A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Month: November 2006

Paris in December, Le Web 3 beckons

I have booked to attend this year’s Le Web 3 conference in Paris on December 11 and 12. Le Web 3 is part media, part web 2.0 and part blogging conference. Consider these presentation topics:

User generated content and globalization: does it mean less regions and languages in the future or the contrary ?
Lost In Translation (why the US companies usually fail in Europe and have to make acquisitions)
Will there be a Web 2.0 bubble ?
The new dawn of media
Why old media is dead
The death of TV through distribution
The death of TV through content
The future of business
When will virtual life better than our real life ?
Young generations 2.0: Web & mobile communities
Mobility 2.0. : “always on” and always “on the move”

With 900 participants, an agenda packed with sessions the likes of which I have not seen in Australia and with speakers including the founder of Skype, the founder of Technorati, and the founder of LastMinute, Le Web 3 is bound to be an exciting couple of days. While I am going primarily for our new Find It business much of the content will also have application for the work I do with newsagents.

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Media disruption

Proof Australia Post is confusing consumers

We are running an outpost for Christmas cards and wrapping paper outside our newsagency – between us and the government owned Australia Post shop. The extent of Australia Post’s success at encroaching on newsagent categories is evident by the number of people who think they have to pay for the cards at Australia Post. There have been plenty. So many in fact that we now have signs. It never occurred to us that we would have to say that it’s an outpost for our newsagency. Take a look at the photos.

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These are traditional newsagency lines. It’s only in recent years that Australia Post has more aggressively entered the greeting card space. In the 1990s there would not have been any question. Today, consumers are confused thanks to government inaction. Now, looking into their government owned shops, they look more like newsagencies than ever.

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Today I even say someone browse, select a range of items, walk toward Australia Post, see the line backed up through their shop and put the stock down and walk away. Thanks Australia Post – your appalling service cost us a sale. (I couldn’t get to them fast enough.)

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The Government has been telling us all through the AWB wheat scandal that no one told them what AWB was doing. In the case of Australia Post the government has been told what their 100% owned enterprise is doing to small business. I wonder how they will deny knowledge when newsagencies close as a result of Australia Post’s unfair competition against them.

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Australia Post

Newsagents ignore the Christmas party

There is a party going on at the moment and newsagents have forgotten to turn up. Nothing unusual about that. It’s an annual party yet we neglect it year after year. The party is Christmas and while we celebrate in store we do very little to drive customers to our shops. Okay, that’s not quite true. Many of us send our catalogues with offers and there is a smattering of TV advertising around the country. But that’s it. Compared to our major competitors in the greeting card and Christmas product area we are not on the consumer radar. Australia Post, Safeway / Woolworths, Coles, Big W, Target – I could go on – they are all on TV touting Christmas offers. Much of their TV content could relate to newsagents – greeting cards, wrapping paper, calendars, small gifts. The longer newsagents continue to ignore the party the more their share of business will fall.

A challenge is how to brand such advertising. For example, while we’re all newsagents, newsXpress stores would want their branding up as would Nextra and Newspower. The answer is to support all the brands. Christmas is one time the channel ought to consider an unified approach to celebrate the season and raise newsagencies and the key banner groups back into the minds of consumers.

As a shareholder in newsXpress I’ll be suggesting that the banner groups get together to discuss this in preparation for next Christmas. Either that or one of the groups breaks out with a cut through ad which pulls them ahead of the others on TV and in other media. Something has to happen because the current inaction is losing sales.

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Newsagency challenges

Canson paper loses our business

We wanted to introduce the Canson range of papers to our shop. We called to request an order form – knowing the product well from past experience. They refused to send it to us, preferring to have a sales rep visit. We could not persuade them that we just wanted to place an order. We are cutting down on the time reps spend in our shop – newsagent suppliers need to understand that how we buy has changed. Canson’s stubbornness is their loss.

