Collusion is not a dirty word

“Newsstand sales will be improved by systematic pruning of titles.”

The April 2006 issue US published Circulation Management arrived yesterday. Writing on page 26 Baird Davis recommends to the US industry that they need a Title Proliferation Prevention Czar to develop distribution criteria (KPIs) which must be met before a title is approved for distribution.

“The magazine publishing industry must move beyond its self-destructive bickering and fear of governmental collusion roadblocks and adopt a program that reduces the display rack overcrowding conditions that are plaguing the newsstand market. Nothing less than the future of the newsstand channel is at stake.”

It will be no surprise to regular readers here that my view is Australia could use such a Czar – someone to decide if a title justifies being distributed. As it stands today, importers, publishers and magazine distributors make as decision about a title to be distributed. Newsagents have no say. Yet they carry a high cost of such decisions by having to provide labour and real-estate for potentially no return. Magazine distributors are paid a fee for use of their services.

I proposed such a move a month ago at a meeting with the magazine distributors. The immediate barrier is the ACCC. I am sure that once the ACCC understands how the current arrangements disadvantage newsagents by draining cash and making then inefficien and less competitive they would consider the suggestion. Consumers risk suffering because newsagencies will fall over and more magazines will be sold through the majors and this will result in a reduction in range.

Newsagent shelves are overflowing with underperforming stock is such quantity that they cannot adequately display the titles which are delivering growth. ACP and Pacific are suffering from the faulty supply model.

Newsagents are supplied stock based on what a distributor has to distribute and not based on what actually sells. This is what causes overcrowding of retail shelves and the drain on newsagent cash.

How many hair magazines do I need to satisfy consumer interest? Six, eight, fifteen? The Czar could consider this holistically rather than the current situation where each of the three distributors make decisions in isolation.

Without urgent action to fix the supply model to something more equitable for newsagents, the model itself will fail. Barid Davis’ suggestion for the US would be welcomed here by newsagents.