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ACCC conference listens to newsagent concerns over proposed magazine supply changes

The ACCC conference to consider a trial of new magazine supply rules held yesterday in response to a request I submitted on behalf of newsXpress was well attended. Major magazine publishers attended along with the MPA, lawyers, the ANF, VANA and NANA, several newsagents and a rep from POS Solutions.

While the main conference room was at the ACCC offices in Sydney, there were video links to Melbourne, Brisbane, Canberra, Adelaide and Darwin. There were six newsXpress newsagents who participated from five states and four independent newsagents. Nextra, The Lucky Charm, Supanews and Newspower were not represented.

This conference was a first for our channel. I cannot recall newsagents ever having this type of opportunity to speak directly to the ACCC on the issue of the magazine supply model or to confront magazine publishers and distributors directly on the damage to newsagency businesses of the magazine supply model.

I applaud those newsagents who participated. Our channel is full of people who complain and lacking people prepared to act rather than complain. Participating yesterday meant a day out of the business and being put in a situation which, for some, was confronting as you are face to face with suppliers which historically have done more to harm our channel than most others.

It is disappointing that associations presenting newsagents have failed to achieve this previously. Newsagents participating yesterday demonstrated that they can speak confidently and personally about the matter without getting too bogged down in minutia.

The conference went for two hours with around half in attendance speaking on the proposed magazine supply rule changes.

As I had requested the conference I was invited to make an opening statement. Click here to see the submission I made on behalf of newsXpress – my opening statement was a summary of this submission. I encourage all newsagents to read this as it summarises the concerns I have with the proposed magazine supply rule changes. Also read the MPA submission to which I was responding.

MPA and Bauer Media representatives at the conference said that the concerns raised were ill-founded in that newsagents would have control over supply and would be able to undertake early returns. My response was that if this is the case then why is it not reflected in the proposed supply rules put to the ACCC for its consideration.

There is a disconnect between what the MPA stated at the conference and what is in its submission to the ACCC for the magazine supply trial. I hope the ACCC considers this. It is covered by my submission to the ACCC.

There was considerable discussion about the failure of the magazine distributors to use the sales data provided by newsagents to set supply figures. In discussing data, a Bauer representative commented that there were many newsagency software packages, inferring working with them was difficult. I pointed out that they, Bauer, played a direct role in approving each newsagency software package for us.

Several newsagents challenged the ANF endorsement of the proposed new supply rule trial and that there had been no consultation. To this, the ANF CEO said there had been consultation citing an article in National Newsagent and a mention in an email to its members.

Had the ANF done its job it would have hosted national meetings where any newsagent could comment on the proposed trial. Indeed, the MPA could have organised such consultation. Instead, it relied on casual discussions with a select group of people and the submitted to the ACCC that it had consulted widely with all stakeholders.

I was given an opportunity toward the end of the ACCC conference to revisit some points made by others. At this time I asked the MPA if they had sought to understand what newsagents who are growing magazine sales had done/ The MPA representative said they had not and that it was not part of this trial.

My view is that this trial is about researching efficiency gain opportunities for magazine distributors and publishers. Those goals are wrapped up to look like there is a benefit for newsagents.

The new magazine supply model outlined by the MPA in their submission to the ACCC does not provide newsagents with any significant benefits, it will not make us more competitive, it will not stop oversupply, it will not make magazines more profitable for us, it will not stop newsagents reducing their commitment to magazines.

If the MPA did research newsagents who are growing magazine sales they would discover learnings which would be of more commercial benefit to the newsagency channel and magazine publishers.

Yesterday’s conference was another step in the process of consideration by the ACCC of the application by the MPA for authorisation for a trial of new magazine supply rules. The ACCC will consider yesterday’s conference, written submissions including the one I linked to above and any other submissions between now and mid May.

This is a vitally important matter for newsagents. If you have an opinion about the magazine supply model you need for magazines to be viable in your newsagency, I urge you to read the MPA application, my submission and consider engaging yourself. The more newsagents who engage the better regardless of your position.