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supplier arogance

INMA Newspaper Outlook 2007

blog-inma.JPGNewspaper Outlook 2007 in an excellent report by Earl Wilkinson, CEO International Newspaper Marketing Association (INMA). It confronts issues some newspapers have difficulty reporting in their pages (especially Australian newspapers) – the process of transitioning their revenue model from one based purely on print to one based primarily online with some print model. The US$195 report is compelling reading for newsagents as it 75 pages of evidence that the foundations on which newsagencies were created in the 1800s have shifted. As Wilkinson writes:

Unfortunately, the transition will be most painful for the people who are least informed about the over-arching trends in media industry: the editorial community.

I’d replace “editorial community” with “newsagents”. Newsagents don’t feel the change, certainly not to an extent to accept it as real. Not here in Australia yet at least. Newspaper sales are strong. Enough are experiencing growth for newsagents to be confident.

As this report indicates, the future for newspaper publishers is away from paid for copies and the traditional model. Wilkinson says that the “destination is clear”:

Internet-First
Local Journalism
Always On and Interactive
Core Product Smaller
Lower Profit Margins

Wilkinson sees a newspaper outlook in 2007 based on publishers moving more investment from traditional product to online and achieving more profit from online. Newsagents must listen to this message. While I don’t expect them to stump up the US$195 for the INMA report, they must take note that here is a respected executive from publisher circles saying that the game we have played for decades is over, it’s a new world and investment in your business must reflect this.

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Citizen Journalism

Newspaper home delivery prices: US vs. Australia

I found this announcement from the New York Times from February this year, advising of a home delivery increase to US$8.00 for 7 day home delivery. It was their first increase in ten years. The Sydney Morning Herald and The Age are the closest newspapers we have to the Times here. Their seven day home delivery fees are, by my reckoning, 40% less than those for the Times. The Times charges more the further you are from New York. I’m told that delivery charges for a year are US$255.00, making the daily cost 70 cents – between seven and ten times the Australian home delivery fee. There’s some more discussion about the New York Times figures here.

Newsagents in Australia get between 50 cents and 70 cents a week for a seven day home delivery of a newspaper. We’ve had one increase in ten years. We are worse off today in real terms than ten years ago yet wages, fuel and other costs have risen in real terms.

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Newsagency challenges

Newsagents as entrepreneurs

Steve Outing in his Stop The Presses column at Editor and Publisher yesterday grades newspaper websites. Ahead of the article itself is this introduction:

Just about everyone — finally — is on board and working to address the big problem: How to transition a significant part of the newspaper business to online and new media while keeping enough money flowing in during the transition period to fund quality journalism, and prevent newspapers from entering a downward spiral. So how’s this going?

Newsagents need to read this and understand what is being said. Newspapers are transitioning revenue. This means newsagents must transition revenue as well.

Outing’s article rates newspaper sites and, overall, says newspaper publishers are not doing enough to drive the transition. He opens his conclusion with:

With all the hand-wringing in the industry about how to cope — and the acceptance at the corporate level that big changes are required right now to address the challenges faced by newspapers — I’m surprised in looking at today’s state of the newspaper website that the changes aren’t more dramatic.

At least newspaper publishers have started. Newsagents have not. Our shopfits continue to be the same, the supply model of newspapers and magazines is the same, our product mix is the same, the earnings multiple for purchase is the same. Newsagents are not embracing change. They are waiting for someone else to deliver the changes to them.

The biggest transition newsagents face is that of moving from being a servant to being an entrepreneur. Some have done this with excellent success. Most have not.

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Newsagency challenges

Yes, Sir Humphrey is working for the Government!

Further to my earlier comments about Australia Post, I received this letter yesterday from an Assistant Advisor to Senator Coonan, the Minister responsible for Australia Post. The adviser has not read my letter and considered my concerns. This letter is similar to others I have seen out of the Minister’s office on the same topic. For example, I have a letter sent by Senator Coonan to a colleague in Parliament with almost identical wording. Again, no attempt to consider the problem as something which Government policy has created and fostered.

