INDUSTRY INSIGHTS

MagNet's 1st Half 2014 Newsstand Sales Review

 

MagNet presents our sales trending analyses for the first half of 2014. We removed both Benjamin News and Source Interlink Distribution from our analyses as both wholesalers ceased operations during this time. 

 

There are too many unclaimed returns that skew the actual unit and dollar sales of all magazines. We expect to have a more accurate look at total industry unit and dollar sales in the near future, as we chose not to estimate individual issue sales for titles distributed by those two wholesale companies.

AAM v. NON-AAM TITLES SHARE OF MARKET


 
MagNet analyzed both AAM titles and non-AAM titles.  There are two charts, the first chart represents share of market based upon unit sales and the second chart represents share of market based upon retail sales.


 

The weighted cover price of non-AAM increased 3.5% to $7.02 and AAM audited titles increased 4.0% to $4.10.  This significant price difference is the reason there is parity between groups at retail.  

1st Half Results:  AAM v Non-AAM Titles
Overall, the magazine category sold 281 million units at retail, a decline of 11.2%.  Dollar sales were $1.44 billion, a decline of 7.2%.  Units for AAM titles declined by 12.8%, while revenues declined 9.4%.  Non-AAM titles declined 7.9% in unit sales, but only 4.7% in dollar sales.

 

Category Results:  Share of Market

MagNet tracks 39 magazine categories.  The top nine are represented here, along with an "Other" category representing the remaining 30 categories.  Celebrity and Woman's Service magazines represent a plurality of sales; this is due to the large share of checkout space devoted to these titles. 

 

After the top two categories, share is distributed evenly, with the next fifteen categories representing between 2% - 7% of all sales.

 


1st Half Results:  Category Results

The chart below shows unit sales and dollar sales variance by category.  Of the 39 categories MagNet tracks, eight categories show gains in either units, dollars, or both.  Seven of these categories are not rated in the top 10.  Please contact MagNet for a full listing.


 

 

Celebrity Price Increase Results
At the end of the first quarter, three celebrity titles increased the price of its brands, while two titles remained at the same price.  The chart below provides summary results from the first 13 issues after the price increase and comparative results from the two titles that did not increase price.

 

While the price increase slowed revenue declines (or in one instance, improved revenues), unit sale losses were in line or slightly better than the two titles which did not increase price.  MagNet does not see any immediate adverse effect from the price increase, however as unit sales continue their steep decline, there should be questions as to how much space these titles receive at checkout. 

A New Contender at Checkout:  Bookazines
Bookazines have become an important part of total newsstand sales.  Our analysis provides a little background on this category.  While one in twelve magazine units sold are Bookazines, more than one in eight retail dollars are provided by Bookazine sales. 


 

Retailers and wholesalers support Bookazines because of the higher cover prices and focused content that each new release represents. The Bookazine business model works for publishers, even without advertising support, because in many cases the content is re-purposed. 

 

1st Half Results:  AAM v Non-AAM Titles (Bookazines Added)
MagNet added Bookazine variance results to the AAM v. non-AAM titles for comparison:


    

Bookazine sales results match overall industry averages.  Bookazines also outperform the AAM audited titles. 

Summary
AAM titles are declining at a much faster than industry averages while non-AAM titles and Bookazine sales have held up a bit better.  

 

Also of note, celebrity titles that increased cover price lost significant unit sales but either increased revenues or saw its revenue decline at a much slower rate.  Of further note, celebrity titles that did not raise its price saw similar unit sales losses, suggesting the price increase was moderately successful.

 

MagNet will provide a similar report on the 15th of every month.  Please contact Gil Brechtel at gbrectel@magnetdata.net, Josh Gary at jgary@magnetdata.net, or Luke Magerko at lmagerko@magnetdata.net with any questions or comments.