Magazine wholesalers being investigated (still?)

October 23, 2000 - While the concept of a magazine subscription is fairly straight forward, magazines are also sold to wholesalers, who then turn around and sell to retail stores (think the supermarket, bookstore or gas station). Wholesalers are the merchant middlemen. This important link in the distribution of magazines obviously has a great impact on the publishing industry economy.

So when the Justice Department's Antitrust Division, which is tasked with "prohibiting a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power," begins an investigation, it's not in jest. Somebody smells a rat.

Sometimes writers, who are naturally caught up in the editorial content side of things, forget that publishing is by-and-large a business, with many financially-sensitive cogs in the wheel that ultimately deliver your article to the readers.

Earlier this month, the Martin News Agency, a magazine wholesaler in Dallas, was indicted for the "conspiracy to suppress and eliminate competition for the sale and distribution of magazines and other periodicals." And they're not the only ones.

The speculation is that right now, four major wholesalers, distributing 90 percent of all magazines, are being reviewed by the Antitrust Division. Like all supply chains (think magazine, advertiser, wholesaler, retailer and consumer), when you rattle one link, the others are affected to some degree, usually in an economic sense.

Just thought you would like to know.