Time Inc. is back in business with wholesaler Source Interlink Cos., and it could be just a matter of time before fellow publishers patch up their relationship with Source.
Today, the publishing giant and Source announced that they settled Source’s antitrust lawsuit that stemmed from the publishers’ refusal to go along with Source’s demand for an extra 7-cent per-copy fee to distribute its magazines.
Time Inc. said it reached a multi-year agreement with Source to distribute its magazines without the per-copy fee.
Other publishers are expected to follow Time Inc.’s lead now that the publishing juggernaut has struck a deal with Source.
Fellow wholesaler Anderson News Co., which made a similar per-copy fee demand, closed up shop when it got no takers. Once source close to the situation said that once Wal-Mart allocated former Anderson stores to Source, Time Inc. had no choice but to find a way to resume deliveries to Source.
In addition to single-copy sales of People magazine, Time Inc. depends on Wal-Mart to be its exclusive distributor of All You, a women’s service magazine. All You sells more than 400,000 copies per month at Wal-Mart stores.
“Once Time Inc. folded, everybody else will,” the source said. “I think it’s going to be difficult for them not to.”
In its suit, Source accused Time Inc., Bauer Publishing and American Media Inc. and other publishers and distributors of colluding when they stopped shipping magazines to Source rather than pay the fee, and filed suit to force the publishers to resume distributing their magazines to Source.
The wholesaler’s lawsuit against those non-Time Inc. parties continues. Source last week won a temporary restraining order in its action and was due back in court Feb. 23.
Big newsstand sellers magazines like People and Bauer's In Touch have been missing from some retailers as a result of the delivery brouhaha. Source and Anderson represent an estimated 50 percent of the nation’s magazine retail sales.
A Time Inc. spokesperson said that its newsstand disruptions have been minimal and that it hopes for deliveries to be restored by the week of Feb. 23.