Coast to Coast newsstand distributor to be bought by Pattison's Comag group

Coast to Coast Newsstand Services Partnership (CTC) -- one of the best known distributors of Canadian and U.S. magazines in the Canadian market -- is to be bought by the Comag Marketing Group PLC, a Princeton, New Jersey-based retail magazine sales and marketing company effective January 1.  Comag is a subsidiary of The Jim Pattison Group of Vancouver, 

 “I’m disappointed that CTC will not be carrying on after January 1, 2019" [said Dan Shapiro, Managing Director of CTC a release published on Mastheadonline.com] "but am gratified that our clients will continue to receive expert quality service through CMGC. Continuous sales declines throughout our entire eco system put the sustainability of CTC in jeopardy.”

Glenn Morgan, President of CTC, will continue in his role after the acquisition, 

Coast to Coast is a partnership between Rogers Communications and a group of major Canadian magazine wholesalers. Originally owned by Maclean-Hunter, primarily to distribute its own magazines, CTC was purchased by Rogers Media in 1994 and in 2000, a majority interest was sold to three industry veterans, Glenn Morgan, Frank Auddino, and Scott Bullock. In 2005, majority interest in the company was purchased by a consortium of the major periodical wholesalers in Canada. 

Comag Marketing Group LLC, a retail sales and marketing company, provides single copy sales strategies and supply chain solutions for magazines worldwide. The company serves mass market, direct-to-retail, and specialty market channels.  Comag Marketing Group LLC was founded in 2000 and is headquartered in Princeton, New Jersey. As of January 31, 2012, Comag Marketing Group LLC operates as a subsidiary of The Jim Pattison Group, Inc.

In 2013, Coast to Coast outsourced most of its back-office accounting to Comag to handle all billing and collection, print order and galley preparation as well as other administrative functions. 

U.S. merger creates a new, combined Magazines and Books at Retail Association

Two important retail magazine associations in the U.S. have decided to merge. The new, combined organization will be known as Magazines and Books at Retail Association (MBR). According to a story in Folio: it combines the Periodical and Book Association of America (PBAA) and the International Periodical Distributors Association (IPDA). The merger was announced at the annual Magazines at Retail conference.

PBAA was initially a not-for-profit organization  whose members consisted of organizations that published and distributed magazines and books on newsstands, both in the U.S. and globally. IPDA was a trade association principally of distributors who focussed on retail sale of magazines and books.

Jay Felts, chairman of the IPDA board, and Will Michalopoulos, chairman of the PBAA board, said in a letter to members of both groups:

“Representing the boards of each organization, it is our promise that the new association will deliver focused, effective programs and services to all members, irrespective of size, and deliver solutions to address today’s industry dynamics in a manner that meets the speed of change. Together, all members of our supply channel will offer a fresh and strengthened voice for the industry—an industry association for our future.” 

Flare is being pulled from the newsstands

Come January, Flare magazine will no longer be available on newsstands. According to a story in the Globe and Mail, Rogers Media has decided the plummeting sell-through on the magazine no longer justifies the cost. The fashion magazine's single-copy sales have fallen from 12,000 a month in 2012 (where they represented 9.6% of total circulation) to an average 2,600 in the first six months of 2015 (or 2.8 per cent.) By comparison, Flare's digital circulation has grown to average 29% of its total circulation. 

Publisher Melissa Ahlstrand said newsstand sales -- once a bellwether of readership -- is no longer thought so. 

“Whether it be through Texture or Snapchat or Periscope or print, we want to have people connect with our content and the work we’re doing with advertisers, on any platform where they want to be,” she said. 

Ms. Ahlstrand said Flare’s editor Cameron Williamson recently met with a group of university students who told him that they read the magazine. “Ten minutes into the conversation, he realized they were following us on Instagram and Twitter, they didn’t actually read the magazine. But they called themselves readers,” said Ms. Ahlstrand. “We love that, and we want to engage with that demographic on whatever platform they’re going to come to us on.”

