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Negotiations Between Anderson News and Publishers/Distributors Get “Intense” as Consumer Magazine Distribution Crisis Settles to a Simmer
Monday, October 15, 2007
Jeremy Greenfield

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According to The New Single Copy, Charlie Anderson, CEO of Anderson News, and some of his team have been in New York City this past week for meetings taking place “regularly and intensely” with publishers and distributors to solve the crisis that erupted two weeks ago when distributors threatened to cut off shipments of magazines to Anderson News, the nation’s largest magazine wholesaler and prime supplier to Wal-Mart. The report also notes that the “immediate threat of disruption [of shipments of magazines] had receded”. But Anderson is still seeking to change the basic economics of the distribution change, which have been changed by the introduction of scan based trading (SBT).

For the retailer, this crisis is not as dire as for Anderson News and the publishers. Magazine sales represent only a tiny percentage of total business at most major retailers, excluding book stores. For Anderson, a company that also distributes music, books, and DVDs to Wal-Mart (along with fireworks and other goods), magazines distribution represents a much larger chunk of business, but, with diminishing returns. For publishers, however, this issue could cut to the heart of their business, affecting newsstand sales, circulation numbers, and, as a result, page yield and page numbers.

Anderson is seeking a change that will positively affect its bottom line, whether it means the publishers assuming the cost of inventory of paying a higher cost for distribution. Other options include shutting down the magazine distribution business altogether or selling it.

As of now, no hard deadline has been set for the cessation of distribution of magazines.
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