In February 2005 I spoke at a breakfast meeting of magazine publishers in Sydney and presented a suggested list of magazine key performance indicators. In cleaning up yesterday I found the list and thought I’d publish it here for comment.
- Scale out to reflect title performance in that outlet with proposed supply to be no more than 25% above recent sell through rates except in exceptional circumstances where the additional product is expected to sell due to cover feature or special promotion. With higher scale out to be accepted for an additional fee paid to the newsagent.
- Offering of a carrying fee for titles which do not meet minimum performance criteria so that the newsagent is paid to carry the title. The carrying fee to cover labour, real-estate and any other fixed costs.
- Introduction of a penalty payment to newsagents for any issue with a sell through of less than 50% on an escalating scale based on a falling sell through.
- Newsagents to be able to easily and electronically alter order quantities (i.e. without having to call a call centre and wait on line for too long) and with no maximum number of titles to be adjusted each week or month.
- Newsagent changed supply figures not to be altered without reference to newsagent unless such change absolutely supported by sales data.
- No cut of supply below current recorded net sales.
- No reissue within six months of last issue of a title.
- Delayed billing of at least 30 days for any new title.
- Returns to be credited within 48 hours of provision of electronic returns data or 7 days of provision of physical returns form.
- Returns to be called no later than the date of the next issue of the same title going on sale.
Magazine KPIs are needed for titles outside the top 200. Inside the top 200 the supply model is, overall, good – although somtimes I would like to be able to get extra stock more easily. Th real problem is the titles which generate around 20% of our revenue. These titles are cash flow negative. The KPIs I suggest above, if adopted, would make them at least cashflow neutral. The cash saved would help us have more resources to reinvest in our businesses.
I’d update my delayed billing point (8) to say that delayed billing titles are to be be supplied with an additional fee to cover labour and the space if they do not meet minimum sales performance.
In a shopping centre, a magazine pocket $2.00 and more a week. Add to this the labour cost of magazines in that pocket and you could argue that such a newsagent needs to be paid $2.50 to $3.00 a week just for the space and time.