Newssstand sales continue decline; Canadian single copy dollars down 13.2% in first half

Single copy magazine sales in Canada and the U.S. in the first half of 2015 continue their long-term decline, according to data compiled by MagNet, which tracks both wholesaler and retail sales. and reported by MediaPost, 

While MagNet cautions that some of the figures have had to be estimated, due to the closure of U.S.-based distributor Source Interlink last year and lack of results from the Barnes & Noble bookstore chain. Nevertheless, the trend is clear. Preliminary data for July and August suggests that sales in the second half of the year may be even worse than in the first half. For the full year, MagNet forecasts total newsstand sales of around $2.5 billion, around half of the figure for 2007.
Comparing first 6 months of 2015 with same period in 2014:

• U.S. total volume of magazines shipped were down 2.6% to 784 million
• U.S. volume of issues declined 18.5% to 207.5 million
• U.S. dollar volume of sales fell 13.9% to $1.11 billion
• Canadian total distribution down 16.3% to 97.7 million
• Canadian issues sold down 16.8% to 29.3 million
• Canadian dollar value of sales down 13.2% to $178.7 million

In terms of specific categories, some of the biggest drops in newsstand sales volumes were seen in crafts, down 33.1% to 2.7 million issues sold; automotive, down 26.8% to 5.7 million; sports, down 23% to 4.7 million; entertainment, down 21.6% to 6.9 million; women’s, down 20.6% to 51.9 million; and celebrity, down 18.9% to 62 million...

On that note MagNet pointed to certain self-reinforcing negative dynamics in the marketplace, most notably many retailers’ decision to cut back on the amount of space and prominence they allocate to newsstand displays. 

Type Books named retailer of the year by Magazines Canada

Type Books, the boutique store on Queen Street West in Toronto, has been named Magazines Canada Retailer of the Year for 2014. The award is made annually to recognize the importance of good, often independent, stores in building and maintaining the magazine landscape. 

"A neighbourhood bookstore on bustling Queen West across from Trinity Bellwoods Park, Type opened heroically in April, 2006, at a time when few other bookstores were starting up," says Magazines Canada. "The store has been devoted to magazines from a wide array of distributors and publishers direct, and has been committed to Canadian magazines from the beginning."

The store has the distinction of being the location for the 2014 filming of the promotional video Anything Can Happen at a Magazine Stand. 

Previous winners of the award were: 

• 2013 Salt Spring Books, Salt Spring Island BC
• 2012 Read’s Newsstand and Café, Fredericton NB
• 2011 Book City, Toronto ON, Danforth
• 2010 McNally Robinson, Winnipeg MB
• 2009 Spruceland News, Prince George BC
• 2008 Mags & Fags, Ottawa ON

Benjamin News shocks creditors by saying it can't or won't pay its bills

Benjamin News Inc., the wholesaler which closed in March, has advised its creditors to expect only 25 cents on the dollar, at best, on money the company owes to distributors and, through them, to magazine publishers. In a letter to publishers from Coast to Coast Newsstand Services Partnership's (CTC) CEO Glenn Morgan, he said that when Benjamin closed on April 4 (some 1,400 of its 4,000 retail clients were picked up by Metro News), Paul Benjamin said, in writing that all outstanding payables would be fulfilled in whole. 

"We were, however, advised today by Paul Benjamin, that BNI will now be unable to fulfill its financial obligation to CTC and the other NDs [national distributors] primarily due to BNI being unable to collect all monies owed to it by its customers and many of its jobber delivery agents. In fact, BNI has furnished us with copies of the lawsuits it has filed against all of these parties, but time will tell as to whether any of these lawsuits will produce a successful outcome.... 

"This is new information today, and obviously has come as a great shock.I did want to get something out to all CTC publishers so that you are aware of this sitaution and to advise you that we have flatly refused the proposal and are about to enter a negotiation with the goal of maximizing our recover. We do have some unique leverage in this situation and will do everything in our power to use it to our advantange," the letter said.

It's not known how much money BNI owes, but the announcement will be significant blow. It is known that BNI represented upwards of 18% of CTC's business. 

The intended closure was announced in mid-January. The almost-100-year-old Montreal based magazine and book distributor was founded in 1917 by a blind news vendor who sold newspapers on the street in Montreal. At one point the company handled over 4,000 magazine titles, delivering them to 7,500 retailers in Quebec, New Brunswick and Ontario.

There are now essentially only two English-language wholesalers in a market which 20 years ago had more than 30. At the time of the announcement, arrangements were said to have been made for publishers and retailers previously served by Benjamin News to be served by Metro News, Toronto, and TNG (The News Group), Burlington, Ontario, Socadis, Montreal, Metropolitan Distribution Services, Montreal as well as Les Messageries de Presse Internationale.

[Update] Newsstand wholesaler Source Interlink to go out of business after Time Inc. dumps it

[This post has been updated] 

[Update: Source Interlink Distribution Company, one of the largest newsstand wholesalers in the U.S., faced with losing some of its biggest customers in a dispute over price and payments, has decided to discontinue operations after 20 years in business. Michael Sullivan, the CEO, sent a letter to distributors and customers saying, in part, that 

While we have made significant progress in finding mutually agreeable solutions with publishers and national distributors alike, one of our largest suppliers has recently decided to cease supply and move in a different direction. As such, it's with a heavy heart that I am writing to advise you that Source Interlink Distribution Company will be discontinuing all operations in the near future... 

