Q: Why is the US such an important market for UK publishers?
A:The US market is important for UK publishers for two reasons.
First is that it is the most valuable export market for UK press. Import distribution in the US is dominated by the Barnes & Noble bookstore chain. Barnes & Noble provides the perfect environment for import press with the largest range of titles on sale in the US at over 4,500 titles listed, presented in an easily browsable fashion. UK titles provide valuable breadth and depth of range for a bookstore consumer seeking inspiration from differentiated, quality content. This type of environment doesn’t exist in the UK market and provides a real point of difference for magazines in the US.
Second is the scale that the US market can offer outside of the bookstore environment for content that has more mass appeal. Bookstores represent 8% of the >$1.2bn annual US newsstand RSV, which leaves plenty of opportunity outside of this channel. For publishers that have content that appeals to grocery consumers, there is the potential to build sizable distribution that would rival decent UK supermarket listings. This strategy is not without downsides and very careful consideration and planning is required to deliver a successful large-scale strategy. However, when it works, it can be very valuable to a publisher.
Q: How has the US publishing and distribution sector changed in recent times?
A:Over recent years, the only constant in the US market has been change. The landscape now is dramatically different to that of four years ago.
M&A activity has driven the majority of these changes across both publishing and distribution. As many UK publishers will be aware, household publishing names such as Time Inc, Bauer, Meredith and AMI have all been involved in M&A changes with new nameplates such as Dot-Dash Meredith and A360 Media taking their place. In the distribution sector, the Accelerate 360 group (owners of A360 Media publishing) have ramped up their share in the US wholesale market now controlling >85% of the total market.
Despite the huge churn in corporate ownership, US publishers have not stood still. With the rate of decline of the print advertising dollar increasing, the traditional US publisher approach to the newsstand as being an ad promotional vehicle has dramatically changed. Frequency of big hitting brands such as People, Entertainment Weekly, Elle and Cosmopolitan have all been reduced. This has freed up space at grocery checkouts, which has been readily filled with bookazine products – most notably by Dot-Dash and A360 Media.
The surge in bookazine sales in the past three years has been the major trend on the US newsstand. Bookazines represent 37% share of revenue, worth just shy of $500m per annum. Anyone visiting the US newsstand will be met with a wall of one-off products alongside the occasional iconic magazine masthead.
Q: What is working in the US market right now and what isn't?
A:Bookazines as a format are very strong. However, not all bookazines are born equal. Pop culture content, and in particular fandoms are a core source of sales. If 2021 and 2022 were all about Harry Styles, then 2023 is the year of Taylor Swift. The ability for print publishers to tap into wider cultural and media driven events is a great example of how print media retains its vibrancy and relevance with an audience many would have considered to not be buying into the newsstand anymore. On a recent visit to the US this July, this relationship was suitably illustrated by the multitude of Barbie products on sale in the run up to the film’s release. Specials from US Weekly and People were recording record sales and the summer issue of Vogue featuring an electric pink clad Margot Robbie was a sell-out.
These are extreme examples, but using the bookazine format to connect consumers with content they are passionate about (celebrity culture or otherwise) continues to deliver success.
At the other end of the spectrum, the regular frequency brands that dominated newsstands only five years ago are having the hardest time now. Household names such as US Weekly, Better Homes & Gardens, In Touch, HGTV, Real Simple all suffering large newsstand declines. The recent announcement that National Geographic is to leave the US newsstand at the end of the year is another major blow to the sector.
It is not all doom and gloom for traditional magazines though; People remains a powerhouse on the newsstand and iconic brands such as The New Yorker, Economist, Vanity Fair, Oprah and a plethora of puzzle titles have all recently posted year-on-year RSV growth.
Q: What are the challenges UK publishers face exporting to the US and how do they overcome them?
A:The biggest challenge for UK publishers exporting to the US is the cost to serve the market. At a base level, the US market is notoriously inefficient, well below the efficiencies of the UK market. With the rise in print and paper costs experienced in the UK this year, margins on the US newsstand are under increased pressure.
In the face of these costs and efficiencies, publishers have two levers to protect their margins – supply reduction and price increases. US publishers have been aggressive on price recently, with RSV year-on-year performance a full 7.5% ahead of unit performance. This gives import publisher some room to manoeuvre given consumers of import press are used to a price differential between UK press and domestic products. The US economy is also in more robust shape than the UK which has a beneficial impact on consumer confidence which helps acceptance of moderate price inflation. However, publishers must ensure that their products still represent good value for money through ensuring production values and editorial pagination continue to outpace their American cousins.
Close supply management and efficiency work is the other key tool; one which has been notoriously difficult to crack in recent years. Imports, by nature, operate at higher sales volatilities which puts pressure on efficiencies. Bookstores are the most efficient retailers in the US, with actively engaged buying teams. Publishers should check that their distributor is working closely with retailers and supplying wholesalers to review allocations and strip out excess copies to optimise efficiencies. Simple tactics such as varying supply levels according to content can also have a dramatic impact on efficiency, so don’t overlook the basics.
Q: What should publishers consider when exporting to the US?
A:Publishers should do their homework. Their distributor can help them do this. The scale of the market can often blind people to the realities of trading on the US newsstand. Set realistic expectations of both revenues and efficiencies and be sure that your P&L will work when factoring in the prevailing market costs and unsold levels.
If a publisher is interested in expanding distribution outside of the traditional bookstore environment – proceed with caution. A slow and steady build will yield a far more sustainable result that will deliver long term revenue benefits. There is enough scale in the US market to afford to be picky about where you are distributed – so be picky and choose the best outlets to target your core consumer.
Q: What are the main content trends that are driving the US newsstand?
A:Health and wellness, celebrity fandoms, events-based content and sports are all popping on the newsstand now.
Health and wellness has been trending positively for some time now, but moving forward, more specialised content is likely to continue to find success addressing specific health and wellness issues such as Anxiety and ADHD.
Taylor Swift and Harry Styles have been well covered – but who are the next big stars to take off? Will BTS make a comeback? Is the smart money on Pedro Pascal?
Events continue to drive people to the newsstand as we have seen with various royal news stories in the past year. Looking ahead for big events – anniversaries, concert tours – and scheduling content accordingly to hit the US market in time can drive great uplifts.
Sports has shown a clear resurgence recently – driven particularly by NFL content and fantasy football.
Q: What’s in the pipeline from Marketforce?
A:Our focus right now at Marketforce regarding the US market is firmly on working with our clients to develop, refine and implement their 2024 North American distribution strategies. We are working closely with our retail, wholesale and US publisher partners to deliver the best market intelligence possible to shape successful strategies, unlock new distribution opportunities and ensuring that we optimise our existing distribution for maximum returns. The US is always an exciting market to work with – I’m looking forward to seeing what the next twelve months will bring.
With more than 30 years of experience, Marketforce leads the way in global sales, marketing and distribution for a wide range of publishing and media businesses. Owned by Future PLC, we are backed by one of Europe’s largest and fastest-growing media companies.
We are the #1 independent publisher newsstand distributor. Distribution is our core service, but our focus is also on helping publishers build their businesses through adding value. We aid product development, help determine optimal pricing and deliver customer marketing for brands that grows sales. If you would like to hear why more publishers are choosing Marketforce, call us for a chat about getting the distribution you need.
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