How does an upstream firm determine the size of its distribution network and what is the role of vertical restraints? To address these questions we provide an empirical analysis of magazine distribution. Based on the estimates of a model that trades off the market expansion effect and the additional fixed costs of an additional retail outlet, we ask how an upstream firm can influence the size of its distribution network through vertical restraints, focusing on wholesale prices and/or restrictive licensing (refusal to supply). We find that uniform wholesale prices across markets result in profits to the upstream firm that are remarkably close to what it could earn when using market-specific wholesale prices. Second, while under uniform wholesale pricing a firm may use restrictive licensing to avoid excessive entry in local markets where market expansion is too small, the profit-enhancing effects of restrictive licensing policies are limited in our application. (With Frank Verboven.)