A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Month: July 2007

Lost magazine sales

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This promotion in the Herald Sun on Monday of the Industry Super Funds superannuation guide – The 50 Crucial Answers You Need – worked a treat. We have been asked by at least 20 customers now for the pocket guide. The distribution experts at NDD, distributors for the title, decided to not send us any. It seems they are making scale out decisions to my newsagency based on comments made here. (I’ll have more to say on that next week.) Had NDD checked with us we would have asked for 50 copies. My newsagency is in an area dense with self funded retirees so the book was always going to sell well. We have chased copies but NDD sale they have none left.

To the folks at NDD, given that you read this and decide what I want based on comments here – talk to us about new titles like the folks at Gotch do. You will find that we say yes to most.

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magazines

Outlook predicts flat growth for papers and magazines

Reuters is reporting that the PricewaterhouseCoopers’ Global Entertainment and Media Outlook expects: combined spending on Web advertising and fees paid by U.S. consumers to Internet providers to reach $78.4 billion by 2011, up from $47.2 billion in 2006, a 10.7 percent average annual growth rate. An amazing growth forecast. The report (cost US$995) does have some okay news for newspapers and magazines. They expect 3.6% growth in magazines in the Asia Pacific region between 2006 and 2011 and growth of 3.4% for newspapers for the same period.

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magazines

Fifi and Dora lead holiday push

fifi_dora.JPGWe are using the FiFi and Dora partworks released this week to headline a pitch for school holiday attention – this is the first wee of a two week break for schools around us. We have the stock front of the shop in a high traffic area – near our other partworks which continue to sell well.

I am not sure if the TV spend has increased or I am watching more TV but I am seeing more partworks ads on TV than I can recall in years. That these are tagged exclusively to newsagents is fantastic – I smile every time when I see an ad.

The efforts of Gotch and Bissett Magazines to ensure we have enough stock to promote these well is appreciated.

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magazines

Aussie bike site sold to special interest publisher

Future plc has announced that it has acquired the Cycling News website from Knapp Communications for AUS $5.25 million. Cycling News was started by Australian economics professor Bill Mitchell in 1995. He sold it in 1999.

According to the announcement, traffic to the site is booming:

Traffic to the site continues to grow significantly – for the year to June 2006, Cyclingnews.com attracted an average of 30 million page impressions per month, with an average of 500,000 unique users per month. Latest data for year to June 2007 is expected to show a further substantial increase on these figures.

I don’t know about other newsagencies but my shop has four hardcode cycling titles and a raft of mountain bike titles. I see the acquisition as a trend in the specialty magazine space. It will drive advertisers from print to online and ultimately see fewer of these titles on the shelves.

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magazines

News Ltd refuses fee increase to newsagents

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.

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Newsagency challenges

Digital newspaper delivery

digitalbox.jpgIn a wonderful commentary on change, Scott Walker, associate editor at The Birmingham News has embraced new technology in a package which is a homage to newspaper distribution in the US with this digital newspaper box.

His brilliant invention, made from an old newspaper honour box, a Mac Mini and a flat screen monitor, is a digital newsstand that grabs news pages from the internet to display them where print newspapers used to be.

As Walker says at his blog explaining the project:

Sure, I could get the news on my desktop computer or iPhone (yeah, I wish!), but as a newspaper editor, I’ve got a soft spot for tradition.

Walker goes into considerable detail on how he made the box.

Walker’s digital newspaper box is very cool.

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Media disruption

202 garage sale ads

Our Find It online classifieds site has reached 202 garage sale ads this reflects 13% of the number of ads at the biggest garage sale site in the country. Offering free garage sale ads is a great way for newsagents to promote their community credentials in partnership with Find It.

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Online classifieds

Free gift voucher software

Warning: this blog post is a shameless plug for Tower Systems.

As a Happy New Financial Year gift my software company is giving all 1,400+ newsagents using its newsagency retail management software our new Gift Voucher software FREE. Using this software, newsagents can create and manage gift vouchers with ease. Our trials show it can be used to increase sales without cost to the business.

The free Gift Voucher software offer is available for two months after which the price will be $795.00. All Tower newsagents need do is email our help desk team and they will send it to you.

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retail

eBay launches classifieds in the US

eBay has launched its Kijiji classsifieds business in the US according to this report from cnet. The New York Times slant on this is here. Kijiji is well established in Canada, Germany, Italy and Taiwan.

This is a huge move since eBay owns 25% of the hugely successful Craigslist in the US. Craigslist operates in Australia as well.

eBay owns gumtree which offers free classifieds in Australia.

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Online classifieds

The Age gets better at stuck on ads

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I missed this stuck on ad in The Age on Saturday as it was not on my home delivered copy. At least this time they are not covering the masthead or a headline.

As a retail newsagent I wish I could offer my regular customers a deal like this. All this promotion seeks to do is shift people from being my customers to home delivery – higher cost and less of a return from anywhere else.

