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Grosso Modo | The Newsstand’s Last Stand

Pillboxes: The face of New York City’s brand new news kiosks

We pull into a rest stop along the Anchieta-Imigrantes before descending through the foggy Serra do Mar to the North Shore.

Along the way, we visit the newsstand to buy some magazines for beach reading.

Not only do we discover that our personal must-read CartaCapital is not for sale, but also that virtually every title available in this roadside newsstand is a publication of the Grupo Abril — the market leading publisher of Veja, Exame, Claudia, Superinterresante and many others.

The man behind the counter is nervous and cannot explain the fact.

In 2007, the distribution arm of Abril acquired Chinaglia, the last independent press distribution company in the state, and now enjoys a monopoly in this market. The newly formed corporation is known as Treelog S.A. Logística Distribuição.

Newsstands are an integral part of São Paulo’s urban ecology, and newsstand owners, like taxi drivers, are useful  pressure points if you want to take the pulse of the city. Some feature Abril on their marquees, others Editora Três or Globo, and still others reserve the display window for Carta Capital.  But newsstand owners are almost always reticent to discuss their relationships with their distributors.

The same is true in New York  — or used to be true until the Spanish company Cemusa bought up the majority of independent street kiosks. The process of obtaining a license to mount a kiosk still requires that no one individual own more than one stand. (Source: Vanishing New York)

My impression — possibly ingenuous — was always that market forces dictated how much of what these independents ordered from their wholesaler, depending on customer demand.

My old newsie at Wall and Water was sharp this way: he knew what you wanted better than you did. And naturally, he ordered the W$J by the bucketful, and so many The Nations.

Cemusa’s Brazilian subsidiary is active in bus stop and news kiosk advertising in  five Brazilian capitals, but not São Paulo, as far as I can see.

At any rate, Danielle Naves de Oliveira, writing for Observatório da Imprensa — 25 September 2012 — compares this situation to a print distribution industry standard in Germany, and I translate.

Here is a case that resembles our own situation.

As those of us who still patronize newsstands know, the print genres are in decline. Newsprint is suffering the effects of the digital and press runs get smaller and smaller every day. On the shelves, old school magazines and newspapers share space with all sorts of unjournalistic paraphernalia: toys, beauty products, stationery.  The topic at hand is precisely this: the battle for space on the newsstand shelves, antiquated though the issue may seem.

Hierarchy and categorization are two characteristics of journalism that will survive in any journalistic medium and continue to influence the physical means by which news reaches its consumers. Print media are governed by an international standard with slight variations: media distribution companies or their lobbies seek to determine the position of every product on newsstand shelves. If a certain magazine has greater visiblity and readier to hand than its competition, this is no accident.  If a small neighborhood weekly is hidden under a pile of other anonymous paper, this, too, is no accident.

Since October of 2007, the Brazilian print distribution sector has functioned as a monopoly. Prior to this, two major distributors split the work of distributing newsprint to the newsstand. Dinap, owned by the Grupo Abril, distributed 70% of all national print media, with pride of place afforded to its own products: Veja, Exame, Claudia, and others.

This month, according to Meio e Mensagem, the Abril group began a program called Concurso Banca Nova, in partnership with the city government, ANJ | National Association of Newspapers and ANER | National Association of Magazine Editors.

The project will roll out a pilot program for the Largo de Batata, a heavy hardhat zone these days.

Let me digress for a moment and translate:

In an effort to modernize the area surrounding its headquarters in the Pinheiros neighborhood, Abril created the New Newsstand Competition. Along with modernizing the landscape of neighboring streets, which have experienced significant transformations in recent years — integration of CPTM commuter rail with the subway, creation of a new subway and train terminal (to be named after Abril founder Victor Civitá) and urban renewal involving sidewalks and public areas — Abril intends to impart new life to the newsstands and kiosks of São Paulo.

Note in passing: no amount of urban renewal will domesticate the area so long as the Pinheiros River continues to stink the way it stinks.

Back to Danielle:

With its 30% market share, Fernando Chinaglia was responsible for distributing stronger competitors of the Abril group, such as IstoÉ, as well as many smaller publications that despite their small circulation,had found an established niche.

The tables turned when Grupo Abril bought out Chinaglia, leaving it with 100% of the market and leveling out the margins of the smaller publications. If freedom of expression and the press  have their regulators and regulations — albeit only fitfully applied — print distribution has no such mechanism.  The law of the jungle rules the day.

Presse-Grosso: The German way. As one monopoly consolidates itself in Brazil, in Germany another is starting to collapse. Presse-Grosso is the German term for a wholesale distribution system that has enjoyed near complete control over the market for the past five decades.. The only cities not subject to the system are Hamburg and Berlin, where a mixed, autonomous distribution system holds sway.

Another exception are newsstands at train stations, which because they receive their merchandise by train are able to function independently.

Publishing houses that adhere to the Presse-Grosso scheme are subjected to rigorous rules, including an abusive clause that bars them from questioning the system.  As in Brazil, the distributor decides what shelf space will be occupied by which newspaper or magazine.  At first glance, this system may sound arbitrary or abusive, but it is supported by a large portion of public opinion.

In November 2011, the newspaper Zeit created a dossier on this state of affairs, noting that “it is inherent to the principle of freedom of expression that print media be available all over Germany and that they have equality of opportunity on newsstand shelves.  The decision as to shelf placement belongs neither to the publisher or to the retailer, but is the result of various factors, including market research, and is the province of the distributor.

One of the main arguments in support of the Presse-Grosso scheme is that its geographic scope enables it to ensure that the largest numbers of readers, including those who live in distant parts of Germany, have access to print media. In this respect, there are a number of success stories in which smaller publications benefited: the independent magazine Landlust, for example, became an unlikely sales leader with articles about nature  and country life, bucolic themes that attracts various facets of the German public.

Creative Destruction

Despite this, the prevailing sentiment among publishers seems to be dissatisfaction. The incident that led to the crisis of the Presse-Grosso system came in 2009, when Editora Bauer decided to question the rules of the game.  At the time, Bauer produced 15% of the titles distributed by the Presse-Grosso system. In its lawsuit, Bauer alleged that it was neglected in favor of its rival, and demanded greater visibility on the shelves. At the same time, it criticized the supposed neutrality of Presse-Grosso members, suggesting that its decisions are in fact the result of cartel formation and shady seven-figure deals.

Bauer won its suit and prevailed in all appeals in the case in February 2012. From now on, Bauer will use its own distribution company.  In this way, the distribution business, which in principle operates behind the scenes of the media production process, has become a central concern in the German debate over freedom of expression and of the press.

What we are observing, then, is an opening of the market, tending to the diversification of services on offer.

The effects of this new scenario remain to be seen, but public opinion is concerned about the issue.  Depending on the efficiency or lack thereof of the new distribution models, access to news media may be restricted, or it may be amplified.  Let us wait and see.