Time Inc. holds back popular titles in retaliation for wholesale surcharge demand

It's one thing to ask, another to get, particularly when it comes to as big and important a U.S. magazine publisher as Time Inc. Recent announcements from two big, U.S. magazine wholesalers were that they were going to tack on 7 cents to every copy they sold on newsstands. Mediaweek has reported that Time Inc. struck back saying it was not going to provide Source Interlink, one of the wholesalers, with any copies of next week's issues of Time, People and Sports Illustrated plus other titles.

While Patrick Bowman, vice-president of category management for Anderson News Co., which first announced the surcharge, says that "quite a few" publishers have agreed to the fee, the whole issue is becoming quite tense. Anderson not only was somewhat preremptory in the way it announced the surcharge (saying, essentially, take it or don't be distributed) but it also published a four page statement slamming "misconceptions". It said that the 7 cent surcharge would cost the industry about $152 million and that it was critical to keep wholesalers solvent.

Time Inc. hasn’t determined whether it will use rival wholesalers or other companies to replace Source and how it will respond to Anderson’s fee demand, the source said. But close observers of the industry have said it’s highly doubtful magazines could replace a major wholesaler’s place in the distribution chain, pointing out that competing wholesalers would face the same financial challenges that led Source and Anderson to demand the 7-cent fee.

Related posts:

• Pay an extra 7 cents a copy, or else, U.S. magazine distributor says
• Source Interlink adds 7 cent surcharge, following Anderson's lead
• News Group won't surcharge on single copies, at least for now