Though I've spent most of the last 30 years in some shady corner of the magazine business, never would I pretend to understand how the distribution end of things worked. But since I'm still on the e-mail list of the industry trade Folio, I thought it might be worth spending a few moments to explain why your favorite magazines may not be on your favorite newsstand in these next few weeks.
It reads like one of those sinking ship sagas in which cannibalism comes to play a prominent role.
And it may be about a .07 per magazine surcharge. Or not.
Still reading?
Thanks. Here's a link to the original story, which then links through to several follow-ups and some chatter from readers.
The short form, best I understand it, is this: Anderson News and Source InterLink, two of the four big companies which deliver magazines to retailers (and I'm now the occasional magazine buyer for an independent bookstore, so I have some hands-on dealings with Anderson) tried to add an additional .07 handling charge per magazine in early January. The whole publishing industry is bleeding, and this was, apparently, their notion of a transfusion. Or a tourniquet.
The big publishing houses balked. Anderson and Source Interlink pulled the offer back, paid their next round of bills to the publishers, and 13 minutes later found that the publishers had withdrawn their titles. (That's all in the original link, I'm not going to retype it here.)
What this may mean is that Time-Warner and some other prominent publishers will find themselves not available on newsstands this week. Or next week. The profane leader of Source InterLink apparently has tied up a bunch of WalMarts and is claiming the exclusive right to rack magazines in those stores, thereby blocking Time-Warner. But in the meantime there's chaos for everybody.
Now...let me try to explain, best I can, how things work. As a small publisher we delivered magazines to a variety of distributors, but, typically, one of them handled Borders and Barnes & Noble, and that's who our primary distributor was. So we would deliver the printed (hypothetical) March-April issue right about now. And they'd pay us 20 percent as an "advance" against sales." Six months after the magazine came off sale, and after some other staggered payments, they would finally pay the balance of what we were owed. If anything. Nobody I ever knew could read their statements, and nobody ever believed they were wholly accurate. I'm not sure how they could be, in all fairness. As a publisher our net on sold titles was in the 47 percent range.
On the other side, since I now buy for a newsstand with about 300 titles, it works like this: We actually have two magazine distributors. Anderson brings their titles to us in a truck, and we have limited control over what those titles might actually be (they have a profile of our store, supposedly). We put the new ones on the stand, toss the old ones in bins which they collect, they do the accounting, and we net 20 percent (less whatever is stolen, of course). We work with a second distributor, Ingram (who is principally a book distributor), who handles more esoteric titles, though there is some crossover and I spent some time switching the overlap from Anderson to Ingram because Ingram nets us about 40 percent. We have to do more paperwork with them, including ripping magazine covers off and mailing them back.
In the margins between those two figures exist the distribution network. If we're netting 47 percent as a magazine publisher, and 40 percent as a retailer, that leaves 13 percent of a magazine's cover price which is sustaining the distribution business. It is complicated and technical and detail oriented, and I wish to hell somebody had explained to me that the bar code had to be on the left side of the cover because that's where their equipment scanned sooner than they did. Stuff like that.
So here's the rub: I don't know what magazines are coming to my store on Friday. We called Anderson, and they claim it's a rumor in Folio and no big deal. I don't believe that for a minute. There may be a third distributor who will reach down into our obscure corner of Appalachia, and there may not. Ingram may pick up the titles Anderson delivers, if Anderson in fact goes out of business or whatever is on offer, and they may not.
One other thing: Anderson and a competitor turned their warehouse operations into a joint business, and that has driven costs up because now it's a stand-alone expected to deliver profits to its two investors, rather than part of the overhead.
Now...I'm quite sure that somebody will comment that we dead tree types are reaping the whirlwind. Whatever.
Magazines are primary sources for we bloggers. They are one of the few places where long-form, investigative, contemplative journalism can take place. What appears to be happening now is that three or four of the major publishers are trying to take distribution in-house again. Maybe they'll deal with my store, maybe not. And, in the main, distribution is the least of the magazine industry's worries.
But it is fundamental to our democracy that the media function. And right now it's in danger of falling into sheer anarchy. Which can be fun to watch from the sidelines, but, really, I don't want to have to explain to our customers why we no longer have the basic, fundamental magazines on our newsstands that they depend upon. I don't want to give them some new reason not to patronize us. And I'm tired of watching the rich eat their young.
And, of course, more people I know will lose their jobs to this folly.