Australia Post is creeping closer to being a newsagency in its Government owned stores. It is abusing the Act, with permission from the Government, and taking revenue from newsagencies like mine which directly compete with a Government owned and operated shop. Right now we are going head to head on calendars, cards, printer ink, gifts, stationery and a range of other smaller items. Every day this continues is another day the Government demonstrates disinterest in small business.

Read the letter and see Sir Humphrey at work.

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Australia Post

Free personals site launched

3loves.JPGWe have launched 3Loves, a free online personals and dating site as one of three social media sites which will support our Find It online classifieds model. Our research has shown that reasonable interaction with a personals site costs in the order of $30.00 a month. At 3Loves we want people interesting in making friends and finding dating opportunities to put away their credit cards – because we believe in free love.

Click here to see a map of the newsagents behind Find It. They earn commission from payments and from advertisers they bring to the site.

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Online classifieds

Logjam at the newsagent counter

Over the last three years newsagents have dramatically increased services offered at the counter, adding bill payment, money transfer, phone recharge and calling card sale to the more traditional newspaper account payment. Each involves technology. Some require customers to make decisions which often take longer than the commission is worth – calling cards are a good example of this. While providing these services is an important traffic generator for newsagents, we risk tarnishing our image of excellent customer service. Slow and out of date IT interfaces by some suppliers are delaying simple transactions such as sales of magazines, newspapers and greeting cards.

Newsagents need to demand that systems used and systems with which newsagents interface are state of the art. Not all current systems are – they cause traffic problems at the counter and disadvantage newsagents and their customers.

If the services part of our business is to grow, and it needs to, we need our suppliers to provide better IT links which reduce the technology at the counter rather than make it worse. To see our suppliers deliver better technology to our competitors ahead of the newsagent network is disappointing.

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Newsagency challenges

Worker injury risk with heavy newspapers

Further to my post, Overweight newspapers make for unsafe work practices according to OH&S study, two delivery drivers for newspaper publishers have contacted me about their concerns with overweight newspapers. Once has commented at the above entry. I’ve also heard from several newsagents, one of whom told me about a driver who went on sick leave last week with shoulder injuries. The problem with the weight of newspapers is not new. What is new is that there is now a respected report which provides evidence and demands action.

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Newspapers

Fat magazine packs cause a real-estate problem

drift.JPGThis month we cannot fir our usual seven copies of Drift into our magazine fixturing. The publisher has created a triple pack – I guess to make their offer more enticing. As the photo shows I can fit three of the triple packs into a usual magazine pocket. I have to jam the other four into another pocket. This costs me an extra $3.50 in real-estate for the month and while that will not break the back, based on sales of this title, the decision by the publisher wipes out the profit I would have made based on usual sales. It also means I have to take the pocket from another title or, horror, double up titles. The alternative is to put the extra copies of Drift in the back room and pull them out one there is room, however, the labour involved in that approach would be worse than taking the extra pocket.

Magazine publishers and distributors need to understand the problems these triple and double packs cause retailers.

Newsagents need to be more business-like in terms of labour and real-estate. They (we) ought to change the magazine model, and charge for space used by title selling fewer than, say, twenty copies and or selling less than 50% of the product received. In the current model we take everything suppliers and invest our time and real-estate. For titles outside the top 200, the return is all too often nil. It is only once we take control of our space that we will become competitive in the magazine space.

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magazines

Taking my customers from me

As a retail only newsagent now I don’t like the post-it note ad on the front of The Age today luring customers to get the newspaper home delivered. There’s nothing in that for me. If the folks at The Age want me to engage in in-store promotions to drive over the counter sales, they need to NOT undercut me in this way. What they are doing is disrespectful to all newsagents – delivery newsagents make less from a subscription delivery than they make from an over the counter sale. The retail channel is important to publishers – taking sales out of retail weakens the channel, leaving what? Not much.

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The stuck on ad covered a promotion for a feature. Surely there are arguments going on within Fairfax about these stuck on ads?

