The international newsstand option

Folio: The Magazine for Magazine Management, Jan, 2001 by Ralph Monti

Publishers are looking overseas as a way to supplement single-copy sales revenue.

Many magazine publishers are rethinking how they distribute magazines and are searching for alternate channels of distribution--as well as new markets to distribute to. In addition to implementing direct-to-retail programs here in the States, publishers are looking overseas as a way to generate more revenue from single-copy sales. If you're considering selling your magazine in Rome, Sydney or Tel Aviv, here are some elements to consider.

Not as "foreign" as you think

The good news is that retailing your magazine overseas is not as daunting as you might expect. There are a handful of foreign distribution companies who will develop an overseas retail program for your company. The main criterion, of course, is that your editorial must be attractive to enough segments of the overseas market to make it worth their while.

Retailing magazines overseas is very similar to retailing here in the U.S. Whether your magazine is placed on a newsstand in Des Moines or in a bookstore in Dusseldorf, it must have perceived reader value. Fortunately, international magazine readers are more predisposed today than ever before to purchasing a foreign magazine--if it strikes their fancy--because of the Internet's effect of globalizing information.

The distribution method of retailing international copies also parallels the U.S. model. When you work with an international distributor, copies of your magazines are shipped to a country's national distributor, who then coordinates distribution with the country's national wholesaler and/or regional wholesalers. The magazines are then shipped to selected retailers around the country.

How U.S.-based publishers get paid for international single-copy sales is similar, too. While readers, retailers and wholesalers in a foreign country all pay one another in their local currency, the remits, credits and bills you receive from your international distributor will all be in U.S. dollars. The last thing you want to do is to get into the currency-exchange business.

But not everything is the same. With few exceptions, overseas local distributors are not as advanced with their database applications as those based here in the U.S. This means waiting longer for sales reports for on-sale and off-sale issues. And don't expect too many subscriptions to be generated from newsstand copies distributed overseas--subscriptions are not a popular choice for many overseas readers.

Additionally, in countries like the United Kingdom and Australia, retail newsstand promotion plays a larger role in selling magazines. Therefore, you should budget promotional monies for special issues that you sense will do well in markets that offer retail promotional programs. And while there are retail chains that own and operate multiple retail sites, for the most part, overseas retail is skewed to independent stores.

It's also important to recognize that selling magazines in the U.S., one of the most affluent and most populous nations, will be different from selling magazines abroad. So it's best to temper grand expectations--especially if you're breaking into the overseas market for the very first time.

Also keep in mind that your magazine will be placed on a newsstand next to local magazines targeting the same customer. The downside, of course, is that you will competing with local publishers who understand the mores of a country better than you do. And because they have lower distribution costs, there's a good chance their cover prices will be substantially lower, too.

What levels the playing field for American publishers is the ongoing fascination--in most markets, not all--for American exports. There's no question that the way we write and design our magazines imbues our tides with a distinctive American imprint.

Because of its language similarities, the U.K. is the most popular export market for most American magazine companies. But the U.K. market is also highly competitive and restrictive.

U.K. market is newsstand-driven

Like the emerging American model, the U.K. newsstand is retailer, not publisher, driven--as is the case in most European countries. There are close to 60,000 retail outlets in the United Kingdom, and of this total only about 5,000 are newsagents--that is, outlets strictly in business to sell periodicals. The balance are stores--supermarkets, auto centers, specialty stores and garden centers.

So is international retail a smart strategy for your titles? Except for perhaps large and certain niche titles, it may be more prudent to look upon international retailing as an ancillary business.

Ralph Monti is president of Bloomfield, New Jersey-based Special Interest Media, Inc.,