Wednesday, February 09, 2011

Major U.S. newsstand distributor tacks on a $50 monthly "service charge"

This is an ominous development for independent publishers. Source Interlink, one of the largest wholesalers in the magazine business in the U.S. has unilaterally announced that it is tacking on a $50 per month charge to all accounts to cover chain solicitation, distribution analysis, allotment management, and online sales tracking. And here we thought that these things were paid by their cut of the cover price. A post by columnist Linda Ruth on Audience Development says
This is the kind of action—unilaterally increasing the cost of doing business for publishers on the newsstand—that caused a firestorm in our industry and put Anderson News Company out of business. This time, of course, no one will go out of business—unless maybe it’s an independent publisher.
Isn’t that putting it a bit strongly, you may ask? After all, it’s only $50 a month, six hundred a year—not enough to cause major industry backlash. And certainly not enough to put a distributor—or a publisher—out of business.
Unless, of course, you are one of those publishers for whom the line between profitability and unprofitability is so thin that it’s a toss up, each issue, which it will be. One of those publishers that wonders, each month, if they still can make their publications available to readers via the newsstand channel.

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