I note that not all Ages in Melbourne had the ad. In two newsagencies I saw product without the ad whereas in mine and a convenience store the ads were in place.

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Newsagency challenges

Reclaiming the magazine specialist title

If newsagents are to maintain (reclaim?) the title of magazine specialists we need to bring our magazine displays up to current standards. While our competitors display full face in most cases, we continue to hide attractive covers in our fixturing. This will only hurt sales.

aww_christmas2.JPGHere’s the view of this month’s Women’s Weekly from a customer perspective in traditional newsagent racking.

Barely the top third of the title is on display. While you can see what the magazine is, the key value propositions are lost. Browsers are not as enticed as they could be and this affects impulse purchases.

aww_christmas.JPGHere’s the full cover of the magazine. Now you can see that it’s Bindy Irwin on the cover and that the magazine comes with a free CD of Christmas music. Both reasons to display the full cover and not the top third.

We are doing high volume titles like Women’s Weekly a disservice by using racking systems which are years out of date.

Shop designers and fitters are doing newsagents a disservice by continuing with such out of date racking systems. They need to lift their game and help newsagents lift theirs.

We carry too many titles to full face display all. What I am planning is to introduce full face racking for the top 25 titles at the counter and a further 250 titles at the high traffic entrance to the magazine area. The rest of the magazines will be displayed in racking which is a step ahead of current racking. The cost of this partial refit will be in the order of $35,000. That’s a high price with magazines generating 25% GP but worth it if I am to be the magazine specialists in the area.

A consequence of bringing magazine display into today’s standards is a cut in the space allocation.

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magazines

New Idea beats Woman’s Day?

This week’s New Idea hit the shelves three days early – Friday last week – with the Belinda Emmett feature. Woman’s Day came out as usual on Monday with a similar feature. The three days have made a difference in my newsagency and others I have spoken with – New Idea is ahead of average weekly sales by 20% and Woman’s Day behind by 15%.

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marketing

Newspaper future?

Thanks to Jeff Jarvis’ BuzzMachine I read this article by Michael Hirschorn writing at The Atlantic. He tells it how it is for newspapers and lays out a future for journalism. It’s good seeing a newspaper publisher give space to his balanced view. Here is someone from the inside acknowledging that newspapers as we know them are fading yet outlining how the future can be bright. Now, how do we get newsagents to engage with this?

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Newspapers

The masthead ad addiction

Another day, another post-it type ad on the masthead of The Age. What is odd is that not all copies of The Age in Melbourne yesterday had this ad. I wonder if they are targeting certain areas?

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Here’s today’s ad. Three this week. It will take more than 12 steps to break this addiction. I note that a work colleague bought The Age elsewhere and his copy did not have the post-it ad. More geographic targeting?

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I bought this copy at a 7-eleven. As I was leaving I realised there was a free magazine which was not inserted. I went back to the paper stand and hunted around. There it was upside down on the floor. I know that by 7am in newsagencies across Melbourne the Melbourne Magazine will be either well displayed next to the newspaper or already inserted. The 7-eleven counter person asked what the magazine was – thinking I was stealing something.

Publishers need to understand the value newsagents bring to the table through better compliance and service. Newsagents need to be loud and proud of their service levels rather than bowing to publishers all the time.

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Newsagency challenges

Bits from the Media & Broadcasting Congress

The two day Congress in Sydney earlier this week was worthwhile beyond what I have already covered. Here are some of the other highlights as I saw them:

Magazines and the Internet: Patsy Keegan of Vanishing Point Media reinforced how important an online strategy is for magazines. She made sense talking about how successful titles use the Internet to engage with readers. Good local example: Girlfriend – brilliant reader engagement.

Old media adapting to Internet opportunities: Rohan Lund, Director, Digital Media and Strategic Investments, Seven Network took us behind the scenes on how Seven has embraced Yahoo! and embedded Yahoo! people with TV shows and magazines to create a more valuable relationship. The Yahoo! Side of things is providing a level of engagement that a pure broadcaster cannot achieve.