There were some good discussions outside the ACCC meeting which gave me confidence that newsagents have got attention on this matter. Discussions over the next couple of weeks will demonstrate if progress can be made outside of the framework of what has been put to the ACCC on this.

29 likes
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  1. Pat Tobin

    A primary reason for the financial failure of Cardiff newsagency was the burden of the cost of oversupply of magazines along with problems associated with the way other major suppliers treated the industry and the ineffectiveness of our association to quickly make change.The industry is not run by the Newsagents it is run by suppliers and the agreements newsagents are forced to sign — many not knowing the implictions. Through complete frustration , effect on health , inability to get our problems looked at or recognised and any form of assistance –one Friday night we shut the doors, walked out and will never return to what will believe is an overregulated crazy business to be in.

    5 likes

  2. Darren Mclean

    The problem is Coles and Woolworths are killing newsagencies. They only sell the popular Mags. They take your cream. We are left with all the slow sellers. Why is this never mentioned

    8 likes

  3. Brett

    Another reason to early return before it hits the shelf is a series of no sales. My POS tells me when a title does not sell at all, it then recommends an early return. This is not indiscriminate, it is considered and commercially necessary. However I have heard that the distributors then ignore that data, which would explain the continued supply despite no sales being achieved.

    2 likes

  4. MARK RICHARDSON

    As one of the participants in the video conference yesterday . I must say the conference was well run and everyone was given time to comment and ask questions ,the conference ran for 2 hours.

    Thank you to Mark Fletcher for all the work he has done for the industry without his input there would have been no alternate view to the MPAs proposal

    Also the Newsagents who participated yesterday well done . Despite what some make see as a daunting task all the Newsagents presented their case in a clear concise manner

    We can now only wait and hope the ACCC make a determination which will be suitable to all parties not just the MPA

    14 likes

  5. June

    Mark Fletcher has been a champion of and for newsagents over many many years.
    Thank you Mark for your submission to the ACCC.
    Your ability to put the problems and concerns clearly and concisely is very apparent to anyone (hopefully every single newsagent) who bothers to read
    your submission.
    Hopefully, the outcome of the ACCC report will be favourable to newsagents
    who have been treated so shabbily for so many years by the distributors.
    A 53-57% returns ratio even when using xchangeit and retailer to check my supplies and alter them regularly is simply unacceptable.
    Thanks to all the newsagents who gave up their time yesterday to help our industry.

    14 likes

  6. Ross

    June your words should be echoing through every newsagents’ ears and thoughts today. Yes, thanks Mark

    6 likes

  7. Ian

    Well done Mark for taking this initiative with the ACCC. The ANF did not negoiate very well with magazine publisher and distributors last time and they have run roughshod over us ever since despite their early promises of partnership and suplly formulas. It appears the ANF has not learnt the lessons of the past.
    We still want to be regarded as a magazine specialist and magazines are still an important part of our business but we must have control of our stock to keep it financially feasible.

    5 likes

  8. Bill Wareham

    Mark, I would like to congratulate you on the leadership you have shown on this issue.
    The only words to come from the ANF at the conference where to defend their lack of communication on the issue or to say that something is better than nothing. No thought leadership or contribution to the proposal at all.
    Bauer dominated the meeting with their representative which is a huge concern.
    Bauer’s past record in the rationalisation of distribution days was a false promise. The actual 30/70 split of magazine volume versus a promised 50/50 split and their invoicing and edi mess are just 2 examples.

    2 likes

  9. subaru

    I was a little suprised that Gotch were there, yet had nothing to say.
    They let Bauer do all the talking

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  10. Dennis Robertson

    Good work Mark,

    One can only hope the ACCC will take into account Newsagent concerns that have been brought to their attention in written submissions and via the video conference.

    In particular, to ensure absolute clarity, the MPA should confirm in writing to the ACCC, as part of the terms of the trial, that early returns are possible at the discretion of the individual Newsagent and not just when some sort of rare supply order mistake has been made.

    A one of massive negative financial adjustment will happen for Newsagents if early returns are stopped. No prizes for guessing who will get the financial gain in the month that early returns are stopped.

