I spoke with Catrin Thomas – Director of Retail Circulation at News Limited, this morning about their decision to suspend the T2020 newspaper distribution consolidation trial in Queensland.
The trial itself is what has led to the decision to suspend T2020 as planned and to move to a more free market approach. News will shortly announce details of how newsagents can engage in their locally-driven territory consolidation models. They will also launch a new website to support this.
Catrin advised in the call that News remains committed to consolidated territories but that they will not set a size requirement for a consolidated territory. They are also committed to their public statements regarding financial viability of distribution newsagents. News also remains committed to the separation of distribution and retail activity.
Newsagents will be invited to submit proposals to News. While I expect that Associations will suggest that proposals come through them, I’d encourage newsagents to develop plans and submit them directly through processes to be announced by News.
The challenges encountered in the trial remain and some newsagents who do not navigate these challenges will find themselves in difficulty in the more competitive world that will now emerge. The extent of difficulty will depend on geographic situation and other factors. News is not saying this – it’s purely my observation / speculation.
What has changed are the trial itself in Queensland and the roll out by News down the Eastern Seaboard. The goals and principles remain the same. The move to a more market driven approach will provide proactive newsagents an opportunity to move sooner. It also opens up the prospect of competition from outside a territory. This could play out well for existing newsagents but it could equally intensify the challenges they face.
There is no reason for a distribution newsagents to adopt a wait and see approach. Now is the time to be on the front foot, pursuing change, pursuing what is best for your business. No one can tell you what to do in terms of your business other than the fact that you now need to do something – the timing is yours to embrace.
Footnote: It’s been suggested to me that one or more associations may create a commercial entity through which newsagents bid for and or drive consolidation. I’d see such a move to be outside their role as an association. They have no role to play in operating commercial enterprises.
Hi Mark, From my understanding doe’s this mean if you are currently a Retail & Distribution agent at present you will not have your territory/area taken off you by news ltd if your are happy with everything the way it is and you want to keep it?
Or are they still looking at trying to consolidate the runs a different way?
I today witnessed one of the most disgusting acts of selfishness I have ever witnessed by a newsagent. Unfortunately I fear similar acts to this will be repeated by some around the country.
A neighbouring newsagent wanted to sell his extremely small Herald Sun only run. As we are distribution only naturally we were interested. After crunching how much income we believed the territory would produce, and deducting how much it would cost to service this territory, we estimated that it should make a profit of $500-1,000 per year. We offered $1,000, which is probably more than the territory is worth but it would help us reduce some inefficiencies in our business as we have staff who are paid the legally required minimum 3 hours per shift but in fact work less than this. The profit to us would therefore be far greater than the $1,000 that the territory should generate, making the transaction worth it for us.
Another neighbouring newsagent who is also delivery only and happens to deliver the Age in this territory was also asked to bid on it. I would have thought the territory was worth more to him than to us, but he made the decision that he would take it for free but would not pay for it.
Of course the selling newsagent accepted our offer.
Then the fun started. I was abused today in a massive dummy spit. The other delivery only newsagent felt he was entitled to the territory for free and how dare I take it from him. He was of the opinion that us delivery only newsagents should be co-operating to effectively get the entire market for nothing.
This attitude of his does not match with my ethics, I think you should not try and screw people over and pay what it is worth. This selling newsagent will become a subagent to you, why cause trouble with him.
I was extremely disappointed by this behaviour from someone who is meant to be a well respected figure in the newsagency industry.
I’m with you Dean. Thanks for sharing.
How is distribution only still a newsagent?
Amanda a Newsagent is a person or shop selling newspapers and magazines.
I see it more that you have a shop .with out a shop I would call it a paper run . It often confuses me when a distributor is called a newsagent .