Newsstand's Good News--How Good Is It?

“It’s all very well to say that the newsstand slump is the result of the recession,” said Denise Robbins of NewBay Media, “but to what degree will the sales ever come back?  And where will the publishers be when they do?”

This was in response to some recent blogs of mine suggesting that there might be more (or less) to the loss in print sales than the transition to digital.  If the recession plays a role in the downward trend, presumably some of that will be reversed as the economy gets stronger.

To the indications that I listed in my earlier posts, we can add another bit of good news:  lots of launches so far in 2011, with more in the third quarter than in the same time period in the last two years, according to Samir Husni in his Mr Magazine blog.

But, asks Robbins, will we ever recover to the point of having a profitable newsstand print run again?  And if not, what is the merit of being on the newsstand? 

Let’s take a look at the numbers.  Suppose you are paying 90 cents a copy to print and ship your publication.  Sure you could go cheaper but 90 cents is not an insane amount for a high-quality independent publication with a good page count.  Suppose you are a special interest publication with a fairly modest newsstand print run of 60,000 copies.  For each issue you print and ship, then, you are spending $54,000. 

Now suppose, keeping the needs of your readers in mind, that you are trying to keep your cover price under $5.00.  With the increasing pressures on discount from wholesalers, retailers, and distributors, it is very possible you are getting only about 40% (likely a bit less) of every copy sold.  At a 40% remit, you’d be getting back $1.98 per copy sold. 

Now suppose you sell only a third of the copies you print and ship—again a reasonable assumption for a special interest publisher in today’s environment.  That equates to a sale of about 20,000 copies per issue.  Based on all the suppositions so far, the best you can hope for in revenue per issue is $39,600.

What that means is that you are spending $54,000 per issue to make $39,600.  And what that means is that every issue you are spending $14,400 of your publication’s net revenues to keep a print publication on the newsstand.  If your publication is monthly, that’s a loss of $172,800 per year.  How long are you going to keep that up?  And, to Robbins’ question, why would you?

Of course publishers have options.  They can cut the cost, and the quality, of their publications.  They can raise their prices.  They can cut their draws.

And they can begin to move their resources from their print publications to their digital editions. 

Is there still a merit in being on the newsstand? And will there continue to be? In five years will we still want to be seen by our readers and our advertisers in the stores in which they shop (if they are still shopping at retail in five years)?  Will we still want the satisfaction of seeing a newsstand browser respond to the cover, pick up the publication and flip through it, and take it to the cash register to buy?  Will we still be looking to newsstand as an important source of subscribers to our print and digital editions; an important gauge of reader interest and response; an important addition to our rate base claims?  And, to pick up on a quote from John Mack Carter in Husni’s blog, will we still see newsstand as “the acid test of any new magazine”?

Time will tell.  But if in the meantime publishers don’t get some kind of return on their newsstand investment, some of them might not be around for the verdict.