2k in trouble? ... f*ck!

[Tu-plang]

From this week's Lying in the Gutters...

British newstand comics are about to get a next knife in the kidneys. Currently, the big player in British comics is "Viz Comic," a successful adult comedy anthology that sells around 150,000. Below that, Marvel UK/Panini reprint a number of Marvel and DC titles, there are children's comedy anthologies and there is "2000AD" and "Judge Dredd" from Rebellion.

Moves in the UK by the Office Of Fair Trading to break up monopolies in the magazine distribution business have been known for a short while, and after Dez Skinn talked about them at the Bristol Comics Festival, the comics industry woke up a little.

The Periodical Publishers Association has this week sent a report to the Office Of Fair Trading, showing how this could cripple the ability of publishers to launch new titles and keep other titles functioning, if economies of scale were stripped away. Currently, magazines and newspapers are distributed on a regional basis through exclusive contracts with major names including WH Smith and John Menzies.

Smaller wholesalers have complained of an effective anti-competitive environment. And the Department of Trade and Industry plans to abolish the law that allows distributors to enjoy exclusive rights over certain territories from next May.

However this is likely to increase supply costs, reducing the amount of retailers by tens of thousands, and squeezing the profit margins on publications already feeling the pinch, losing a thousand titles, a third of the entire consumer magazine market, following the US pattern.

It's is very conceivable in these circumstances, the British market may just effectively lose 2000AD, entirely.

Well?  Are we to worry, or is it scaremongering bollocks?

Link: http://www.comicbookresources.com/columns/index.cgi?column=litg" target="_blank">Lying in the Gutters

[Tweak72]

F*ck

[Wils]

I was worried for a second there, until I read this part.

From this week's Lying in the Gutters...

[Richmond Clements]

Sounds like shite to me.
Maybe I'm reading it wrong, but if this law works as stated, then surely the same would have to apply to things like CDs and novels? I couldn't see Sony give up the rights to distribute their own product somehow.

[The Enigmatic Dr X]

I thought this law applied only to newspapers, but it may apply to all magazines.

In the UK, newspapers are distributed by a number of EC sanctioned regional distrubutors who hold a "monopoly" for the wholesale of newspapers in their territory. The printers of newspapers ONLY sell their product to these distributors, who in turn sell on to national chains (eg WH Smith) and sub-distributors (who then, in turn, supply corner shops and small chains).

John Menzies is a big player in this market, to the extent that it shut is shops to concentrate on it. It holds a number of regional distributorships, including all of Scotland and (I think) the Tyne area.

This would normally contravene competition law (as it is not normally in the consumer's interest to have single distributors of a product in a terrirtory), but a specific exemption was made in recognition of paper industry arguments that this distribution arrangment was the only way they could ensure papers got out every day; otherwise they would have been forced to sell a few papers to small shops and thousands to large chains, and the admin in doing this was such that (they argued - don't shoot the messanger) their distribution could not have been guaranteed.

This exemption is due to exprire/ come up for renewal next year. I expect, without checking, that this message refers to the start of a standard consultation process where views are requested regarding whether or not the exemption is still appropriate.

If previous form for this sort of thing is anything to follow then there is nothing to be alarmed about as status quo is almost certain to prevail, what with apathy and the fact that the arrangement favours big business (Fleet Street) over small business (yer local corner shop).

[Generally Contrary]

I think this may be a little overblown.  As long as the PPA present a strong argument, concentrating on the way (that they believe) that this proposed break-up of the distribution monopoly would actually lead to the development of a retail monopoly directly affecting consumers, then I'd hope that they'd have a good chance of winning the debate at consulatation level.

Of course, as I don't understand the nuances of the periodical distribution market, it might be that their argument doesn't hold water.  Or it might be that the OFT, effectively forced to choose a level of monopoly, choose to dissolve the one that results from an effective cartel rather than the one that is expected to result from market dynamics.  Unfortunately, and the newspapers must take some (hell, a lot of the) blame for this, we have a Thatcherite economic philosophy that sees a 'regulated' monopoly as bad while a 'market-generated' monopoly as a irresitable force of natural law.    

[Bad Andy]

There was also something in this month's When Saturday Comes about WH Smith changing its sourcing policy and only selling mags from the major suppliers - meaning WSC will no longer be on the WHSmith stands.

Could this apply to 2000AD as well? Although I doubt my local WHSmith sells many as it puts both 2000ad and the meg in the same section as the Beano.

[Generally Contrary]

The distribution of smaller titles is one of the reasons why this change to the regulation of the market is being considered.  An analogue would be the distribution of alcohol in pubs.  If a pub has to sign an across the board exclusive deal with a single supplier, how are smaller breweries and distilleries able to get a foothold in the marketplace?

[GordonR]

Ditto.

If Rich Johnson had a brain, he might be half dangerous.

[Quirkafleeg]

What happend to the rumour that Smiths were gonna drop a load of magazine titles below a certain number threshold of sales...?

WAsnt it becuase Smiths was losing money as it could not work out if it was a newsagent, stationary shop, book shop or video/dvd/cd shop and was gonna concentrate on its core business (whatever that is)

[Moose]

John Menzies is a big player in this market, to the extent that it shut is shops to concentrate on it. It holds a number of regional distributorships, including all of Scotland and (I think) the Tyne area.

not sure about this. menzies closed it's shops because they were bought out lock stock by wh smith, who closed them all where the town already had a smiths branch, or converted them into smiths branches where there wasn't one. with smiths sailing very close to the wind at the moment, they may have sold on the distrubutors, but as one of their only companies that make them any money i doubt it.

when smiths is flogged off next year i expect we'll find out. anyway, as far as distribution competition goes, surely smiths has that monopoly as they own the distributors who supply their shops.

[paulvonscott]

If Smiths wants to reduce the number of titles it sells, then people will just go elsewhere.

At Bristol, when Dez made his speech, it sounded scary, but unless you know the actual realities behind it all, there's no point panicking, though obviously, you'd expect Rebellion to be keeping an eye on the situation.  Whatever it is, I'm a bit lost off now.

[opaque]

Talking about WH Smith in general I'd say they are in serious trouble. Thing is I don't know what would happen if they were bought up, loads of big stores in every town would be an asset strippers delight but the business is so messed up.

[Moose]

my wife has just survived the cull at head office, although we both wish she'd got the redundancy deal......serious money!!

smiths are being 'streamlined' (i.e. asset stripped) for a sale next year.

glorified newsagent or overpriced stationers? they don't know themselves anymore.....tesco and asda are killing them, as is amazon. why pay smiths prices when you can get it cheaper anywhere else? i get 25% discount and still shop elsewhere.

trouble is that cd/dvd sales have next to no mark up, so profits are very small. smiths get round this by overcharging on everything else they sell...

[Bart Oliver]

After reading Moose's post I'd say the British market may just effectively lose WHS entirely sooner than 2k.

Can't find 2k in a Smiths, can always find it in a Borders (or the local FP for that matter) and visa versa.

If the availability of 2k becomes a real concern there's always subs.

As for Rich Johnson's alarmist article- just remember that he needs to fill his column inches with *something* that resembles news each week.


B.