First, the grim reaper came for newspapers….
Now magazines are looking bad and worse by the day. The latest: A major distributor is adding a surcharge, according to Keith Kelly in the NY Post.
Anderson News earlier this week informed publishers that it would impose a 7-cent charge for each copy of a magazine that it delivers to stores, and warned that any publisher that refuses to pay the fee could no longer count on Anderson to distribute its magazines….
Publishers, which have until Feb. 1 to agree to pay the new fee, are balking at Anderson News’ move, which would drive up costs at a time when most magazines are hurting. Indeed, American Media, which is already on the brink of bankruptcy, could be hit with a bill of up to $12 million, one source estimated. Another source said People, which has one of the best sell-through rates in the business, could be hit with up to $15 million in extra charges….
Magazines have a sell-through rate of around 38 percent and the surcharge would apply not to just the copies that are sold but to all unsold copies as well.
And magazine advertising is falling in the dumper – and it’s sure to get worse as the impact of the crash deepens. The Wall Street Journal reports at 17% plunge in ad pages in the fourth quarter against a year ago. For the year, they were off 12%.
TV’s next as auto, retail, and consumer categories suffer.
And they say the business model for the internet is crazy. At least it has no physical costs. Oh, I know, media online is supported by advertising, too, but the real opportunity there is to replace mass ads with a mass of niche ads. That is what Google did. Though Google, too, will feel the impact of the crash, it has room to grow while mass media do not. The crash is only accelerating — as in pouring accelerant on a fire — the fundamental shift in the economics of media. The change is big, fundamental, and permanent.
