I get queries from many people through this blog asking about software for newsagents. Click here for current pricing from my Tower Systems business. More than 1,400 newsagents use this software. We also have pricing for newsagents switching from other systems.
GNS, the major stationery wholesaler used by newsagents on the eastern seaboard, has advised newsXpress that it is banned from exhibiting at the annual GNS trade shows in Melbourne, Sydney and Brisbane this year.
GNS controls the Newspower marketing group and says that it has banned newsXpress because it competes with Newspower. This is despite many newsXpress newsagents sourcing stationery from GNS, myself included. I am a shareholder in GNS as are many newsagents. Acquiring shares, or units as they were known, was part of the requirement for opening an account.
newsXpress has exhibited at the GNS trade show in Brisbane for five years and Victoria and New South Wales for two.
This decision by the Board of GNS demonstrates that key stakeholders in the newsagency channel do not understand the importance of competition. It will not help the broader newsagency cause when it lobbies government on competition related matters.
Banning newsXpress could be seen by some as an indication of fear among GNS Board members about the success of newsXpress over Newspower. In reality, these marketing groups serve different constituencies. newsXpress will only ever be a boutique marketing group with no more than 250 members. With 110 members today, it is a long way off the 1,000+ members of Newspower. That difference alone makes the decision by the Board of GNS even more curious.
I will continue to purchase stationery from GNS and support its seasonal marketing activities – despite this unfortunate and ignorant snub.
I am in Sydney this morning and was struck by the difference in news and magazine retailing on the streets here compared to what I saw in Hong Kong last week. While there are some excellent newsagencies in Sydney, few are on the streets, street front real-estate is left to convenience stores such as this one I walked past this morning. Newspapers and magazines are represented but they are cramped – you need to climb over a photocopier to get into the tiny browse space.
This is a space newsagents could own – street level news and magazine retailing in our capital cities. All it would take is the development of a plug and play format built around convenience but with news and magazines as a key product offering. This is what Circle K and 7-Eleven do well in Hong Kong.
Two more newsagents have contacted me yesterday to advise that they are handing their runs back to the publishers, each saying they can no longer afford to run the home delivery side of their business. Each cited the drop in delivery fees and little change to cover price in ten years as the cause. One has exceptional data to backup his claim, showing that the home delivery side of his business is 23% worse off today than it was ten years ago and that it is losing more than $300 a week.
It would be appropriate for representatives of all parties who care about the newspaper home delivery system – newsagents, industry associations, delivery contractors, publishers and home delivery customers – to resolve the issue of falling net return before more newsagents decide it is no longer a viable business.
To balance this report, I’d note that in some states groups of newsagents are getting together and evolving a new model buying up territories. These are the businesses to watch – smart operators better managing costs and leveraging economies of scale from a more modern home delivery model.
The Daily Telegraph reports that the District court in NSW has found that a newsagent was negligent in his obligations surrounding handling a division 1 prize and is therefore liable for the $500,000 prize.
While I do not know the detail of this case, I do know that NSW Lotteries following best practice for managing large prizes could have seen this problem avoided. In Victoria, for example, lottery agents are not involved in processing large prize claims – the screen does not even show the value of the prize when the ticket is scanned. In NSW, the process is more lax and even though it has been changed, it remains easy for fraud. I would have thought that since NSW Lotteries controlled the process it had some obligation in relation to this case in that it could have adopted worldwide best practice and removed the temptation altogether.
It is good to see the NSW newsagents association supporting the newsagent involved.
First there was EPIC, a cool short that predicted the future of media. Now, a couple of years on, comes Prometeus: The Media Revolution, a short from Casaleggio Associates in Italy – taking us up to 2027 and a world where Google owns Microsoft, Amazon has acquired Yahoo… Click the image, it’s worth a watch, if you,re game.
Newsagents wondering about their future business model need only read the article on Page 48 of today’s Australian Financial Review about how Michael Hannan is spending some of the $500 millioin paid by News Ltd for his IPMG publishing company. Of note is his re-launched Homehound site – it’s the best real-estate site in Australia at present in terms of the user interface.
Hannan clearly believes that online is a key growth area despite that categories such as real-estate are already well covered by the likes of Fairfax and News.