Today’s media Company: Tony Faure, CEO, ninemsn was opening keynote for the conference and set the tone. The world has changed. Media companies are not what they used to be. Those in the media need to adapt. This is an era of engagement and personalisation. Of course, the newspaper folks who followed Tony – see earlier blog entry – weren’t listening.

See the theme – engagement. We have engagement in newsagencies with every customer contact. However, few of us really engage – certainly not in a way which is comparable to the liberating engagement of a good website.

The biggest highlight of the Congress, from a small business perspective, is the opportunity to listen to representatives from suppliers and major media companies talk in broad terms about the new world and do some naval gazing about that. Back in my newsagency this morning dealing grass roots issues, it’s easy to forget the lofty ideas swirling around my head during the Congress. Day to day newsagents have little time for naval gazing and business planning. Their twelve to sixteen hour days are overcommitted with heavy labour, customer service, accounting, dealing with reps who are always ‘dropping in’, putting up displays, taking down displays, putting out new stock, processing returns … and so on. Back in they day they had more employees to do this work. As wages, rent and competition increased, newsagents kept busy and have not modified their businesses to address these very issues. Now, newsagents face, in my view, a tsunami. Newsagents and those who lead them need some serious naval gazing time to plan for the future – but they better hurry because the future will be here sooner than they think.

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Newsagency challenges

Borat viral campaign at YouTube

borat.jpgClick on the image to play the first viral ad we have loaded at YouTube to promote our Find It online classifieds site. We’re planning several ads to get people visiting our site during its beta phase. The Borat ad was made completely in house. Given that we don’t have the budget of News, Fairfax, PBL or Telstra, we have to find more creative ways to get people engaging with our offering. We hope to launch our second ad mid next week.

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Uncategorized

Find It online classifieds re-design launched

findit_logo.JPGWe have launched a new design for our Find It online classifieds model. The new design is very web 2.0. Clean. Easy to navigate. Easy on the eye. All ads are currently free as we are in beta. When we do charge in three months time more than 60% of our categories will remain free. For example, most of what is listed on eBay will always be free at Find It and these free ads can include photos, video and sound – free too.

Newsagents are our partners and will be our only retail payment point. More than 1,000 newsagents are part of the Find It network. This week they are handing our 500,000 bookmarks as part of our promotion of Find It.

This is a David vs. Goliath challenge. We’re small and have little content to offer. Our success will depend in part on how much newsagents engage and promote Find It to their customers to attract content.

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Online classifieds

Citizen journalism Australian style

FPC has Village Voice and created what they claim is “a one-stop-shop for local community information and a unique forum for citizen journalism”.
The key is engagement. In the US and Europe there has been more success at citizen engagement initiatives. Here in Australia we’re slower to engage. Their approach to getting the stories from readers online is old – I’ve seen sites in the US far more advanced. Likewise with free classifieds. It seems simple is free and complex (?) is not. Those issues aside, Village Voice is a welcome initiative in the changing media offering.

I’d like to see newsagents play a role in facilitating citizen engagement with news outlets – our network of stores could become soapbox points where people submit stories, photos etc for inclusion in sites like Village Voice.

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Newsagency challenges

YouTube – unedited, unfiltered, raw – news

Two recent clips at YouTube demonstrate the power of this medium above more filtered news outlets. First up is the video of the Michael Richards’ (AKA Kramer on Seinfeld) racial dummy spit. Then there is the video of an Iranian-American U.S. citizen being repeatedly tazered by security officers at UCLA. The Richards video achieved over 500,000 viewings in 24 hours and the tazer footage achieved 425,000 viewings in 6 days. In both cases YouTube viewers see the story as it happened. They don’t rely on filtering by journalists and editors. While such filtering can be appropriate in many instances, with these two stories the video is better than any reporting. I want to see the raw material so I can make up my own mind with stories like these.

That such footage is so readily available is educating a generation to trust unedited content rather than the masthead. This is a challenge for mainstream media and all who rely on it for income.

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Uncategorized