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Newspaper marketing

Just titles in decline

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Sales of the various Just titles are flat in some areas and falling in others. Such is the impact of all manner of websites offering more timely service. I took a look at the sales after noticing less browsing on Saturdays – the busiest browsing day of car, bike and parts related titles in my newsagency. I talked with several others yesterday and their sales figures match mine.

I am not complaining. I see it an inevitable change. The challenge is to respond to change over here by driving change elsewhere. Car and related title browsing was habit based for decades. We need to replace the traffic with other habit based business. This is why I and others are focusing on art supplies, ink and toner, beefing up home office coverage and partworks. All are currently strong categories – a strong presence will deliver good habit based traffic.

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magazines

Newsagent whacked by publisher over home delivery

Following a thorough analysis of all costs associated with the home delivery side of his business, another newsagent has handed back the territory to the publisher. While only small, around 100 newspapers a week, the run was operating at a loss of $9,000 annually.

The newsagent proposed to the publisher that he develop his sub agents by investing in display and other materials for their businesses and that he invest in his on business to increase newspaper sales. The plan was well thought out down to a budget.

The newsagent presented his business plan to the publisher and expected their agreement given that the small number of customers could be serviced elsewhere.

The publisher responded by taking not only the home deliveries but the sub agents as well as making the retail side of the newsagency a sub agent.

While the publisher may have contractual rights, such action does not make sense. They have turned their back on someone wanting to grow newspaper sales in favour of maintaining tradition.

Publishers say they want newsagents to become business people and when one does they cancel their contract and send them to sub agent jail.

Where is the business sense in that?

In this specific situation, the publishers have demonstrated that business skills are not important. For an industry in crisis as Rupert Murdoch calls it, such action is disappointing.

Publishers need to embrace the whole pie of deregulation and not just the pieces they like.

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Newsagency challenges

Anger at 10% off stationery offer

Several Victorian newsagents have contacted me following this post revealing the 10% discount on stationery being offered to Victorian newsagents joining Newspower in July. This Victorian only offer was news to GNS offices in Sydney and Brisbane. One question is if GNS Victoria has the funds for such an offer why not the other states. Another comment was – why is GNS using funds from all newsagents to try and get them to join the marketing group it controls.

I’m conflicted in this in that I am a Director of newsXpress. However, I am also a GNS customer and unit/shareholder of 11 years standing. I am not happy that my money is used in this way.

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Stationery

The question of newspaper home delivery

I received call yesterday from a newsagent considering selling or even giving away their newspaper home delivery run. While I am getting two or three calls a week from newsagents considering such a move, this one was different. As a second generation newsagent who had grown up in the business, their main concern was the appearance that they may be betraying the newsagents by getting out of distribution. They didn’t want their decision to shake the confidence of others.

The considerations for any newsagent considering selling off or quitting their distribution business have to local and surround the economic viability of the distribution arm of the business: territory size; newspaper mix; cost to service etc.

The chap I spoke with yesterday was like most considering retreating from distribution to focus on retail, they do not want to make the move but the falling return, in real terms, is forcing their hand.

When I was on the ANF Board in 2004 I and two other Directors met with senior executives from Fairfax several times to review the results of their national KPMG study into the economic viability of newspaper home delivery. While I will not breach confidentiality, it would be fair to say that the decisions being taken by some newsagents today to quit distribution would not surprise many newspaper publisher executives.

While the KPMG study was thorough and enlightening, confidentiality kept the results from newsagents except in somewhat meaningless summary form.

On the one hand publishers say they need the newsagent channel. On the other hand they control all of the key business levers except for the amount of labour the owner puts in.

If publishers want a viable newsagent distribution channel they need to review the fees they permit newsagents to charge. They also need to stop making newsagents carry any cost of excessive publisher subscription offers.

This is what it comes down to. The commercial viability of the home delivery business. Newsagents and publishers ought to be in active dialogue about this at a grass roots level. Publisher representatives need to be as open as Rupert Murdoch in discussing possible future news models.

Many newsagents, like the chap I spoke with yesterday, want to remain in newspaper distribution. They respect and enjoy the tradition. They like that it is local. But they need to feed and clothe their family.

Some entrepreneurial newsagents have banded together and created exciting new home delivery models – showing how home delivery can be viable. Their success is well deserved.

Maybe we need to let go of the local newsagent delivering newspapers altogether because the publisher controlled pricing only works at the consolidated mass operation level.

This is an important debate for newsagents.

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Newsagency challenges

Check your local cafes

Picking up a coffee on the way to the office this morning I found another newsagent losing magazine sales now that their local coffee shop is given copies of Cleo, Harper’s Bazzar and other magazines free by Avant Cards free each month. The same coffee shop buys six newspapers a day, I wonder if they will be next.

While I accept the publishers need to enter into whatever arrangements are best for them, to chip away at the newsagent channel will not serve their interests in the long term.

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magazines

Dog and cat cards

birthday_dog.JPGWe get offered different products at our Sophie Randall Cards and Gifts shop compared to the newsagency. Take for example, this from the Dog birthday card. It is part of a range we have never seen before in the newsagency. We have the range in the gift shop and it is selling well. People like that there are sympathy cards for a pet which has died as well as birthday cards for a dog or cat.

