Magazines' Newsstand Slide Smaller in Canada

But That May Be Good News for U.S. Publishers

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Magazines have long blamed their continuing newsstand declines on everything from gas prices to store layouts -- everything but demand for magazines themselves.

But there's something interesting happening over the border to the north: Newsstand sales aren't falling anywhere near as much.

When U.S. magazines plunge at newsstands, Canadian magazines only dip.
When U.S. magazines plunge at newsstands, Canadian magazines only dip.

While U.S. magazines' newsstand sales were down 10% in second half-2011 year-over-year, for example, Canadian titles slipped 2.4% at newsstands, according to publishers' reports with the Audit Bureau of Circulations.

Smaller declines for Canada have been the newsstand norm in recent years -- except in the second half of 2010, when U.S. magazines fell 7.3% year-over-year, while their Canadian peers grew 6.1%. U.S. magazines haven't turned in a year-over-year newsstand increase for at least a decade, according to the Audit Bureau of Circulations.

If all of this seems like just another frustration for U.S. publishers, it isn't. Several of the reasons that Canadian newsstands are doing better support U.S. publishers' argument that long-term reader demand is only part of the problem. Some of the other problems are temporary, unrelated to magazines, or both.

Canadians, for one thing, are enjoying a healthier economy. "We are in a bit of a recession, but not like in the States," said Chris Purcell, VP-marketing consumer solutions at TC Media, which publishes titles including Canadian Living, Style at Home and Elle Canada. "There's no housing collapse. Unemployment is higher than normal, but nothing like the U.S."

A stronger real-estate market means that magazines about the home are faring better. And a somewhat stronger economy in general may well be letting consumers continue more of their impulse buys -- such as magazines on the newsstand.

Canadian newsstands also aren't as crowded as they are in the U.S. Some publishers have blamed a portion of U.S. declines on newsstand clutter, saying it's too hard for each magazine to stand out. In Canada, titles have more room to breathe. "From my perspective it's a much stronger media market because you don't have the fragmentation," Mr. Purcell said.

And Canadian magazines seem to be getting more support from retailers. Some big chains in the U.S. have been moving magazine racks further back in stores and turning over checkout-aisle real estate to snacks and gum.

"There are some chains cutting back on space in Canada, but at the same time you have other chains promoting magazines," said Gil Brechtel, president-CEO of Magazine Information Network, or MagNet, which tracks magazine sales. "Chains like Walmart Stores and Costco are doing very well in magazine sales because they are promoting them."

Some benefits to Canadian magazine sales, of course, are particularly rooted in Canada. The country has a closer relationship to Britain, for example, and therefore showed even more appetite for last year's royal wedding -- a big event for magazine sales.

"Overall the major Canadian publishers had a very good year," said Mr. Brechtel. "A lot of that was driven by royal wedding coverage. While it was big in the U.S., it was huge in Canada."

Competition from the web also means publishers in both countries are going to struggle to return to newsstand growth. Most U.S. publishers would be happy to find a "new normal" for single-copy sales.

But the apparent benefit of a healthier economy in Canada still looms large for industry players in the U.S., who hope the grudging recovery here may eventually take some pressure off their newsstand sales.

"I think it is all economy," said Ian Scott, president of Bauer Media Group, the publisher of titles such as In Touch and Woman's World. The company's newsstand sales are holding up better in Canada.

"Let's hope that 2012 is the year we start to see some better economic news in the U.S.," Mr. Scott said. "So far, so good."

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