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New PPAI chairman is ready to deal with periodical issues
Sunday, April 19, 2009
Irish magazines are determined to sort out their distribution issues and to emerge from the recession with an increased share of the market, according to John Mullins, the new chairman of the Periodical Publishers Association of Ireland (PPAI).

The early months of this year brought a headache for the already under-pressure Irish magazine sector in the shape of a row between retailers and Newspread, the main distributor of papers and magazines.

The dispute, which has since been resolved, meant that some retailers did not take delivery of Irish magazines for several weeks. The problem centred on delivery charge increases introduced by Newspread at the start of the year.

Irish magazines, already battling overwhelming competition from imported titles, needed this scenario ‘‘like a hole in the head’’, according to Mullins.

‘‘We face huge challenges, both on the newsstands and with regard to advertising,” he said.

The PPAI is now negotiating with wholesalers and retail outlets to solve ongoing problems with distribution. Mullins said the aim was to make stocking Irish magazines a more profitable option for shops.

Mullins, whose company, Zahra Publishing, produces the consumer titles Easy Food and Easy Health, said sectoral problems ran deep in this industry.

Only one out of every five magazines sold in Ireland is produced by an Irish publisher, because Ireland’s 50-odd homegrown consumer titles struggle to compete for shelf space with British titles that have the hefty backing of much larger, better-funded distributors.

The recession has compounded the problems, and jobs have been lost and salaries cut across the industry. Mullins said that most magazines, being a relatively a low-cost treat, were still ‘‘generally almost recession-proof’’. Every year, 125 million magazines are bought here, 25 million of which are Irish.

Once problems with distribution and shelf space are sorted out, Mullins believes Irish publications are well placed to gain share at the expense of British titles, whose content is more remote and less relevant than that of magazines produced locally.

He pointed out that many Irish titles, such as Hot Press, Image and Easy Food, were the biggest sellers in their respective categories, despite intense competition from overseas.

He also said that there had been several big launches in recent years, such as monthlies like The Gloss and Michael O’Doherty’s new venture, Stellar.

The only large category in which Irish publishers had failed to compete, he said, was in weekly celebrity magazines, a segment dominated by imports like Heat, Now and Closer. However, this is seen as a declining market, with most of these titles competing very hard on price.

Irish titles do, however, have a distribution problem that relates to the way in which they are sold. Under the current system, retailers must pay wholesalers upfront for magazines they receive. They are later credited for copies they do not sell. Mullins said this created a cashflow issue for retailers and prompted them not to keep magazines on their shelves for long enough to maximise their sales.

In a recent survey by Check out magazine, 45 per cent of retailers said suppliers in the newsstand category were the least supportive category, well ahead of tobacco companies and soft drinks makers, the next biggest offenders.

According to Mullins, the PPAI is determined that this must change and it is taking action to ensure it does. It has developed a programme called Irish First, designed to encourage retailers to give more space to Irish titles.

The PPAI wants a new system to be developed so that retailers are invoiced after distribution only for magazines that they sell. Mullins believes this will improve cashflow and profitability.

He said that new systems were also needed to ensure retailers got the correct number of copies of each magazine, which would avoid wastage.

‘‘We certainly don’t want to flood the market,” he said. ‘‘We want to print what’s required. Fewer sales returns mean reduced waste management costs.”

Publishers have signed up to the initiative, retailers ‘‘love it’’ and wholesalers ‘‘have looked at it tentatively’’, according to Mullins.

In general, individual publishers are working together much better than before, having realised they are not competing with one another.

‘‘But it’s a very big ship and it will take some time to turn it,” Mullins said.

In the mid-term, he thinks it is realistic to expect that Irish magazines should account for about 25 per cent of sales here, up from the current 20 per cent. With regard to advertising revenue, Mullins conceded that times were tough. Last year, magazines took the third-largest chunk of advertising spend, or €236,000 collectively. This year, the total will certainly drop, but it’s unclear how severe the drop will be.

Publishers are concerned that new government restrictions on alcohol, food or motor advertising will make conditions even tougher for them. Discussions about limiting food advertising - due to concerns over obesity- are particularly alarming for publishers like Zahra, which depend upon it for revenue.

‘‘It’s important to remember that, if the government acts here ahead of Europe, it’s only the Irish magazines that will be hurt,” said Mullins.

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