The latest from MediaWeek.com:
Robin Steinberg, senior vp and director of print investment and activation at MediaVest, said that if the newsstand loss is estimated to be 5 percent or under, “using strategically placed copies is not a bad short-term solution.” White took a harder line, explaining, “I don’t think [verified] is the answer. If it is a small amount, they have to come clean, and I need to understand, is that really going to give me the quality of reader that you get from newsstand?”
The disruptions could be short-lived. At first, it was unclear if retailers would accept Time Inc., Bauer and AMI magazine copies from other major wholesalers, presumably The News Group and Hudson News. A source close to the situation said that some major retailers, including Kroger and Meijer, had started to accept them. “Now that The News Group is going to Kroger with Bauer, AMI, Time Inc. product, that solves a problem from the publisher perspective,” the source said. “It appeases the retailer. So now they just have Anderson and Source [Interlink] saying, ‘How long can I continue to just deliver books?’”
In the latest twist, Source has already blinked and rescinded its demand for the 7-cent fee. As for whether Anderson and Source would be forced to shut down without the bulk of its weekly magazine business, the source said, “I don’t think it’ll be long now.”
Anderson didn’t respond to requests for comment. Source president and COO Jim Gillis maintained the company is viable and warned publishers they face sharp dropoffs in sales, with smaller, specialty titles especially vulnerable. “Fifty percent of the U.S. isn’t going to get product,” said Gillis.
The disruption comes at an already fragile time for single-copy sales, whose declines have been worsening amid weak consumer confidence. The wholesalers said they needed the proposed fee hikes to shore up their struggling businesses. The hikes were estimated to cost the magazine industry more than $150 million annually.
Meanwhile, Anderson News has suspended operations:
Anderson News suspended its business operations over the weekend after major publications stopped shipping magazines to the Knoxville-based distributor.
While Anderson News plans to continue to talk with publishers and retailers, it said it had no choice but to cease operations immediately because it was "incurring unsustainable costs."
"We continue to work toward an amicable solution. I have been told by our two largest publishers that any interruption of service should last only a few days. I am not quite sure if they really understand the situation. This is a mess for all of us," Anderson News CEO Charlie Anderson said in a statement released Saturday.
Only a 'skeleton crew' will remain at Anderson:
Anderson staffers were notified of the decision during a recorded conference call Saturday. “We aren't reporting to work Monday since we aren't delivering magazines,” one affected employee, who wished to remain anonymous, told FOLIO:.
The employee said the news affects Anderson employees at Anderson News, Prologix East, Anderson Services and Twin Rivers Technology. In the meantime, a “skeleton crew” will remain in place.
It was not immediately clear how many employees will be affected or how long the shut down might last. CEO Anderson did not immediately return an e-mail seeking comment.
Stay tuned for futher developments.
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