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Distribution Cost Model for Discretionary Reading Is Broken

March 26, 2009

Analysis of:The Newstand Mess; alternatives to the 7-cent solution | www.seyboldreport.com

Wholesale distributors are paid as a percent of newstand (retail) sales. Revenues are not their cost drivers! The "push" of Publishers and "pull" of retail newstands are in conflict with one another. The wholesale distributor is squeezed by both "clients." Kindle e-book concept will eliminate 3/4s of the wholesale distributors and free up most of the newstand shelf space. Hence newstands will follow the path of newspapers...gone.

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