The move was far from unexpected. Industry observers have predicted that Anderson, along with Source Interlink Cos., would be forced to shut down after leading newsstand publishers Time Inc., Bauer Publishing and American Media Inc. refused to meet the wholesalers’ demands back in January for an extra 7 cents per copy to deliver their magazines to the nation’s retailers.The disagreement has left magazine publishers scrambling to identify alternative distributors (Anderson and Source represent about 50% of the market) but also to placate advertisers who will be closely watching the amount of lost newsstand sales if titles are not on store shelves when promised (or at all). If rate bases are not met a publisher will be obliged to rebate some amount of the advertising paid by advertisers. In this environment where titles are already perilously thin this is the last thing any publisher will want to contemplate. The SI swim suit issue comes out Feb 1oth which represents big money for Time and they will want to have this situation solved quickly.
The debacle has wreaked havoc on the nation’s newsstand sales, as Time Inc. and co. are expected to see a short-term loss of sale as a result of their wholesaler change.
The latest move by Anderson raises new questions for Comag Marketing Group, which represents Hearst Magazines, Condé Nast and Wenner Media titles. As of the week of Feb. 2, Comag was still relying on Anderson and Source to deliver their magazines.
There is also the situation with mass market book titles which have had little mention in this disagreement. Without the carry over from the magazine scale, it is doubtful Anderson would continue with books by themselves.
Earlier in the week WalMart indicated many of their customers would have to do without People Magazine (whatever will they do?). (NYPost - with cheesy picture of Ron Burkle)
Early in the week, Source Interlink denied it would exit the business. MediaWeek
Wal-Mart, the single-biggest magazine retailer in the country, will be without copies of People, Sports Illustrated and Time. They will also not have Bauer Publications' In Touch and Life & Style, and American Media-owned Star and National Enquirer.
While it's too early to know how many of Wal-Mart's 4,200 US stores will be affected, it appears a majority of them will be.
A Wal-Mart spokeswoman confirmed that some stores are expected to be without magazines this week, but did not offer specifics on the titles or how many stores will be affected.