    The irony is that if the ACCC does not get this right and Newsagents are adversely impacted to the significant degree I think they will, then, over time, more and more will happily opt out of magazines and greater and greater percentages of MPA business will be transacted through the duopoly. Good luck to the MPA people if that happens.

    And if that does happen, talk about a self-fulfilling nightmare that will have little benefit for MPA, Newsagents and more importantly from the ACCC’s perspective, for the end consumer.

    The whole thing is starting to sound like a bad joke going wrong.

    I too would encourage other Newsagents who are feeling let down by this MPA seemingly self-interest trial to also contact the ACCC and tell their story. Whatever the MPA is trying to do, they haven’t been able to convince a lot of Newsagents that it’s a good thing.

    My thanks also to the Newsagents who were able to attend the video conference.

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  11. MARK RICHARDSON

    I would like ANF members to comment on here as to what information have you received regarding the proposed trial by the MPA

    Have you received detailed written information as to the rules of this trial ?

    Has the ANF advised you in writing that early returns are not allowed except to correct an error made by the distributor ?

    I ask for your response on this as I am unsure the ANF has provided its members with such detailed information

    As the ANF are supporting the MPA with this application to the ACCC .I believe it’s important that the ANF’s members and all Newsagents are fully aware of the terms and can therefore engage in the discussion if they wish.

    Your response would be appreciated

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  12. Paul

    An email came out this afternoon at 3:34pm from the ANF which I’m assuming is in response to Marks post here. It appears that when Mark makes a post here they will email something out later that afternoon defending their position. I’ve noticed the pattern appearing with this issue. As far as I know there was no consultation. I certainly wasn’t asked about it. A simple direct email would have been enough asking my opinion or feedback but I don’t appear to have received such.

    Watching this unfold over the past fortnight I decided to cancel my ANF membership though didn’t get the time to call and give them the “Dear John” message but have put it on top of my things to do list Monday. I’m no longer going to pay for a representation that doesn’t actually represent me and it would seem has no interest in representing me. I would now very much like to see laid clearly on the table the income or “sponsorship” the ANF receives from industry suppliers and see where this money goes . I’m pretty P*ssed off at their ignorance tbh.

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  13. Peter B

    Fantastic presentation Mark.
    Hopefully the ACCC will listen to sense.

    If only the dickheads at the ANF were standing next to you on the side of Newsagents we would now be well and truly on the way to a fairer system

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  14. John Fitzpatrick

    All,

    This is my version of a failed attempt at a Magazine trial in SA for Distribution Newsagents.

    The ANF arranged a meeting of Distribution Newsagents in Adelaide for the 9th September 2014 to discuss a trial of magazine supply.

    Part of the requirement’s to meet the trial criteria, from the Magazine Distributors was that all Newsagents would need to be at the “Gold” standard with XIT.

    NO Distribution Newsagency in Australia could meet the standard, unless they were running a Distribution business through their Retail shop’s POS.

    The Distributors required the following information:
    All must supply sales for at least 2 months from each and every sub agent you look after and this list must include
    a. type of outlet ….
    – We asked for the Distributors to supply the criteria to determine the type of outlet, we also pointed out that defining a “type” of Subagent is something the industry really should do – it’s pointless if News & Fairfax have a definition different to say Network and Gotch.

    – NO RESPONSE TO DATE

    b. Product list
    Why can’t they use the data they have?

    – NO RESPONSE TO DATE

    c. Address of outlet

    – no real issue there.

    Following the review of this sub-agent data, GGA would provide a complete listing with average sales of all GGA titles received in the last 12 months.

    Network has now asked for “a template to populate current and historical sales/ volumes into for a starting point”, this was to be designed by Newsagents!

    However, Alf Maccioni (ANF CEO) has reminded Network if “they do not support this offer with their own resources for the project then Network, doing nothing, quickly will probably mean that Network will need to go direct to a large number of sub-agents, as SA newsagents may soon walk away from magazines.”

    SA Newsagents asked the ANF to go back to the Distributors and ask why they couldn’t use the existing XIT sales data. –

    NO response from Distributors.

