Wednesday, January 23, 2008

Wal-Mart's purges magazines Wal-Mart recently announced that it is pulling some 1,000 magazines of its shelves. Among the titles getting dropped are The New Yorker, BusinessWeek, Fortune, Forbes, Better Homes and Gardens, and Ladies Home Journal. Of course, a large number of more obscure magazines, such as Log Cabin Living, were dropped as well. The reason, quite clearly, is that Wal-Mart believes it can make more money per shelf finch by selling just the most popular titles. Indeed, the 1,000 magazines in question made up only some 2% of Wal-Mart's magazine sales. Big deal, right? Who expects Wal-Mart customers to read movie reviews in the New Yorker or corporate profiles in BusinessWeek. Well, the magazine industry gets between 17% and 20% of its magazine sales from Wal-Mart, so this is a big deal. Big box retailers like Target and Wal-Mart now occupy a central place in the magazine industry, and when they move, fortunes are lost (and won). And some companies, especially Meredith Corp., publisher of Better Homes and Gardens and Ladies Home Journal, it might be a major blow. As pointed out in an article online at Silicon Alley Insider ("Wal-Mart Gives the New Yorker (And Forbes, Fortune, BizWeek etc) The Boot"), 1/21/08), other media industries may feel the pinch soon. "It is also a prelude to what's about to happen to the music business, as Wal-Mart and the other big box retailers start to hack away at the retail space they devote to music. And it may also happen to Hollywood, which depends on the big boxes for DVD sales." Media companies like others are more and more subject to a very few middlemen that can determine their success and failure. There's no room for minority tastes on these precious shelves,a and magazine publisher, like so many other industries, have to please Wal-Mart buyers. 5:18:12 PM

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