News Ltd has refused a request from Victorian newsagents to increase newspaper home delivery fees. The last increase was in July 2005 and that was the first increase in five years. The July 2005 increase did not cover cost increases incurred by newsagents over the five years.
News Ltd controls all the revenue earned by newsagents for the home delivery of News Ltd newspapers. One day News Ltd tells newsagents to act like business people and the next, through a decision like this, they treat newsagents as subservient slaves. News needs to decide what type of newsagents best serve its needs. Maybe the decision announced this week demonstrates that.
In the pages of the Herald Sun we often read about injustice. I best this poor treatment of small business newsagents and their families will not get a run.
The control exerted by News Ltd and other newspaper publishers over the fees charge by newsagents does not reflect fairness or best practice competition policy.
There is a critical mass in the home delivery model at which you can hope/expect to break even.
Current home delivery fees permitted by the publishers would put this at roughly 700 papers per day.
Telemarketing, dick-stick advertising and the discount rates currently on offer are driving existing “newsagent” customers unwittingly to subscriptions but most I have spoken to who have contemplated converting have no idea that the newsagent generally loses money on these deals and are horrified when it is explained to them. Thankfully most of these customers have elected to stay as “newsagency” customers as the thought of no home delivery horrifies them.
In a town where an increasingly aged population looks upon newspaper delivery almost as an essential service, it is a less than comforting thought that at some point in the not too distant future we will have to consider abandoning home delivery or find some way around the dictates of a shiny-arse domiciled in the comforts of Southbank who probably gets free home delivery as part of his/her package.
The irony is that of the hundreds of customers I have spoken to, the vast majority would pay an increased home delivery fee to guarantee an ongoing service but the shineys of Southbank won’t have a bar of it.
With little or no chance of creating a distribution business per se, I am faced with the unpalatable prospect of either dropping home delivery altogether or finding a way around the News Ltd-driven rates. Neither outcome is what any newsagent should have to choose!