    How could the Distributors not know (they all sit on the XIT Board and make the rules!) that the Gold standard was not obtainable?
    Most SA newsagents will send back files only 3 times per week – Gold requires at least 7 time per week.

    To be fair, parts of the above have been copied from an email, from the SA Manager to Newsagents who were to attend the meeting on the 9th September 2014.

    The above (at least in SA) clearly displays the ANF actively attempted to support Distribution Newsagents at a very early stage.

    The failure of any result MUST fall back onto the Distributions who it appears set up the trial to fail from the beginning, requiring unobtainable benchmarks.

    Newsagents at this meeting asked for two items to be taken back to the Distributors.

    1 Solve the XIT issue
    2 Why can’t the Distributors use the current data they have.

    There has been NO response from the Distributors.

    Trial in SA never started.

    The SA Branch of the ANF made an attempt to support Distribution Newsagents over magazine allocations.

    I have tried to be fair and honest to all parties in all of the above.

    John Fitzpatrick

    1 likes

  15. Dennis Robertson

    John,

    I take it this was a separate trial to the current MPA effort?

    Given that the ANF were seemingly fully aware there were trust issues with Major Distributors in that they knowingly set up the SA effort to fail. (that we don’t have POS links to any sub-agents is a no-brainer) — Why on earth then support this latest effort by MPA without making a serious attempt to consult with those who are the reason for their existence?

    It all seems to defy logic, let alone a reasonable practice by an association. Certainly it doesn’t appear (on the surface) to be anywhere near best practice for such an association.

    I do agree with your point that ultimately the SA failed trial rests with the major Distributors.

    1 likes

  16. Mark Fletcher

    The ANF yesterday afternoon emailed its members about the ACCC conference. The email demonstrates how out of touch the organisation is with newsagents as it did not explain the reason for the conference now did it acknowledge that every newsagent who spoke, spoke against ANF support. The email is ignorant spin. Here is the email:

    Yesterday, the ANF attended the ACCC pre-determination hearing into conducting a trial to better manage magazine supply in accordance with the application made by the MPA.

    The ACCC heard from a number of interested parties and will announce its findings in the next few weeks.

    “Members will be aware that the Magazine Publishers Association (MPA) has applied to the ACCC for an ‘authorisation’ which would allow its members plus Gordon & Gotch and Network Services to collectively run a pilot of proposed changes to the current magazine distribution model. In making this application the MPA members are acknowledging that there is a problem with the current magazine distribution model and are making a collective effort to address this issue. The ANF considers this to be a positive first step to addressing some of the significant issues that face newsagency owners and the broader magazine publishing industry.

    Members should be aware that:

    • the application currently before the ACCC is for a ‘pilot’ involving 20 newsagents who have agreed to participate;
    • the pilot is designed to provide the industry with better information about how to address issues such as the decline in magazine sales and product over supply; it does not involve any permanent changes to the current distribution arrangements;
    • any such permanent changes will be developed using the outcomes of this pilot.  It is proposed that these will be incorporated into a Code of Conduct;
    • any such Code of Conduct will need to be separately approved by the ACCC before it can be implemented;
    • the ANF and all interested parties will have further opportunities to be heard before any such Code is implemented;
    • the MPA has promised to be transparent with the outcomes of the pilot and the ANF will consult further with members following the completion of this pilot.

    “The ANF will continue to work with all relevant parties to ensure the system of magazine distribution is finally and most definitely improved and will advise members of the ACCC outcome once delivered,” ANF CEO Mr Alf Maccioni said.

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  17. Mark Fletcher

    Dennis, to the claim of lack of consultation, the ANF CEO at the conference referred to exposure on the trial in National Newsagent and their member email. Looking at this evidence, they do not reflect consultation.

    The ANF ought to have engaged in a national listening tour about the trial. I am sure they would have been told by newsagents that any support for the trial in its present form would be misplaced.

    In response to claims at the ACCC conference, they now strike a pose of hurt that newsagents would question them and offer the weak: any trial is better than no trial. Yes, this is the body which claims to represent newsagents … yet it is not listening to newsagents.

