2013 Newsstand Sales Results Updated
The final newsstand sales numbers for 2013 are slightly better than what we estimated a few weeks ago, with sales finalizing about $6 million higher, and the percent of decline improving slightly to 9%, compared to 2012 results. MagNet reports sales based on off-sale dates for titles and issues. So all titles and issues off-sale throughout 2013 are included in these numbers.
As stated in our previous newsletter, there are many factors that have contributed to the continual sales decline over the last six years. The newsstand magazine business is still a viable $3.1 billion dollar business, and we sell over 12 million copies per week to consumers. But, over the last several months, we have seen signs that the continual sales decline has impacted the financial viability of all wholesalers, with three companies closing their doors and another attempting to restructure to remain in business.
Because we are owned by the U.S. wholesalers, and have nearly sixty publisher and national distributor clients, MagNet is closely linked to the current and future success of the newsstand business. It is our opinion that a structural realignment of the newsstand business and economic models must be considered by the major wholesalers and suppliers in order to keep the current delivery system sustainable. If not addressed in a timely manner, we believe that many publishers will lose their ability to distribute their titles to traditional retail locations and the number of stores carrying magazines will significantly decline. All of which will exacerbate the newsstand sales situation.
As you will see in the details below, there are some positive trends in the numbers. It is important to realize that while overall sales numbers are down, several titles, publishers and COTs are outperforming the market averages. The newsstand business will continue to be viable if we make the structural changes required to keep it that way.
US & CDN COMPARISON 2013 VS 2012
Historically, Canadian newsstand sales have performed better than in the U.S. over the last several years, as the economy in that country was not nearly as affected as the U.S. economy when the Great Recession started in 2007. In 2012, Canadian sales were down about 6.5% compared to the U.S. sales decline of 9.4%. In the second half of 2013, Canadian newsstand sales declined more than U.S. sales, with Canadian dollar sales down about 10.5%, while U.S. dollar sales were down about 9%. Dollar sales in both countries for all of 2013 were down about 9% compared to 2012. Sales efficiencies continued to weaken with only about 30% of copies distributed being sold.
WEEKLY AND NON-WEEKLY COMPARISON 2013 VS 2012
In the second half of 2012, MagNet reported that the sales decline on non-weekly titles appeared to be reaching the bottom, as sales were actually flat to slightly down in that period, compared to 2011. Unfortunately, the decline of the non-weekly titles sales accelerated during 2013, one of the major disappointments from our perspective. While the weekly title sales fall is driven by many factors, we felt that the slowing of the sales decline in the second half of 2012 on the non-weekly titles was a sign that, at least that portion of the business, was turning around.
TOP 1,000 TITLE RANK COMPARISON 2013 VS 2012
As has been the case for the last five years, the overall sales decline is mainly driven by the top 50 titles and those titles ranked below 1,000 in sales. The top fifty titles were down 10.6% in dollars compared to last year's numbers. The problem is that the top 50 titles represented 41.6% of the total business in 2013. Those titles ranked below 1,000 in sales were down 21% compared to 2012 results. Sales on titles ranked between 51 and 100 were down only about 1%. Those titles ranked from 51 through 200 were down less than 4%. Titles ranked from 51 through 1000 in sales were down about 4.8% in 2013.
NATIONAL DISTRIBUTOR RANK 2013 VS 2012
The National Distributor ranking and sales performance chart was compiled to include titles being billed by each national distributor at the end of 2013.
MARKETING GROUP 2013 VS 2012 RANK
This Marketing Group ranking and sales performance chart was compiled to include titles being marketed by the National Distributors at the end of 2013.
PUBLISHER RANK 2013 VS 2012
The three smallest publishers ranked in the top ten, Penny Press, Harris Publications and Source Interlink Media all outperformed the market. Some major publishers who aggressively promoted low price subscription offers saw their newsstand sales affected dramatically. Bauer, AMI and Time, Inc. sales were all impacted by the continual decline in celebrity title sales.
CATEGORY RANK 2013 VS 2012
Several subject categories in the top ten outperformed the general market trends, led by the Home, Crosswords and Sports categories.
The top ten chains in 2013 represented 48% of total sales, compared to a collective market share of 47.4% in 2012. The top ten chains in alphabetical order are B&N, CVS, Hudson News Terminals, Kroger Co., Publix Supermarkets, Safeway Inc., Target Corp., Wal-Mart Canada, Wal-Mart U.S., and Walgreens.
CLASS OF TRADE RANK 2013 VS 2012
Discount stores and club stores continued to perform well in 2013, increasing their percentage of total market. Club stores increased from a 2.5% market share percentage in 2012 to 2.8% in 2013, while discount stores represented 2.3% of the market in 2013 compared to only 1.7% in 2012.