While this is truly a sad day for Source and its roughly 6,000 employees, we are hopeful that we will be afforded the opportunity to wind down our operation in a smooth and orderly manner. In the coming days, we will do our best at keeping you informed as things progress.]

Time Inc. has dumped its 2nd largest single copy wholesaler in the U.S. and switched business to a rival. It became known as part of a regulatory filing on Tuesday. The jilted wholesaler, who had been demanding a price hike, was reported to be Source Interlink, the second-largest wholesaler of the company's publications. The filing said that the decision was made because Source Interlink owed $7 million in receivables. 

The company that replaced it was reported to be the News Group, owned by Canada's Jimmy Pattison, who was already Time Inc.'s number 1 wholesaler, according to a story in the New York Post.

Source Interlink was probably betting that Time Inc., only days from being spun off from Time Warner into a new public company, would fold and accept more costly terms, one source said. 

“The feeling on the street is that this is a new Time Inc.,” said the executive. “The old Time Inc. would have folded.” 

Time Inc., headed by CEO Joe Ripp, said the dumped wholesaler was responsible for approximately 2 percent of its revenues — or just about $67 million of its $3.3 billion in 2013 revenue.

The story said that in the mid-1990s, there were 300-plus wholesalers in the U.S. but now there are three major players: News Group, Hudson News and Source Interlink.  (A similar consolidation took place in Canada during the same span.) 

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The World's Biggest Bookstore, which was arguably also the world's biggest magazine newsstand, is no more. All evidence of the recently closed downtown Toronto store, owned by Indigo Books and Music, is being removed. [H/T Kathy Vey]

Playboy magazine selling newsstand replica of first issue from December 1953

Playboy magazine last week published a newsstand replica of its first issue, published a tad over 60 years ago, with the cover subject Marilyn Monroe. That first issue was 50 cents; the reprint SIP is $9.99 and it should be on newsstands for about a dozen weeks. According to a story in Folio:

"This isn't the first time Playboy has leveraged its existing assets to spike revenue while celebrating its history. Two years ago it dug into its archive and released eBooks that highlight some of its best interviews over the past 50 years. But beyond that, the company has been monetizing its archives constantly.

"That is, iPlayboy membership enables readers to access 60-years worth of content online or on their mobile devices. There are three membership options: month-to-month for $8.00, an annual membership at $5.00 a month and a two-year membership at $4.16 a month."

Playboy founder Hugh Hefner started the magazine with $8,000 raised from 45 investors (including $1,000 from his mother). He was originally going to call it Stag Party. The first issue, which featured pictures of Monroe that had been taken from a 1949 nude calendar, sold over 50,000 copies. 

Magazine distributor Benjamin News is closing down by April

Benjamin News Group, which has been in the magazine and book distribution business for almost 100 years, will close down in April. The family-owned business, which is based in Bois des Filions, Quebec, was founded in 1917 by Charlie Benjamin, a blind news vendor who sold newspapers on Notre Dame Street in Montreal and whose grandson Paul made the announcement. The closure will result in 225 people losing their jobs.

"Quebec is probably the most expensive market in North America to distribute magazines and books. It has the lowest density,” [Benjamin] told CTV Montreal. “The sale of the printed word, especially magazines, has decreased radically."

He said that a variety of deals had been made to allow other companies to take over his distribution to 7,500 retailers in Quebec, New Brunswick and Ontario. Benjamin handles over 4,000 magazine titles. 

Halifax's Atlantic News marks 40 years as the go-to place to get magazines and papers

Michele Gerard

We're sorry we missed the party October 19 when one of Canada's best independent magazine stores, Atlantic News in Halifax, turned 40. It's quite a landmark for the store -- which carries 5,000 titles (!). Many of these are Canadian indy titles which are given loving care and attention by the current owners, Michele and Stephen Gerard. 

They took the business over in 1997. Michele told the Halifax magazine blog the secret to the longevity of the store is service and selection and getting to know their customers. She was asked how the business has evolved over the years:

“I don’t know that it’s changed dramatically since we've been here but there’s been a change in the newspapers that we get in and how they get here. I’d say one of the biggest changes is that we can print same day on-demand newspapers right here on the spot. I also think we are seeing more niche magazines being put out that are beautiful books, almost works of art, such as Kinfolk, Chickpea and The Gentlewoman magazines. They may be put out less frequently, but they are so beautiful and meant to be kept, almost like coffee table books or collectors’ items....