    1 likes

  18. Mark Richardson

    In the MPAs application for authorization to conduct this trial the MPA states it consulted with the ANF to set up the terms of the trial, that is in writing

    So what the MPA had was a very well packaged document with support from the ANF . If Mark had not applied for a pre determination conference, the ACCC would have view the application as being supported by the ANF which to the ACCC would appear be representing Newsagents

    Mark sought and was granted a hearing which provided the ACCC with an alternate view I have feedback from Newsagents that some ANF staff are angry that Mark took this action and the conference was held

    Last time I checked Australia was a free country and citizens have the right to express different views .

    Paul the ANF cannot back out of this situation they are standing side by side with the MPA on the rules of this proposed trial

    John you cannot defend the indefensible whilst you are looking at this purely from a distribution point of view.
    I believe you need to look at this from a whole of industry view . There are 3,500 Newsagents across Australia that’s a lot of families All Newsagents are my concern

    How can you explain the ANFs continued support to the MPA and the fact that as stated in the application the ANF worked with the MPA to support their application

    At the conference I put the question to the ANF CEO Alf Maccioni that Newsagents whom I had spoken to and are ANF members knew nothing about the trial some Newsagents told me they had heard something about it but couldn’t recall any detail .Mr Maccioni responded by saying “we have sent out emails and we put it in the National Newsagent Magazine” he also stated “I don’t know what the problem is ”

    Well I think there is a big problem, the information that I have seen which the ANF released is light on detail and does nothing to fully inform Newsagents as to what may occur if this trial is adopted

    I believe the ANF had a duty of care to its members to seek their input rather than jumping into bed with the MPA

    John you say the ANF consulted with its distribution only members in Adelaide . I would not call that industry wide consultation and as this is such a huge issue we need to look after everyone’s interests

    Dennis I agree given that the ANF knew distribution Newsagents could not meet the necessary it compliance ,it continued to support the trial , how can that be ?

    John on Thursday at the conference the ANF sat with the MPA in support of the MPAs application In fact the person representing NANA stated “that its great everyone is here talking about magazines and lets run this trial as any trial is better than no trial” what a simplistic view that is on this issue

    In fact the ANF could have sat on Mark Fletchers side and fought for and alternate trial or have this application modified they did neither

    If the ANF have copped flack over this and lost membership it should have a good hard look at itself right from the top down
    they are the authors of there own demise, not Mark Fletcher

    8 likes

  19. Bill Wareham

    Mark, an point of interest to come from the conference was that 6 NewsXpress stores are in the list of 20 trial stores.
    Do you know which stores, and what they were told to accept being a trial store.

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  20. Peter B

    XIT has been mentioned often in this discussion. I keep hearing about most newsagents not being XIT compliant.
    What do we have to do to comply?
    We use XIT, invoices come, figures go, but don’t know how we can be “more” compliant.
    What do they mean by non compliant??

    2 likes

  21. Mark Fletcher

    Peter, the realist is that around 50% of all newsagents on XchangeIT are compliant. The key requirements are accuracy of data and timeliness of sending sales data.

    The challenge is even compliant newsagents are overloaded – making the requirements appear a fools game to many.

    0 likes

  22. Bill Wareham

    Mark, on Thursday when talking of level playing fields Bauer mentioned they were willing to talk to any group regarding an agreed set of terms.
    Why not set up the Tower Magazine Category Management Group. I for one would sign up as a member. With a membership I would suggest greater than the ANF, we could then go to them with our numbers and your proposed terms.
    Anyone truly interested in category management would start with the principles of space, range and sales.
    Imagine a defined range for 750 pocket stores, 1,000 pocket stores etc. which would have a limited mandatory range and still have space for discretionary titles to cater for stores individual needs.

    4 likes

  23. Mark Richardson

    I agree Bill, unfortunately we have to deal with this application by the MPA back by the ANF I think a determination will be made in May so we can only hope we get a good outcome

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  24. Peter B

    We were an ANF member until recently. We decided to not fund the ANF who seem to be using our money against newsagencies to boost the power of the MPA.(Are they getting funding from the MPA as well? That would be like the USA supplying Arms to Russia)

    In an important issue such as this the ANF should have contacted members directly, sought imput directly from newsagents, and those points should have then been mandatory for inclusion for any trial to be backed by the ANF.
    The communication by the ANF was in my view poor at best, and they did not have the ability to see what impact the code of conduct would have on newsagencies without proper consultation.
    The latest release that Mark published here was
    :ANF Alert: Magazine trial underway.
    What crap!! Was it underway?

