Peter Kafka

Recent Posts by Peter Kafka

Time Inc. Plays Chicken With Its Delivery Dudes: Check Your Newsstand for Results

The magazine business may go all digital one day, but right now it’s very much an ink-and-paper business. Which makes fights over how the industry distributes its products, and how much it pays to make that happen, a very big deal.

And that’s what’s happening right now between publishers and Source Interlink Distribution and Anderson News Co., two distributors that represent about half the industry’s retail sales. Source and Anderson have been demanding an extra seven cents for each magazine they deliver, citing higher costs. Publishers have balked, citing lower revenues.

Now Time Warner’s (TWX) Time Inc., the industry’s biggest player, has upped the ante, telling Source and Anderson that it’s taking its business elsewhere, starting next month. It delivered the news to Source yesterday; today it told Anderson, which handles most of Wal-Mart’s (WMT) magazines. Here’s the statement from spokeswoman Dawn Bridges:

In view of the new structure that both Source Interlink and Anderson are implementing, as of Feb. 1, Time Inc. will not be providing either group with any our our titles. Our intention is to have the business replaced by other wholesalers. We hope to have specific details to share shortly.”

I’m assuming that 1) Time expects its distributors to back down before it makes good on its threat and 2) it does indeed have a backup plan.

But if Source and Anderson do call Time’s bluff, I’d have to assume that the logistics involved in switching distribution partners are considerable, and pretty hard to execute in a couple days. If you’re a fan of titles like Time, Sports Illustrated and People, and you like to buy your copies at stores or newsstands, you might want to make alternate plans for the near future. Like reading them online.