“I really think that people still enjoy relaxing with a hard copy of a magazine or newspaper. But nowadays, people spend a lot of their leisure time on-line on Facebook, Twitter, Instagram, etc…. It’s all very addictive and it doesn’t leave as much leisure time to sit down and relax with a good magazine. Having news available on-line does affect our sales but we still have a local clientele that prefer to read the real thing.”

Lads' mag push-back against "fundamentalist feminist nonsense"

A former editor of Front, one of the so-called "lads' mags" that the giant UK supermarket chain Co-Op is requiring to be sold in "modesty bags", attacked the chain for caving in to "fundamentalist bullying". According to a post on Press Gazette, Piers Hernu (now a features editor at the Daily Mail) said the Lose the Lads' Mags campaign was "fundamentalist feminist nonsense".

The publishers of other such titles, Nuts and Zoo, have told the Co-Op that they won't stock their titles in the stores rather than comply with the edict. They had already agreed to "tone down" their covers to avoid a ban by Tesco, the biggest retailer. Hernu is not convinced.

“Magazines all sell on their front covers so if you obscure it you’ll strangle it at birth,” said Hernu. “So you are consigning it to economic doom.”

Responding to claims from Kat Banyard, founder of UK Feminista, that magazine such as Front, Zoo and Nuts were pornographic, Hernu said: “Women in bikinis is not what I would call pornography.”

Quote, unquote: Controlling the narrative about single copy sales

“The perception issue is that we are going away; we’re dinosaurs, and we have horrible press. We also seem to be our own worst enemy, because in the name of transparency we now trumpet our sales results on a quarterly basis, so news writers – who don’t really understand the business – can write articles about the ‘Continued Problems of the Newsstand: What Should Be Done!’"

-- Joe Berger of Joseph Berger Associates, a circulation marketing and consulting firm in Chicago, quoted in an excellent summary article about the newsstands by Samir "Mr. Magazine" Husni in the July/August issue of Publishing Executive magazine. Berger says that change needs to happen by having the magazine distribution industry control its own narrative.

Racy "lads' mag" publishers defy demand for coverups; pull titles from 4,000 British stores

The publisher of racy lads' mags Nuts  and Zoo are pulling them from the shelves of the Cooperative Group's 4,000 stores in Britain,according to a story in the Guardian. It is a response to the Co-op's demand that such mags as Nuts, Zoo, Front and Loaded be given "modesty covers" to hide their explicit, lurid front covers or be banned from its stores. IPC Inspire, which publishes Nuts, is the first of the titles to refuse, saying that the Co-op is trying to prevent shoppers from freely browsing a legal magazine. "Co-op's knee-jerk attempt to restrict access to a product that consumers have enjoyed for nearly a decade is wrong,"  said Paul Williams, managing director. 

Bauer, which publishes Zoo, had been attempting to respond to the Co-op's ultimatum by toning down its covers, but said it, too, would now boycott Co-op. [Photo: Dave Thompson/PA]

Tesco, a leading grocery chain in Britain and one of its biggest retailers, had  demanded that the lads' mags "tone down" their covers. The retailer and others were trying to meet demands of consumer groups such as UK Feminista which were lobbying for such magazines to be removed from the shelves altogether. 

U.S. Armed Forces dump 891 newsstand magazines citing declining demand

AAFES store at Dyess Air Force Base
near Abilene. [Dallas Morning News] 

The Army and Air Force Exchange Service (what, at one time was called the PX) is permanently removing 891 magazine titles from its stock, about 33% of the total. According to a posting on the website of the U.S. Department of Defense, the shelf and floor space saved will be given over to other in-demand products and services, such as electronics. 

AAFES officials say there has been a sustained decrease in demand for single copies, with sales of all magazines at exchange facilities down 18.3% between from 2011 to 2012. 

“According to the Audit Bureau of Circulations, digital magazines continue to expand their presence in the industry,” Army Lt. Col. Antwan C. Williams, AAFES public affairs chief, said in a statement. “Like their civilian counterparts, exchange shoppers' increased reliance on digital devices to access content virtually has resulted in a sustained decrease in demand for printed magazines.” 

Consistent with its mission to provide quality merchandise and services to its customers at competitively low prices and to generate earnings which provide a dividend to support morale, welfare and recreation programs, Williams said, AAFES is adjusting its stock assortment to align offerings with industry counterparts.

