Wednesday, September 21, 2005

So we think we've got problems?

In Britain, newspapers and magazines are distributed together to retailers and newsagents, mostly by three large wholesalers. Some 90% of British magazines are sold by single copies or by "standing order" with the corner newsagent.

Now, because this distribution system in some way is considered to contravene European Union regulations, the Office of Fair Trading (OFT) in Britain is considering forcing newspapers and magazines to be delivered separately, according to a report in the Guardian. In part, the story says:
At first glance this may seem like no change at all, or at least not an important one, but if the OFT's draft decision is upheld - its final ruling is expected next month - not only could up to 1,200 independent corner newsagents be forced out of business, but magazine publishers warn that up to 1,000 titles could close. For good. Large retailers would carry only the best-selling titles, and the demise of the smaller retailers would hit people in rural areas.
The reasoning behind this apocalyptic scenario is that the costs of maintaining two systems of distribution will be passed on to retailers. As the thinking goes, the large retailers will mitigate the cost by dropping magazines that have a relatively low sell-through. The smaller corner newsagents will see their margins severely pinched or go out of business altogether.


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