Okay, these cards may seem odd to some – our customers are happy knowing the range is there.

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Greeting Cards

Easy selling increases phone card sales

We have been selling more mobile phone recharge and calling card access and have tracked this to the direct link from our point of sale registers – we don’t have to queue at the Dialtime terminal any more. It also means we can sell multiple cards per sale and sell other items in a sale.

What’s interesting is that the easier sell and time saved appears to have combined to drive the growth.

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Uncategorized

Pacific acquires Time titles

The decision by Pacific Magazines, part of the Seven Media Group, to Who, Practical Parenting and Bride To Be and to licence InStyle is good news for then titles and good news for newsagents. Pacific has an excellent track record supporting the newsagency channel and newsagents respond by providing good support for Pacific titles.

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magazines

Tax pack fun

tax_pack.JPGWe are embracing tax season by putting the Tax Pack front and centre on our dance floor. We are linking the Tax Pack with our newsXpress Tax Time Bonanza! sale.

People who buy stationery and pick up a tax pack go in the draw for a free printer valued at $250.00 or a Laptop computer bag valued at $100.00 or $250.00 worth of Xbox games.

We are having some fun with it being Tax time and the handing out of Tax Packs. We figured it is better to embrace the distribution of Tax Packs than stick them in a dead spot and tell customers where they are. Now we have a pitch which should lead to some additional stationery sales.

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Stationery

Brand BRW

brw_june30.JPGI am no brand expert but I would have thought that the current BRW offering would confuse consumers. As this photo from Saturday shows, we currently have three BRW issues on the shelf. The Rich List issue dominates but has been there long enough to make browsers blind to the offering. The new flagship edition is to be on the shelf for a month. Under that we and this week’s edition – lost in the mix I’d say.

Sales decay data for my shop shows that the flagship editions do not warrant such a long shelf life.

I like BRW. It’s a good magazine. However, I suspect that the brand has lost its way with these various flagship editions. Certainly from a retail perspective they pull focus from the weekly sale.

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magazines

Chasing liquorice allsorts

darrell_lea.JPGDarrell Lea liquorice and liquorice allsorts are their top sellers and that we are the only outlet in the centre brings us some traffic we would otherwise not get.

It is frustrating therefore that liquorice allsorts have been out of production for months.

One customer commented that if we can’t tell her when they will get back in she will stop checking. That’s some amazing brand loyalty – well deserved, if only I could get the product.

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confectionary

Are we over Paris Hilton?

over_paris.JPGI wonder if Australians are done with Paris Hilton. I ask because sales for Who in my newsagency this week are the lowest I have seen in months for the first two on sale days.

It was a comment from a customer yesterday which made me check. I overhead one girl talking to a friend who picked Who up to purchase, don’t get that, who wants to read about her, she said.

We are promoting Who in the usual way, co-locating in the regular display as well as in a high traffic area at the front of the shop. Sales of other titles are steady so what is happening with Who is unique to that title. Of course, there could be other reasons but I would be interested to see sales data nationally for this issue. Maybe we are over Paris Hilton. Not a bad thing I’d suggest.

On Who itself, the redesign looks great.

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magazines

Industry in crisis

“They’re taking five billion dollars out of me and want to keep control,” Rupert Murdoch was saying into the phone, “in an industry in crisis! They can’t sell their company and still control it — that’s not how it works. I’m sorry!”

Time Magazine, June 28, 2007. Rupert Murdoch speaking about newspapers and his takeover offer for publisher Dow Jones & Co.

Further on in the same article:

When Murdoch talks about the future of newspapers, you get a sense of how contemporary he really is. Circulation and advertising revenues are ebbing away everywhere, he notes, proportional to broadband penetration. “You’ve really got to worry,” he says. “Tribune Co.’s revenues [in May] dropped 11% across broadcasting and newspapers. That’s huge. The Times dropped 8.5%. Half of men under 30 aren’t reading print newspapers, and there’s no sign that they come back as they age.”

How does he respond to this bleak picture? By musing about investing even more in newspapers. “What if, at the Journal, we spent $100 million a year hiring all the best business journalists in the world? Say 200 of them. And spent some money on establishing the brand but went global — a great, great newspaper with big, iconic names, outstanding writers, reporters, experts. And then you make it free, online only. No printing plants, no paper, no trucks. How long would it take for the advertising to come? It would be successful, it would work and you’d make … a little bit of money. Then again, the Journal and the Times make very little money now.”

Just as Rupert Murdoch ponders turning the newspaper model upside down, each newsagent ought to invest time in considering the appropriate model for their future. I talk here a bit about the newsagency of the future. I do this because as we can see with investments by our suppliers, that future, driven by change, is here now. Some newsagents are responding, many are not.

Rupert Mudoch tells us that the newspaper industry is in crisis. This is contrary to what newsagents hear at conferences from newspaper representatives. They are doing their job – keeping their distribution network together as long as possible. But no amount of spin can hide the crisis we face. Like any crisis, there are ways forward. This is what we have to concentrate on for ourselves.

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Media disruption
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