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But The Clarion-Ledger is touting benefits of new distribution network

Independent publishers see threat in TDN plan

Jackson — A distribution plan proposed by The Clarion-Ledger has independent publications around the metro area wondering if they may be losing their independence. To a variety of merchants around town, the Gannett publication’s proposal sounds swell.

The Clarion-Ledger’s new service, The Distribution Network of Central Mississippi (TDN), offers area merchants an organized, multi-pocketed box to place in front of their stores to eliminate the clutter of individual racks lining the sidewalks of gas stations, grocery stores and retailers in the metro Jackson area. The merchants, who have been told that independent publishers favor the idea of paying at least $8 per month per box to be included in the new program, have been willing to sign a one-year exclusive distribution contract with The Clarion-Ledger.

What’s not to like? Plenty, say independent publishers.

Worries abound

“It’s taxing the competition,” said Jackson Free Press publisher Todd Stauffer. “It’s protection money … adding 10% to 20% of what it costs to publish every year.”

Chris Blake, manager of Blake Publishing, which produces the Gary Smith Real Estate Magazine and Showcase of Homes, said he’s not surprised by Gannett’s move. “The Clarion-Ledger has been trying to push everybody out for a long time now,” he said. “I’m upset by the way they did this whole thing. It was poorly planned, poorly executed and unorganized. They’ve been very misleading in presenting this. They’ve tried to play both sides of the table.”

Jimmy Kitchens of Homes and Land Magazine said the new arrangement would cost $50,000 or $60,000 per year for continued distribution at the publication’s 250 locations. “And they’re telling us this is just the tip of the iceberg,” he said. “They’re going to go into all kinds of indoor locations, also.”

Gretchen Cook, publisher of Parents & Kids Magazine, calculated the TDN arrangement would cost her an extra $27,000 per year. “When they called, I was speechless,” she said. “Literally, I almost hung up on the guy because I couldn’t believe what he was telling me. We would have to pass on the cost or go out of business.”

Angie Cone, who handles sales and marketing for The Real Estate Book, said the move would also greatly impact branding.

“I’m worried about my boxes at their locations (because) I don’t want someone dropping by and not seeing my book,” she said. “If they don’t see it from the road, chances are they aren’t going to stop. In turn, my customers will be upset.”
Mike Rowell, publisher of The Apartment Guide, said he’s had distribution boxes in 200 locations for 15 years. “If I have to write a check for $1,600 to $2,000 a month when I wasn’t paying anything, it becomes a real hardship on the bottom line,” he said. “Not only that, I’m heavily invested in my boxes and I would have to pick those up.”

Marilyn Smith, publisher of Metro Christian Living and Jackson Christian Family, said she wouldn’t be affected immediately by the change, but when the program extends to second tier locations, such as hospitals and doctor’s offices, “it would be devastating.”

“The YMCA is one of our biggest advertisers,” she said. “They’ve been with me since my first magazine. They said they had no idea there was a clause in the contract that … The Clarion-Ledger would be able to keep up with our distribution and decide that if our magazine were not being picked up, then they would just quit putting our magazines in their boxes. Somehow, I don’t trust my competitor to do that for me. They misrepresented this (program) to the business owners by making them believe we were all behind this and we didn’t even know what was happening.”

In the middle

Pam Sultan, vice president of marketing for the YMCA, mirrored other advertisers’ reactions by saying, “I’m truly caught in the middle.”

“We have an excellent relationship with The Clarion-Ledger and we have an excellent relationship with several of the publications on the list that was presented to us. It’s an unfortunate situation and I wish it hadn’t happened, but I think it’s going to be rectified.”

When making the sales pitch to merchants, The Clarion-Ledger representatives handed them a sales sheet titled “Rack Placement Agreement Schedule A,” listing nearly three dozen independent publications that had “agreed” to the program. Jackson-based Phelps Dunbar law firm, representing The Clarion-Ledger, issued a letter to the Jackson Free Press stating regret for “any misunderstanding resulting from its inclusion of JFP on the initial schedule.”

Before meeting with The Clarion-Ledger circulation director Lee Warmouth, Stauffer said: “I’d heard from other independent publications around the country about this tactic that Gannett uses in the markets where they have a monopoly daily paper, so I had some idea what to expect and I had a feeling I wouldn’t be happy about it.”

Gannett initiated TDN in Greenville, S.C., between Christmas and New Year’s in late 2004. Within a year, the 20,000-circulation alternative weekly MetroBeat ceased publication.

“My admittedly casual back-of-an-envelope calculation in 2004 was that using all of TDN’s boxes would have cost MetroBeat over $130,000 per year,” said MetroBeat publisher James Shannon, who added that his great-grandfather, Col. J.J. Shannon, founded the publication now known as The Clarion-Ledger in 1862. “We didn’t want to tangle with a litigious multi-billion dollar corporation.”

Richard Karpel, executive director of the Association of Alternative Newsweeklies in Washington, D.C., said there are two ways to look at The Clarion-Ledger’s new business venture: “On one hand, it’s just a company being aggressive, trying to secure all the distribution leverage it can. This is a public company. They’ve got shareholders. The only thing they’re not aggressive about at Gannett is producing really good journalism, unfortunately.”

As a result of the battle over rack territory, independent publishers have formed the Mississippi Independent Publishers Alliance, according to Blake.

Other considerations

The Clarion-Ledger declined to answer specific questions about the network, but issued the following statement: “The Distribution Network of Central Mississippi is a display and delivery network that has been established for the benefit of merchants and free publications in Hinds, Madison and Rankin counties. The growing number of free publications, not just here, but around the country, presents both opportunity and concern for us.

“There are benefits to merchants and publishers. For area merchants, the multi-pocket display controls the clutter racks on their property and drives traffic to a concentrated area for the all-free publications. Participating publishers can expand their distribution without capital investment and, in many cases, can cut delivery costs.

“Publishers can choose as many or as few of the locations to participate in. The merchant solely dictates what publications are to be made available to their customers, just as they do now.

“A distribution network will happen in metro Jackson, if not by The Clarion-Ledger, then quite possibly by a distribution company with no connection to Jackson or Mississippi. And, based on national trends, companies from outside this market would likely charge much higher rates for the same services.”

Part of the problem?

Stauffer said his gut reaction is “The Clarion-Ledger should clean up its own mess, first.”

“They’ve created some of the problems by launching a number of free distribution publications in the past year to compete with the real estate guides, car guides and even the local parenting resources,” he pointed out. “And, of course, they pulled the Weekend section out of the newspaper and made it free in order to compete directly with the Jackson Free Press. If they want a large box to distribute their own publications, I encourage them to do it. (It) would be a smart move on their part and help build goodwill with merchants. But the most disconcerting part of their plan is the exclusivity arrangement they make with the locations. I’m concerned that TDN will simply create a barrier to entry for free publications that fulfill a strong niche in the community. If any of these publications — all of which are small businesses in the community-are forced to spend upwards of $40,000 to $60,000 a year to distribute in The Clarion-Ledger’s boxes, it seriously affects our ability to be available to readers in locations that they find convenient.”

Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.


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