    There were only mentions in the April ANF news releases with no detail at all.

    In the November release there was this:
    The code would cover the following topics
    Target sales efficiency
    Consecutive Nil Sales
    Full copy returns
    Early returns
    Redistributions of Packs & singles
    New titles and launches
    Maximum shelf life
    Split deliveries

    So it covered these topics.
    In glossing over this it would seem the ANF were doing their job representing newsagents, so the possible adverse outcomes were not known to newsagents until Mark brought them up on this blog.
    There was no detail on each point as to what the outcome they would be seeking to achieve.
    There was no indication that it was an important issue at all.
    There was also no mention of being in bed with the MPA to help negotiate worse conditions for newsagents.

    It seems the ANF had no idea what they were getting into at all.
    For those at the ANF who are unhappy with the commentary here and the submissions against this trial and code of conduct in its present form, Mark Fletchers presentation and the submissions put forward to the ACCC are in response to the lack of due diligence by the ANF.
    Who do you really represent? Not me anymore.

    8 likes

  25. Mark Fletcher

    Te best way for newsagents to vote on the ANF actions is to quit their membership.

    Bill, I’ll think about the suggestion. Through newsXpress I have a mechanism for doing this which might be an appropriate next step for an alternative trial.

    13 likes

  26. Peter B

    Great idea Bill.

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  27. Mark Fletcher

    I like the idea of a set pocket size and centralised ranging as a trial. The challenge is the distributors don’t like it as it restricts their revenue opportunity.

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  28. Publisher

    My business is not part of the MPA. The MPA is a club of Bauer, Pacific and News. The three will do what they this is right for them first and dress it up as being good for everyone else. They have not talked to other publishers, they’d not even talk to distributor people until late last year.

    The trial is not something I agree with.

    My magazines are only sold in newsagents. I am slaughtered by early returns and when I speak to newsagents about it I am told the main reason for early returns it to manage cash flow and that it is not about my title. Based on that I am of the firm belief that the distributors themselves are the cause of early return behaviour by newsagents and that they themselves need to change if early returns are to be resolved.

    The trial the MPA wants to do will not help my publishing business and I do not think it will help newsagents. If the MPA was serious about helping everyone as it claims in its submission to the ACCC then they would have consulted with other publishers and put together trial that benefits everyone. Instead they created a monster and put it in a pretty dress.

    I support the alternative trial proposed by Mark Fletcher.

    13 likes

  29. Brett

    Publisher,

    Thanks for being part of the discussion.

    Early returns are indeed the distributors problem, we as retailers, want to sell lots of magazines, we want to sell more this week than we did last week. BUT. That does not mean we happily receive lots more magazines that we CAN sell. It does not mean that we will take a magazine that has not sold for months. It does NOT mean that we want magazines that are on their third trip around the nation with stickers from the old newsagent still attached. It does NOT mean that we are willing to be the cash cow for someone else’s business model. It does NOT mean we will allow a magazine to sit unsold on the shelf for months on end.

    From my experience if your magazine sells, it gets 100% support, if it does not we make room for a new title that might sell. If it is a new title we will give it a go, for months, if it does not sell it has to go. If we just need one copy for a customer, please just give me one. If I request a quantity, please give me that, don’t allow the distributors to change it to whatever they think.

    Look at the data we supply daily and that we pay other people to ignore.

    Its not rocket science.

    8 likes

  30. Mark Fletcher

    Too often publishers do not get the data we provide.

    1 likes

  31. Dean

    Mark, that made me think – given that a lot (should be all) newsagencies are computerised, how hard would it be for newsagencies to generate the magazine reports to be sent for collation. Could tower for instance get sales figures that could be presented to publishers showing something as simple as sell through rates, or similar. Something similar to the benchmark study you do. So without reference to an individual newsagency, a publisher could see 1. how much supplied 2. number of returns and maybe 3 number of newsagencies supplied to. Might be too much work, but might be worth the effort if publishers can see exactly what the situation is.