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A newsstand pops up in Brooklyn

A pop-up newsstand that sells indy magazines,zines, books, greeting cards has taken over the Metropolitan Avenue subway station in Williamsburg, Brooklyn. It opened up June 15 and will close down July 20. It's located at a busy intersection of the G and L trains and is a partnership between the zine fair operators 8-Ball and ALLDAYEVERYDAY, a creative company. The store features selections of independent printed matter, some of them little zines sold out of a repurposed vending machine. [See earlier posts about such vending here and here.]

Read's Newsstand and Cafe of Fredericton named MagsCan retailer of the year

Read's Newsstand and Cafe in Fredericton, New Brunswick, has been named Magazines Canada's retailer of the year for 2012.

The downtown Fredericton store is the flagship of the Read’s/United chain of stores, with other stores in Moncton, Riverview, St. John and Halifax and in addition to the best selection of magazines for miles around (including most Magazines Canada-distributed titles),  also sell books, have a healthy foods section and a full-service café with sandwiches and a patio on Main Street.

Jeff Magnusson, who co-owns the chain with John Devona and Mark Smith, has been managing the Fredericton store for nine years, he and Devona designed it when they moved from a location down the street in 2004.  

“Our idea at the time was to get away from the convenience store end—tobacco was getting trickier and we wanted to offer a different experience....We’re specialists and proud,” Magnusson says.

Read's joins a select club of other recent winners of the retailer of the year award, including Book City (Toronto Danforth), McNally Robinson (Winnipeg), Spruceland News (Prince George, B.C.), Mags & Fags (Ottawa) and Atlantic News (Halifax, NS). 

World's Biggest Bookstore -- and magazine rack -- likely to close next year

It's not only the self-proclaimed World's Biggest Bookstore, but it is also one of -- if not the -- largest magazine store in Canada and word that it may close will be shaking up the industry. On the other hand, it may be merely a lease negotiating ploy by Indigo Books and Music.

A story on Quill & Quire, quoting the Toronto website Yonge Street, says the lease on the 25-year-old, 64,000-square-foot bookstore which goes back to the days of Jack Cole and Cole Books will not be renewed and the Cole family is looking for a single retail tenant to take over the space, possibly a "big box" store.

"Indigo Books & Music, which owns the bookstore, had been seeking a “significant” reduction in rent from the store’s owners, citing a downturn in business. And while the lease on the iconic property near Yonge and Dundas Sts. doesn’t expire until December 2013, the property is already in play," said a story in The Toronto Star.

It says a condo developer is reported to have already offered $38 million for the site.

“The decision to not renew the lease at the end of 2013 was based on a thorough review of every facet of our World’s Biggest Bookstore business,” Indigo spokeswoman Janet Eger said in emails to the Star.

“In the meantime, we’ll be working towards a seamless transition for our valued customers and employees, the details of which are being finalized.”

U.S. "non-traditional" circulation methods pass newsstand circ for the first time

The recent tectonic shifts of the U.S. consumer magazine business is probably no better illustrated  than by the report of alterations in circulation business practices over the past four years (2007 - 2011).

Publishers are apparently discovering the favourable economics of replacing the newsstand circulation they have lost to recession and changing technology with so-called "Paragraph 6" circulation and "replica editions".

Paragraph 6 refers to the segment of the Audit Bureau of Circulations (ABC) form where publishers report alternative methods of circulation (verified, sponsored, partnership, paid sponsored, award (mostly airline miles redemptions), combination (selling two or more publications at reduced prices, usually below half the basic price.)

According to an extensive roundup story in Audience Development, Paragraph 6 circulation (37 million) in 2011 exceeded the amount of newsstand circulation (31 million) for the first time.

"These sources are generally considered of “lesser quality” than individually sold circulation sources. That’s why they are categorized separately on ABC statements. Paragraph 6 sources have become a powerful and steady influence in economically sustaining circulation levels."

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Convenience store exec says magazines sections are shrinking because they're too much trouble

Magazine sections at convenience stores are shrinking and one of the reasons is that stocking and shelving magazines is too labour intensive, according to Peter Chappell, senior category manager for Mac's. He told a Toronto meeting last week of the Periodical and Book Association of America (PBAA) that magazine sales represent just one per cent of sales at Canadian convenience stores, while foodservice sections were markedly more profitable.

For the first quarter of 2011, magazine sales are down six percent compared to the same period in 2010, a downward trend that shows no sign of flattening,  he said, and said that while suppliers of potato chips, soft drinks and other products help stock shelves at Mac’s, "magazine wholesalers do not service convenience stores." In other words, store personnel have to fill and tidy the racks and arrange for returns.