INDUSTRY INSIGHTS

1ST HALF 2016 VS 2015 NEWSSTAND SALES OVERVIEW

Sales in the second quarter of 2016 declined in dollars by 6.1%,  consistent with the dollar sales drop in the previous two quarters, 4th of 2015, and 1st, 2016, where the dollar sales falloff was 6.3% combined. Dollar sales declined in the first half of this year by 6.2%. While these numbers are certainly better than what the industry experienced in some previous years, it is disappointing that the unit sales continued to decline at a double digit rate. It is only the higher average cover price per unit sold, now at $5.55 in the 1st 1/2 of 2016, that helped to mitigate the dollar sales loss. The average cover price per unit sold was $5.28 same period last year.
It is MagNet's opinion that due to the continual sales decline of the weekly celebrity title category, as well as the women's category, where many publishers who operate in that space have landed on a business strategy that includes providing cheap subscription prices to consumers to prop up their rate bases, we will never again see overall sales numbers on the newsstand grow in units or dollars.   
However, the aggregated numbers that we provide to our readers each quarter that illustrate the overall health of the newsstand business, do not tell the whole story. Many titles are doing quite well on the newsstand. In fact, in the first ½ of 2016, there were 136 titles that released at least four issues this year, and the same number of releases last year, that grew both their unit and dollar sales. Collectively, their sales were up 8.7% in units and 11.5% in dollars. That's comparing same number of issues in both periods. We listed some of those titles in one of our charts below. The other good news is that there are many other titles, including specials, that had less than four releases or an inconsistent number of issues in both periods that also showed good growth in units and dollars. Also, the adult coloring book category continued to produce excellent sales in the first ½ of this year. In addition, as indicated in our category chart below, the titles in seven categories, which represented about 1/3 of the sales in the first ½, 2016, collectively grew their units by about 3% and their dollars sales by about 10%.
Wholesalers distribute all titles, so their business and financial situation is certainly impacted by the continual drop in unit and dollar sales. Their cost per copy handled continues to increase. But, it is important to note that for many publishers, their newsstand business is doing just fine, and it is still an important part of their overall business strategy and bottom line profits.
US & CDN COMPARISON Q2 AND 1ST HALF 2016 VS 2015


The average cover price per unit sold has increased by 7.7% from the first half of 2014 to the first ½ of 2016. The average cover price for a unit sold in the first ½ of 2014 was $5.15. Now it is $5.55. The average increase is due to a change in the mix of titles that consumers are purchasing...fewer lower cover priced celebrity and tabloid titles and more higher priced specials.
US & CDN TITLE RANK 1ST HALF 2016 VS 2015


While the titles in the top 50 had a sales decline in units of 10.5% and in dollars, 8% in the first half of 2016, titles ranked between 51 and 100 had a slight increase in unit sales and a 13.4% increase in dollar sales, indicating that many high volume  titles performed well on the newsstand in the first half of the year. Title #100 in sales rank had over $1,700,000 in sales in the first half. Titles ranked between 101 and 1,000 had a sales drop of 7.3% in units, but dollar sales were up slightly. Sales on titles ranked below 1,000, continued to be less relevant, and represented less than 5% of the total business. There were about 4,500 titles that sold copies on the newsstand during the first ½ of 2016, with sales being determined based on issue off-sale dates.
NATIONAL DISTRIBUTOR COMPARISON 1ST HALF 2016 VS 2015


These numbers are based on which national distributor is currently billing titles to the wholesalers. Coast to Coast increased their market share by a full point compared to last year, mainly due to Topix Media, one of their major clients, having significant growth in the first half, 2016.
PUBLISHER COMPARISON 1ST HALF 2016 VS 2015

Even though Harris Publications exited the business in the second quarter, 2016, they still ranked in the top ten publishers. Kappa broke the Top 20 in 2016.
CATEGORY COMPARISON 1ST HALF 2016 VS 2015

As we commented in the overview, titles in the Food/Wine, General Interest, Game/Puzzle/Crossword, Entertainment, Recreation, Lifestyle and Science categories, collectively had an increase in unit sales of 3% and an increase in dollar sales of 10%. Titles in the Celebrity and Women's categories generated 36.4% of newsstand sales in the first half, but dropped 14.3% in units and nearly 12% in dollars compared to same period in 2015. They represented 39.5% of the business in the first half of last year. Celebrity titles produced 23.6% of total sales this year, and 24.9% last year.
TOP CHAINS COMPARISON 1ST HALF 2016 VS 2015

Chains in the top ten are Albertsons/Safeway, Barnes & Noble, CVS, Hudson Retail, Kroger, Loblaws, Publix, Target, Walgreen and Wal-Mart. The top ten chains this year increased their market share from 55.8% last year to 56.6% in 2016.
CLASS OF TRADE COMPARISON 1ST HALF 2016 VS 2015

The drug, convenience store and traditional newsstand COTs continued to decline in the first ½ of 2016. Some drugstore chains reduced space, several convenience stores exited the business, and the number of traditional newsstands declined. 
1ST HALF 2016 VS 2015 TITLES SHOWING GROWTH

Here is a sample of the 136 titles that increased their business in the first half of this year compared to last. Same number of releases in both periods. Titles in almost every category had sales increases in the first half.
All sales are based on issues off-sale in the period described. All data expressed in millions. All data is based on actual wholesale O&R records and reflect all returns processed through 08/15/2016. Any questions or additional information requests should be submitted to businessinsights@magnetdata.net.