    0 likes

  32. Bill Wareham

    Early returns is a symptom not the problem.
    When the average newsagent has 15 weeks stock cover and receives in excess of another 2 weeks stock cover each week, somethings got to give.
    The MPA trial is smoke and mirrors and will not solve anything. In fact it is proposing newsagents accept efficiency rates as low as 25% for small publications.
    Every magazine remaining after your bill is paid is cannibalising the profit of 3 sold.
    That’s the problem.

    3 likes

  33. Mark Fletcher

    Dean we could certainly do that. I know of some publishers who today get sales data because of what they have learned on this blog. It is available to them if they ask for it or maybe, in some cases, pressure for it.

    The challenge is there are some publishers who do not care, where the model is to ship out more than they sell. In a couple of cases I have heard about it is so they can charge what they charge for advertising while in some other cases it is because of the knowledge that unsold stock is available to them for reissue or other purposes.

    Do I trust that it would change things if we provided sales data? In some cases but not many.

    I am about to announce a new round of Newsagency of the Future workshops. These will include a section and discussion of the magazine distribution model.

    Bill, yes, 100%. early returns are the symptom and not the problem.

    1 likes

  34. Dean

    Thanks Mark, i have to admit i did not think about circulation numbers for advertising. That is an interesting point. Trust is definitely a big problem across the board here.

    1 likes

  35. Mark Fletcher

    I had one publishers recently point to a competitor of theirs, in a conversation with me, about this flooding of newsagencies with stock to bolster advertising revenue.

    2 likes

  36. Peter B

    So

    The distributors are in a battle to inflate the distribution figures to lure publishers to them so they can extort extra income from the publishers.

    The publishers are happy to inflate distribution figures as well to extort extra income from advertising.

    The magazines are sent to newsagencies who are the first ones that pay for the magazines in the whole chain. Money is only recouped by sales or the return of the magazine.

    The distributor gets paid by newsagents and the publishers.

    The publishers get paid by advertising and maybe distributors?

    What a system. Corrupt at most levels.
    Maybe this should be explained clearly, if that’s possible to the ACCC.

    7 likes

  37. Dennis Robertson

    In a fully transparent world, having sales data available to Advertisers would be the go. In this scenario, it would really set the cat amongst the pigeons.

    3 likes

  38. allan wickham

    Maybe we should send photos of shopping trolleys full of topped magazines to the advertisers in those same magazines……

    7 likes

  39. June

    Allan, I consider the wastage (returns) to be a huge issue that is like the elephant in the room – it is there but it is never mentioned even when it is so huge.

    3 likes

  40. Mark Fletcher

    The wastage is a massive issue. I have raised it with the Greens as a means of getting them looking at the gross oversupply issue.

    5 likes

  41. Dennis Robertson

    Following release of the minutes of the pre-decision video conference, the ACCC has said “Please provide any further submissions you wish to make on or before COB 14 May 2015”.

    I’m not sure if that means anyone or just those that participated in the video conference?

    ———————————————-

    One interesting take from the minutes is the record of what Ms Azer had to say towards the end:-

    “Ms Azer said that a pilot was needed because reducing the numbers of magazines distributed would result in a loss of distributors’ income under the current arrangements.”

    So bearing in mind that the Distributors already have the sales data from Newsagents that would enable supplies to more closely match sales, could the only reason for gaining ACCC approval for the pilot be to enable Distributors to find a way to recover the loss of income?

    And how would they do that post trial?

    Put out more ‘new’ titles that match the rules….?
    Prevent early returns as laid out in their rules….?

    I don’t really know, time will tell I guess.

    All subject, of course, to the ACCC agreeing to or amending the trial. Clearly they thought enough of the newsXpress submission and request to warrant further probing.

    Given the mistrust on the part of Newsagents at the conference and elsewhere towards the Distributors, the ACCC must have come away with a sense of something not being quite right….

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