Second Half 2008 Newsstand Sales Vanish

Today Folio.com published a very interesting look at declining magazine sales. The recently-released second-half 2008 ABC and BPA newsstand sales data revealed (based on a preliminary analysis) that the unit sales of audited publications fell a devastating 14.9 percent and the revenue declined a record 6.7 percent.

Here's an excerpt from the story:

The sales slide in the second half of last year affected nearly every publisher and every magazine category. However, the adverse effect was most pronounced among checkout titles. Checkout sales, which account for about 70 percent of the newsstand revenue of audited publications, drive the newsstand market. Within the checkout sector, the sales of celebrity titles have the greatest influence.

Over the last five or six years, celebrity titles have lead a newsstand sales surge. But the celebrity sales bubble may be ready to burst. In the second half of last year the unit sales of the six major celebrity titles (People, US, In Touch, Star, OK!, and Life & Style) declined 20.3 percent, and experienced its first ever revenue fall—6.9 percent. Among the celebrity titles People sales were the anomaly. Its unit sales were relatively stable (declined only 0.8 percent), but the sales of the other five titles in the celebrity category fell a combined 27 percent. This decline appears to be a result of the 2007 mega-price increases (50 percent) for the two Bauer celebrity publications In Touch and Life & Style.

These pricing changes have been a market catalyst for reducing the number of multiple title purchases and concentrating sales on People to the detriment of the other celebrity publications. This, in turn, appears to have had an adverse impact on the sales of non-celebrity checkout titles, whose unit sales fell a steep 15.9 percent. Among the 68 checkout titles only 6 reported unit sales gains—In Style, Time, Newsweek, Vanity Fair, Vogue and the beleaguered Entertainment Weekly. The newsweeklies, which have struggled for the last few years at the newsstand, were helped in the second half of last year by the intense interest in the Presidential campaign and the Obama-effect (Economist was also one of a handful of titles whose unit sales rose).

The sales decrease was greatest among checkout titles, but nearly all publishing companies suffered sales difficulties. Among the top 50 newsstand companies only three—Newsweek, Economist and Lindy’s—reported unit sales increases. In many instances the sales declines were huge. For example, among the top 10 companies everyone experienced a unit sales decline. Six of the top 10 companies reported declines of more than 20 percent—#2 Bauer 22.9 percent, #4 Hearst 25.5 percent, #5 Wenner 22.4 percent, #7 Source Interlink 22.8 percent, #8 Meredith 21.5 percent and #9 Northern & Shell (OK!) 20.8 percent. The units sales of #3 American Media were off 14.3 percent and #6 Conde Nast reported a 10.0 percent decline. Only #1 Time, Inc. and #10 Rodale came through relatively unscathed with modest declines of 2.4 and 4.5 percent respectively. These results clearly show that size alone does not provide protection against the ravages of a volatile market.

Cavalier cover price increases and harsh economic conditions lead to record sale declines in the 2nd half of 2008. But those declines will look small in comparison to the havoc that is likely to ensue as a result of a partially collapsed newsstand distribution channel.

I reported in January that Source Interlink's Soap Opera Digest declined 31.5% in sales for ad pages in 2008 from 2007.

Things are not looking good for the magazine industry as a whole, especially with the current distributions issues with Source Interlink and Anderson.