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Proposed plan on distribution of free publications racks up opposition

This article first appeared in the St. Louis Beacon, Aug. 29, 2011 - A firm that distributes some of the larger free publications in the St. Louis area -- as well as the Post-Dispatch and the Suburban Journals -- wants retailers to sign on to a plan that other publishers say could shut them out of their traditional locations.

St. Louis is home to scores of free publications placed near retailers' entrances or in news bins on street corners. And wide availability of these periodicals is often critical to attracting readership and capturing advertising dollars.

But publishers of free publications have criticized STL Distribution Services LLC -- a subsidiary of Lee Enterprises -- for shopping around a plan that would pay to place racks inside businesses, as well as dictate which publications could be displayed in the racks and which could not.

Complicating the proposal, Lee Enterprises itself publishes a number of free publications, including Feast Magazine, The Ladue News, Rides Magazine and GO! Magazine, which compete with independent publications such as Sauce Magazine, Town & Style and Auto Source, to name a few. It also owns the Post-Dispatch and the Suburban Journals.

A scanned contract and pictures of the planned racks were posted on a website of a group called the St. Louis Independent Publications Alliance. Among other things, the contract stipulates that a retailer would agree not to "allow any other racks or displays for the dissemination of free newspapers or any other type of free publication in any Location identified in the agreement."

"Retailer agrees that STLD will have sole discretion as to which publications are allowed to be placed in the Rack," the contract states. "Retailer agrees to assist STLD in keeping unauthorized publications out of the Racks and to notify STLD if any Rack needs maintenance."

The leaders of several publications interviewed for the Beacon said the plan could adversely affect their publications' abilities to attract advertising and remain available around the St. Louis region. But the president of the distribution company said the contract is a way of providing an income to local merchants and a way of assisting smaller publishers of free publications.

In any case, an unsigned blog post from the St. Louis Independent Publications Alliance stated that the group is speaking out to prevent the plan from "taking a hold on our market place and preventing the free distribution of information that is afforded to all publishers and media groups by the First Amendment."

"Make no mistake," the blog post added, "members of this alliance are not threatened by the presence of Lee owned competition, which has the same right to distribute news and information. We simply want to equitably coexist, to pursue our passions, to make a living, contribute to the growth of our areas and to share our content with the public without gross interference on the part of Lee Enterprises and the free publications the company owns and distributes."

A Plan For Retailers

The president of STL Distribution, which distributes the St. Louis Post-Dispatch, the Suburban Journals, USA Today, the New York Times and the Wall Street Journal, said its program is patterned after companies that distribute publications to grocery stories and fast food restaurants.

In a written statement provided to the Beacon, STL Distribution President Tom Livingston said his company "recently embarked on a program offering independent retailers and restaurant owners an option to organize and improve the appearance of their lobby entrance."

The plan, according to Livingston, involves STL Distribution placing a single display unit to hold all free publications at a business' location.

"STL Distribution Services LLC would then approach publishers, who would pay a small monthly fee for the rights to be placed on the display unit at that location," Livingston said.

Livingston added that once they had secured participating locations, STL Distribution Services would approach individual publishers "with the option to lease space from us at whatever locations they desire."

Livingston said the program is "voluntary" for both the retailers and publishers.

"If a retailer is concerned that his location may lose publications due to this program, [he or she] can decline our offer and nothing changes," Livingston said. "We will continue to service their location as normal. This is simply a chance for them to receive income and an attractive new display unit if they choose."

Livingston said the program may actually save money for publishers of free publications, especially those who do not have a lot of money to buy racks.

"[Publishers] save on equipment purchases necessary to display their publication," Livingston said. "Many free publishers do not own or provide display racks for their locations, which often results in a sloppy or hazardous situation when publications are put on the floor."

Backlash

Several publishers of free publications who have joined the independent alliance were critical of STL Distribution's plan. They say if the plan takes hold, it could make it more difficult for people to pick up their periodicals at retailers.

"This is really about the readers," said Town & Style Publisher Lauren Rechan, whose publication is part of the St. Louis Independent Publications Alliance. "We have our own business concerns. But the readers don't really care about our business concerns. They care about being able to read what they want to read. So really, that's what it's going to come down to: people going into establishments and saying 'Where's Town & Style? I've always picked it up here on Wednesdays. Where is that?'"

