If 91% of all Americans read magazines – including 96% of those under the age of 25 – why did the country’s third-largest wholesaler of magazines just abruptly shut down?

NewsstandSource Interlink Distribution (SID), which wholesales about 15% of all magazines sold in retail outlets like WalMart, Safeway, and Barnes & Noble, announced on May 28 that it was discontinuing operations, leaving 6,000 people without jobs and the print media industry reliant on just three such national wholesalers and a handful of small regional players.

SID’s chief rivals — TNG USA, Hudson News, and Ingram Content Group — will soon be servicing most of the retailers left high and dry by the shutdown. But each faces the same challenges sited by SID:  Declining retail foot traffic, changing media consumption habits, and rising fuel and delivery costs.

SID subsidiary RetailVision, which provided a number of key magazine titles to specialty outlets such as music stores, is also a casualty of the closure, with chains like Guitar Center and Sam Ash as well as more than 1,000 independent MI dealers impacted by the shutdown.  MI leader Hal Leonard, which operates an efficient magazine distribution program, will likely pick up titles affected by the RetailVision shutdown.

Unmentioned in SID’s announcement of its own demise are factors that have plagued the magazine distribution industry for decades:  Complacency, cronyism, and a woeful lack of both innovation and cooperation with other partners in the supply chain.  The short-term forecast says cloudiness and uncertainty will linger.  Long-term, the four-tiered supply chain of publisher, national distributor, wholesaler, and retailer may need to shed a layer to assure its own survival.

Published by David Lusterman

David A. Lusterman is the president of Stringletter, which he founded in 1986. He also directs the Marin Community Music School in San Anselmo, California, which he founded in 2009. He might found something else someday.