I wonder if Krystal, the girl who has almost single-handedly made Zoo Weekly the roaring sales success that it is, is taking a pay cut like newsagents do each time they do these half price deals. I suspect not. While the publishers will tell is that the half price deals are an essential part of their strategy and that newsagents benefit from the sales, the reality is that all stakeholders ought to participate including the talent.
I have Zoo in two locations, one a high traffic high cost location. These half price deals make the title loss making that week and they do not lead, in my newsagency, to sufficient flow-on sales growth to justify the deal.
That said, Zoo is successful and Krystal is the most valuable (and used) cover girls launched in the last year.
Sales of these and other UK weekly magazines are flat in some areas and falling in others yet we continue to see titles added to the segment. I suspect that one reason for this growth is the free retail real-estate newsagents provide for magazines. If these titles had to deliver a minimum return to newsagents I suspect we would see a 50% cut in range.
This is another reason newsagents need a magazine czar who controls the titles which can access the valuable newsagent retail real-estate asset. Magazine distributors are unable to provide this service.
As reported at PaidContent, Marcus Brauchli, Managing Editor of the Wall Street Journal, wrote to staff last week announcing changes “completing†the integration of their online and print newsrooms. There is considerable talk in the offices of publishers and at publisher conferences across the globe about the need to integrate print and online newsrooms – they refer to this as the newsroom of the future. The memo from Brauchli makes the reason clear when he talks about
the profound changes sweeping the news business
and says:
… we must adapt constantly to do if we want to stay competitive.
This is further evidence to newsagents that the print media world has changed despite what publisher representatives say to us. I have been to publisher conferences in Paris, Vienna and Sydney over the last six months where publisher representatives have been open about the fading role print has in their business plans – unfortunately publisher representatives will not say this at newsagent conferences as it would not sui them to have newsagents fully informed about their need to urgently migrate revenue from print to online.
As publishers are doing, newsagents must navigate their future model. We can begin this by talking about the newsagency of the future and ensuring that this is the key agenda item at all conferences and meeting of newsagents. A small number of entrepreneurial newsagents are already playing in this future space. Too many are not – they are waiting for publishers and others to provide leadership. This will not happen. Newsagents have to solve this challenge using their own resources.
The Sunday Age reports that the Sensis (Telstra) owned Trading Post is for sale – their newspapers and online business. As I have posted here recently, over the counter sales in newsagencies of the Trading Post have been falling in recent years – as much as 25% of the last year. The Age report says that Sensis reports a 7% decline in revenue in the six months to December.
The days of classified ads in print are over. Counting eBay and all other online sites, we know that 100,000 ads are placed online every day by Australians for anything from a CD to a house and while some of these ads are placed on multiple sites, the majority are not getting into print. Online is the game in town.
I know that many working for newspaper publishers will disagree with me. They have to – they want newsagents to believe that the print classified model has legs because they need newsagent support. Time will show that I am right just as it is already showing this to be the case in the US.
Advertisers of CDs, books, cars, homes and jobs what a faster outcome than a newspaper can provide. They also want to represent their items better – with photos and video. Today, the print edition of the Trading Post exists only to promote the brand of the online website, it’s relevance is coming to an end.
If I were the folks at the Trading Post I would move to a free model. A nationally distributed free newspaper would at least maintain the brand and provide an opportunity for a more active migration to the online edition.
The fall in stakes of the Trading Post is a reminder to newsagents about their need to have an online connection. This is one reason I created Find It online classifieds. We are writing to newsagents this coming week with an update including news about the revenue share with newsagents once we come out of beat in a few weeks. Smart newsagents will quickly make more from Find It for no financial outlay than the make from the Trading Post.
I have just finished reading The Dip by Seth Godin and highly recommend it to newsagents. Don’t be put off by it’s small size – 80 pages – or that it looks like another ho hum American guru book, The Dip is a good read. It is a book about that moment in the middle of something you are doing where you face giving up or working harder to achieve success. It is the make or break moment of your day, a project or something even bigger. How we respond determines our success.
In The Dip, Seth Godin encourages us to quit – to quit if you are not going to get beyond The Dip and achieve success in the project, relationship or other activity you are stuck in. His approach to strategic quitting is refreshing.