"If these retailers start doing this," she added, "then they're going to start hearing from their customers."

Rechan said a particular problem with the proposed arrangement is that STL Distribution is effectively a competitor, something that can't be said for companies that are simply in charge of stocking publications for grocery stores.

"Now you're talking about a direct competitor being in control of these products and whether you be in a retail position or not," Rechan said.

Sauce Publisher Allyson Mace, whose publication is also a member of the alliance, said it is almost unheard of for publications to pay businesses to house their newspapers. The exception, Mace said, is at grocery stores.

And unlike Town & Style, which Rechan said is mailed to people for free and distributed at no charge at retailers, Sauce is primarily distributed at businesses across the St. Louis metropolitan area.

"I'm a free publication," Mace said. "And without being able to put the magazines out at all the locations, a thousand of them for me at no charge, it basically puts a stranglehold on my ability financially to supply the magazines to our readers."

Mace said if 500 or 600 businesses accept the STL Distribution contract and force a publication such as Sauce to pay a monthly fee to house its publications, it could cost the company thousands of dollars every month.

"As a free publication where I'm not getting paid for each individual piece, it's ludicrous. It's completely undoable," Mace said.

Darin Slyman, publisher of Vital Voice, said the plan wouldn't affect his publication as much as Sauce or Town & Style. He said Lee Enterprises doesn't produce a competing LGBT publication, adding that his paper is in select businesses such as small coffee shops, gay bars and salons.

But Slyman -- whose publication is also a member of the alliance -- said the plan could affect his company if, for instance, Whole Foods in Brentwood decided to sign STL Distribution's contract. That, he said, is Vital Voice's largest distribution point.

"I don't think traditionally our market or our community would ever really just completely jump on the bandwagon for this," Slyman said.

In response Livingston said his company is "not attempting to limit or lock out any competitor."

"To the contrary we need their participation in order for this to be a profitable venture for STL Distribution Services, LLC," Livingston said. "In order to protect our investment, the agreement with the retailer is written so that all free publications must be coordinated through [STL Distribution]. If this provision did not exist, no publisher would pay to be on our display if they could remain at the location at no cost."

Asking about retailers' reception of the plan, Livingston said "response from our calls has been positive." Without specifying a number, Livingston added "we are on track with the number of signed agreements we expected to have at this point."

"There is no deadline for retailers to respond and there is no minimum number of participating retailers needed for us to go forward," Livingston said. "We are committed to this program for the long haul and expect to see continued growth over the next several months."

The publishers' alliance website lists at least 15 retailers who it says support the group's efforts.

Speaking Out

This isn't the first time distributors of free publications have raised concerns.

For instance, MetroBEAT -- a Greenville, S.C., alternative weekly -- had friction with a Gannett-owned distribution company over the placement of free publications in businesses. The Charleston City Paper had a similar problem in 2007 with a distribution proposal from competitor Evening Post Publishing .

Dan Hayes, a spokesman for Lee Enterprises, said in an e-mail that STL Distribution Services' contracting is "unique to St. Louis" and that "all polices are determined locally."

He also said Lee Enterprises does not own any other separate distribution companies besides STL Distribution Services.

Dwight Bitikofer, publisher of the Webster-Kirkwood Times, South County Times and the West End World, said in an e-mail he hasn't heard many details about the plan. None of those publications has joined the St. Louis Independent Publications Alliance, according to the group's website.

He did add, though, that he is "generally opposed to controlled rack distribution versus open distribution, but it may be one of the realities of the marketplace."

"As of today's date, I have no specifics to share about how this could affect Webster-Kirkwood Times, South County Times and the West End Word," Bitikofer said.

Rechan said public pressure against the plan may be the only recourse, because there don't seem like any legal options available.

"But I think the more people hear about it, the more they get upset about this," she said.

Mace echoed Rechan's sentiments.

"And [we're] making sure that the distribution points that are getting Sauce Magazine are aware that this is not a practice that's going to benefit the community or any of the free publications out there not controlled by STL Distribution," Mace said.

Jason Rosenbaum is a freelance writer in St. Louis.

Jason is the politics correspondent for St. Louis Public Radio.

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