Gamertell

The magazine industry is notoriously tough to keep a publication afloat in, as evidenced by the end of Electronic Gaming Monthly. Magazines able to stay in print will have face another economic issue as two major distributors begin raising rates.

Folio reports that the distributor responsible for 20 percent of mass market magazine distribution has announced a 7 cents-per-copy increase on all copies distributed. In addition, Anderson wants publishers to pay for the inventory cost attached to scan based trading. The greeting card industry has already begun passing that cost on to manufacturers.

Citing flagging ad sales, Anderson News CEO Charlie Anderson said the magazine distribution business is not profitable and hasn’t been for a long time. He said short of the steps Anderson News is now taking, “there will be an implosion in the business.”

Anderson gave publishers until February 1,  2009, to accept the new terms and said magazines that don’t will get dropped from distribution. The company wields a lot of power through relationships with retailers including Wal-Mart, Walgreens and CVS. Magazine publishers are now looking for alternatives to Anderson News.

One of the alternatives will not be distributor Source Interlink, who is now seeking a 7-cents-per-copy rate hike too. Between the two of them, Anderson News and Source Interlink are believed to control more than 50 percent of mass-market magazine distribution.  Magazines are already dealing with an 11-percent decline in ad pages in 2008.

Gaming magazines are possible the most in danger. The gaming community is a tech-savvy, fact-hungry force the magazine industry has had problems reckoning with. Blogs and technology sites are breaking news and pulling advertising away from a publishing model that typically only releases a product monthly. The current distributor crisis shows even the magazine industry’s heavyweights have no easy answers.

Read [Folio] Also Read [Knoxville News Sentinel]