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Magazine Wholesalers Deny Going-out-of-business Rumors

A Folio story, which reported that Source Interlink Cos. and Anderson News Co. are going out of the magazine business after publishers refused to pay an extra 7 cents per copy to deliver magazines to resellers, is reported to be false.

Folio reported that a source at Comag Marketing Group, which delivers for Hearst, Conde Nast, Wenner Media and others, said the wholesalers were going out of business as a result of publishers’ refusals to pay the fee. However, Mediaweek writes that the president of Comag, Mike Sullivan, says the wholesalers are remaining in business and that Comag, for one, is still supplying the two wholesalers with its clients’ magazines.

While Comag agreed to continue working with Source and Anderson for now, Time Inc. and Bauer Publishing have refused to pay the fee and have stopped delivering magazines to the wholesalers. Those publishers will likely see single-copy sales suffer as they attempt to line up competing wholesalers.

Source Interlink president Jim Gillis says that publishers are acting in lockstep to force the wholesalers out of business in a bid to increase the publishers’ power over retailers.

One result of the wholesaler/publisher dispute is that magazines like People, Sports Illustrated, Time, In Touch, Life & Style, Star and National Enquirer will not be found on the shelves of Wal-Mart, the largest magazine retailer in the country, according to Fishbowl NY.

It is estimated that the 7 cent fee would cost the publishing industry more than $150 million annually. Source Interlink and Anderson News handle about half of U.S. single-copy magazine sales.