This book is relevant to Australian newsagents because so much time every day is spent on what I would call busy work, stuck in the rut of The Dip. Newsagents kicking goals in their businesses are those who have quit some of this busy work and used the time saved to get through The Dip to greater success.
In my own newsagency I would say that selling the newspaper home delivery round is a good example of quitting unproductive activity so the business can get through The Dip. This decision to quit improved our bottom line and released considerable manpower resources for use in building the retail side of the business. While we did this prior to reading Seth’s book, we now have a useful context through which to consider this and, indeed, see other opportunities for quitting so that the bigger goals may be achieved.
The Dip is not for process workers – people who have their heads down and are only interested in being busy with what is in front of them. The Dip is for entrepreneurs, those who want to excel and those looking beyond the horizon.
I heard a story recently about a newsagent for whom things had got too much and he took his own life. The newsagency channel being what it is, the story is spoken of in hushed tones and without all the facts being represented – how can we really know what leads someone to such a step?
Beyondblue offers excellent resources for people feeling that life is too difficult. Their advice sheets cover a range of helpful topics including how to help someone with depression and reducing stress.
Given the challenges of consolidation and the uncertainty some newsagents feel because of changes in the media landscape, it may be timely for industry associations and other groups to facilitate sessions where newsagents can navigate their concerns before they become too big. I’d certainly support such an initiative.
This book, Thumb-sucking and Dummy-sucking by Dr Elsie Mobbs which arrived in store yesterday is another example of a title which ought to have been denied access to the newsagent channel. Speedy Distribution sent us two copies: RRP – $14.00; our price $10.50; on sale period – 6 months. These numbers don’t work, especially given that this book is A5 in size and I only have two copies with which to create a story. It would get lost in our magazine racking. We already have more titles in this category than our space allocation can professional handle. Speedy Distribution is abusing their relationship with newsagents by sending the title and newsagents are fools for allowing this.
If authors and publishers of books want access to our channel they ought to pay a minimum of 40% commission. For unknown authors where, we are investing in building their profile, we ought to be paid a stocking fee to cover our space for the entire on sale period. We have to remember that the retail newsagent channel is has the upper hand, our network is valuable.
This is why newsagents ought to appoint a magazine czar to control which titles access our retail network.
We have contacted Speedy Distribution asking that they collect t their cost these books from our newsagency and immediately credit us for the two copies supplied.
I have no gripe with Dr Mobbs or her book. My gripe is that the newsagency channel has been used to distribute a title which will lose money for newsagents and that Speedy Distribution would have known this when they decided to use us for this title.
newsXpress has announced its first free seminar for people considering buying a newsagency. An ad is in The Age today. Anyone prospective newsagent is welcome to attend. Registration is done my emailing sales@newsXpress.com.au.
I am a Director and shareholder in newsXpress. The idea behind these seminars is to provide some insights into newsagencies and their operation prior to reaching a purchasing decision. With more than 100 stores in the newsXpress group we have a broad range of experience and expertise on which to draw in developing the content for these seminars.
The photo shows one of several stacks of overseas crossword titles which arrived in our newsagency today from magazine distributor NDD. We have advised NDD that we do not wish to receive overseas crossword titles from them yet they continue to supply us. Today’s supply has a retail value of $404.80. While we are early returning all of them, the magazine returns processing being what it is we are likely to be out of pocket to the tune of $303.60 for at least a month.
NDD has data which shows that these titles will not sell; sufficiently to justify what they have sent. There is no data based justification for their action. Supply can only be based on the cash-flow requirements of NDD.
If I extrapolate the cost of these dud titles from NDD today across all newsagents, I’d suggest that the cost is in the order of several hundred thousand dollars – money sucked out of newsagents under false pretences. Maybe I am wrong. I was asked about this at the end of one of my presentations at the ANF conference last week and made a similar point about overseas crosswords. The NDD representative in the audience did not challenge me.
At Tower Systems’ head office this morning we participated in a briefing with News Ltd management about IT changes they are driving as part of their Data Collection Project. We are supportive of the project because, if executed properly, it should result in better business outcomes for newsagents. I’ll respect agreed confidentiality and not publish the detail of the discussions.
