Key Considerations

8 Sep

Some of the questions people have posed in the comments sections are questions members of the Alliance asked before deciding to organize and unify efforts to communicate how this plan could potentially affect our readership, advertisers, business relationships and our publications’ respective viability.

Key things to consider:

1.)  What does this plan do and what purpose does it truly serve? It (potentially) prevents publishers from having a choice about which company should distribute their product and prevents business owners/retailers from having the option to select the publications that are offered at their establishments – those that most closely align with their respective demographics and target audiences.  The outcome of this potential plan far exceeds any possible benefit, particularly when rack maintenance is a hypothetical “problem” and not truly a concern of the retail masses.

2.)  Publishers already include rack maintenance services as part of their respective agreements with retailers. At any time, a retailer can request that a rack/publication be removed for lack of maintenance, but it simply hasn’t been a concern in the marketplace. Is maintenance a real problem, or a problem perpetuated by STLD?

3.)  If STLD is merely providing a solution to a “problem” why is the exclusionary language necessary in their contract? Why is it essential for STLD to control which magazines are permitted in “their” racks? Why not continue to allow the business owners to make that decision themselves? It is after all, their space. Who stands to benefit most from the inclusion of this language in the contract?

4.)  Why isn’t the amount that STLD would charge publications clearly stated in the contract? It could change each month, by large or small amounts at the sole discretion of the distribution company for any number of reasons it deems essential. If a fee is the base of their plan’s revenue model, why not assess the same fee to all the publications it distributes – those that are Lee owned and those that are not?

5.)  STLD isn’t a distribution company.  It’s a division of Lee Enterprises, which is a producer of magazines and newspaper content in STL. It is a competitive entity to publications not owned by Lee. And, it’s unrealistic to think/expect that a competitor would equitably serve the independent publications’ interests in the marketplace. Why would publishers put their free product into the hands of competitors and trust that their product would be given the same attention and care as the products in their competitor’s portfolio?

6.)  Distributors are paid for location drops by publishing companies, many of whom have elected, for one reason or another, not to do business with STLD. Publishers (not distributors) pay for the production of publication racks, which are donated at no cost to business owners as a courtesy for distribution.

7.)  Why didn’t STLD reach out to publishers to proactively instead of pursuing contracts with individual businesses and then claiming the publisher’s participation was key to the success of their program?

8.)  STLD could potentially charge publishers a distribution fee per location drop in addition to a rack placement fee in those businesses that have agreed to their plan. That could significantly increase their potential income from publishers (many of whom have elected not to use their distribution services for a number of other reasons). It would also, in turn, reduce the operating budgets/profit margins of each magazine’s publisher EACH month. Yet, business owners who participate in the plan would only stand to gain $25.00 a month and would lose the right to choose which publications were allowed in their establishment? How is that equitable? Ultimately, it benefits one party most significantly.

9.) Alliance publishers work hard to keep ad rates accessible and equitable for business owners in STL. Why would publishers agree to participate in a program that could increase cost of operation and ultimately lead to an advertising rate increase, particularly when that plan fails to benefit our customer base in any way?

ALLIANCE MOTIVATION:  It is our goal to proactively respond to the STLD plan based on feedback from local business owners who have been approached by their representatives and who believe this tactic is less than ethical and in poor taste.  We (collectively) have a responsibility to communicate the potential affects of this plan to our readership and advertisers – both of which have expectations about our publications’ distribution. We have no evidence, however, that businesses in STL are responding favorably to the proposed plan.

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