynch, president, IPDA:

* While magazine unit sales have been somewhat flat overall, retail dollars have increased, and magazines have strong household penetration. “There is, without question, a big opportunity for increasing magazine sales at retail,” Lynch said.

* Demonstrating magazines’ ability to help increase overall market-basket expenditures is a critically important aspect of communicating with retailers.