While it commercially suits me for newsagents to rely more on technology, the reality is that any advancement which eliminates manual processes has to be good for newsagents. For the first time it will provide newsagents and News Ltd a common database and thereby improve service of home delivery customers.
At a meeting with Tower newsagents in Perth yesterday, the management of partworks supply was a topic of hot discussion. The story is always the same – newsagents love partworks but are angry at not being able to get sufficient supply to service customer standing orders. This is despite the magazine distributors being given standing order data on a daily basis by newsagents.
I heard a story yesterday of one customer who is two pieces away from completing the dolls house and the newsagent is unable to source the required parts from the magazine distributor.
I know when I take these issues to Peter Bissett at Bissett magazines – the major partworks importer in Australia, he does his utmost to resolve them. However, there are too many complaints for them to be glitches. Partworks problems are systemic and newsagents and their customers are the victims.
So what’s the answer? The magazine distributors ought to start using the data they asked for years ago – they ought to supply newsagents to at least the pre-sold quantity, thus allowing newsagents to actually serve their customers. I’d also like to see newsagents have the opportunity to purchase partworks on a firm sale basis – I know in my newsagency we would do this, for a better commission, if it guaranteed supply. We push partworks hard and are frustrated with the time we lose having to chase stock from the broken partworks supply chain.
Next week I will post part 2 of the problem with partworks.
The Sydney Morning Herald is seeking content from would-be citizen journalists with it’s above the masthead pitch. They have setup a mobile phone number to which content can be sent by SMS. The SMH move is a good example of newspapers embracing new media technology to better connect with their community.
I am sure it’s been there for a while but I only noticed the promotion of www.youplay.com on the cover of all Lovatts crossword and puzzle titles yesterday morning. Lovatts are smart to promote an online place – it makes sense. If they can attract customers to their website and appropriately monetise the traffic, this will be a more commercially valuable supply chain than print and retail through newsagencies.
In just about every magazine now publishers are driving eyeballs online yet newsagents seem to remain oblivious to this, believing newspaper and magazine publisher spin that it is business as usual. While between publishers and newsagents it is business as usual, the reality is that there is another supply chain being developed and for newsagents that is not business as usual.
Small Business newsagents in Western Australia are being forced to carry the cost of marketing campaigns run by The West Australian newspaper. They have established a fighting fund and have engaged lawyers to fight on their behalf following refusal of management at The West Australian to give back what they have taken away.
The current 26 week home delivery deal for requires newsagents to deliver The West for no delivery fee, leaving the newsagent to rely on cover price commission to cover distribution costs and provide a profit margin to the business. The problem in WA is that commission for newsagents is lower than elsewhere in Australia. I have heard of newsagents receiving as little as 16% commission – rarely is it above 20%. Back home on the eastern seaboard newspaper commission for newsagents is 25%.
By not paying delivery fees to newsagents for this subscription offer, the publisher of The West is taking around 60 cents away from the newsagency for each new customer. While that may not sound much, to a small business relying on this fee to cover labour, fuel and management costs it is significant. Newsagents can’t afford to lose this fee.
Newsagents were not told of their loss of a delivery fee until after the promotion commenced.
The West, on its pages, champions small business issues yet behind the pages they are ripping small business newsagents off. They are making newsagents carry the cost of their marketing strategy. The West ought to carry the cost of their marketing and not small business newsagents.
In Perth today I have talked with several newsagents about this issue. The financial and emotional cost to newsagents is significant. Some are at breaking point. It is a catalyst for at least one newsagent having their territory back to The West after decades of service.
The special issues of BRW interrupt the weekly display and promotion of the title and I suspect this impacts the sales of the regular issues.
Each special issue comes with plenty more point of sale material than the regular issue and this pulls consumer focus as the photo from my shop shows.
The special issues also stay on the shelf longer and this can make regulars blind to the masthead.
I had a customer yesterday ask me which issue they should buy – they had been sent in by a friend to buy BRW without instruction on which issue. Buy both was my answer.
This type of plain white cover with some text is usually reserved for restricted (adult) magazines. Some bright spark decided this was the best way to communicate that the pack contains the current and a past issue of PC Advisor.
I suspect that the editorial folks will not be happy when they see their cover has been covered up.
Customers are not happy at the cover-up and I suspect that will probably be reflected in sales this month.
