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

Month: February 2009

Well done newsagents and suppliers!

It is terrific to see the level of support by newsagents and suppliers for Victorian bushfire relief appeals.  I know from conversations yesterday that this is of comfort to people on the front line – those personally affected and those supporting them.

From spare change collected at our counters to support for magazines raising funds from sales (New Idea, Woman’s Day, Take 5, That’s Life, OK! and Who) to collecting product for donation to practical help.  Those newsagents and newsagent suppliers who have supported fundraising and other efforts ought to be proud not only of their efforts but also of demonstrating how the newsagency channel sevres the heart of our nation.

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Social responsibility

What newspapers will not report about their handling of small business newsagents

This is a story you will not read in your newspaper.  It is about how some newpspaper publishers treat small family businesses.

Years ago, when a publisher ran a home delivery deal, they would pay newsagents what the margin would if the paper was sold at full price. As I wrote here last year, I know of newsagents getting less than half to deliver to customers who have accepted deep discount deals. To go from a slightly profitable customer relationship to one which is loss making because a supplier decides to discount is another reason more newsagents are walking away from home delivery.

So, what is the answer?

I’d like to think that if I were a newspaper publisher I would be investing in a key asset such as the newsagency channel rather than starving it.
Publishers can stop newsagents handing back runs by:

  • Providing fair rewards for what publishers say is the best newspaper delivery system in the world.
  • Provide newsagents with mechanisms which respect them as business people and not as process workers.
  • Taking total responsibility for subscription deals rather than forcing newsagents to share the cost.
  • Giving the service more visibility – help newsagents be proud of what the de for the publishers and newspaper subscribers.

Newspaper home delivery is unlikely to grow. That does not mean that those providing the service ought to be treated with the contempt I see in some states today.

When I left the Board at the end of 2004, the ANF had the data necessary to guide newsagents to make real progress on representation around the delivery fee matter.  It is clear that this opportunity was squandered.  While there has been some noise over the last week, for many it is too late.

My proposal in 2004 was that newsagents call for a Productivity Commission review of the home delivery model, as review of the 1999 deregulation if you like.  Such a post deregulation review is not unusual and would be good government in action.  Unfortunately, I was unable to muster support from newsagent repreentatives to push for such an inquiry.

The situation today is serious.  The publishers know it.  Some are responding by investing in infrastructure to take over delivery.  This is not the answer as each territory handed back is another (often meagre) income taken from a family.

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newspaper home delivery

Promoting Men’s and Women’s Health

fhn_healthmag.JPGWhile the two displays don’t look ideal next to each other, we are trying, for the fist time, Men’s Health and Women’s Health on the counter next to our main lottery counter in addition to their usual placement. We are still trying to figure what titles work well with customers in line to purchase lottery tickets. It is easier at our traditional newsagency counter – what we place there is working well. We are committed to finding the right titles to engage lottery only customers- hopefully these health titles work.

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magazines

Thirteen years a newsagent

I bought my first newsagency thirteen years ago this week. That was the business now known as newsXpress Forest Hill. The previous two owners of the business had gone broke. We bought it after the landlord locked the last owner out. The business was being run by suppliers just to keep newspapers and magazines supplied.

A lot has changed over the thirteen years – in our newsagency and across the channel.

One frustration was being forced to move three times. The biggest frustration, however, was getting flooded out last year when builders did not protect out shop when they opened the roof of the centre for major construction going on next to and above us. Twice we were flooded and here we are a year on and yet to be paid for the thousands of dollars in stock.

Every newsagent has stories of challenge. We must like these challenges because we stick at it. Indeed, we come back for more. I bought another newsagency a year ago and I have a half share in another which opened a year and a half ago.

I am reflecting about the thirteen years today because I am in a reflective mood. Retail is tough, nowhere more so than in newsagencies. Our fixed margin on around 65% of what we sell is a challenge. The lack of fair movement in price of newspapers is another challenge as is the interest in some suppliers to pursue other retail channels. I could go on…

Owning a newsagency right now, however, is the biggest challenge ever. Our world is changing thanks to disruption brought on by technology, greater competition and economic circumstances. These factors converge to create what to some looks scary and to others looks like the best opportunities in a long time.

The intersection of disruption, competition and economic circumstances is an opportunity for us to reinvent. Not nationally, not statewide, but individually. Some newsagents are doing this today, playing with new product categories, offering fresh services. Some are not calling themselves newsagents anymore.

Today’s world is less regulated and presents more opportunities than the world of 1996. The challenge is to summon the energy and locate the capital necessary to make the most of the challenge. This is where opportunistic suppliers and landlords could work with us. They need us as much as we need them.

Today, I and the teams running my newsagencies are playing at the edges of the model.  As the year unfolds we hope to play with fundamental changes closer to the core.  We are buckling in and pursuing change.

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Newsagency opportunities

A tale of two magazines and impulse buying

counter_mags.JPGWe had Good Food at our premium counter position for a week and sold six copies. We has The Monthly with Kevin Rudd on the cover displayed with our newspapers for the same period and sold twelve copies. While it is unfair to compare the two titles, the success of a titles in an impulse situation – high traffic and away from its traditional home – is a test of the title itself. I don’t think The Monthly sold just because of the cover, there has to be perceived value on the masthead itself. On Good Food, I think consumers don’t know where to place the title – certainly not until they engage with it. There are several excellent lower-priced ‘suburban’ food magazines and a couple of respected top end local food titles. Good Food, in the middle, seems, on our sales, lost.

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magazines

Oh to be a magazine publisher in Canada

The new Canada Periodical Fund (CPF), announced today by Heritage Minister James Moore, will maintain the exisiting funding level of $75.5 million for Canadian magazines and community newspapers, according to a release from the Department of Canadian Heritage.

Read the full story here at Masthead Online.  The Canadian Magazine Fund is administered by the Canadian Government to support Canadian magazines and Canadian content.  It sounds like an excellent program.  Certainly, its support for Canadian stories is important – hence that fund oversight falls under the Canadian Heritage.

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magazines

Being a newsagent in Whittlesea

whittlesea-002.jpgThis is Neil and Robyn Ritchie from newsXpress Whittlesea.  They have had an extraordinary ten days in their newsagency.   Like other newsagents who face tough relentless circumstances, they get through each day.  Click here to read more about their week and some of the challenges they have faced as a result of the bushfires.

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Newsagency challenges

Bushfire benefit lottery draw

tatts_bushfire.jpgThe initiative from Tattersalls to donate their proceeds from this Saturday’s Tattslotto draw to the Alfred Hospital Burns Unit in support of the Bushfire Appeal is excellent and deserves kudos. I especially like that they have been transparent in their press announcement about what they expect to make – $3.5 million.

That said, I know some who will have an issue with promoting gambling as a way of raising funds for bushfire relief. I’d be interested to know what others think – especially as a retailer. Do we go hard and encourage gambling? I ask this because the fundraising aspect will attract new customers.  I am genuinely interest in what others think about this.

Concerns aside, we are actively promoting the Saturday draw in-store and have created a series of syndicates to help. Indeed, we are promoting everything connected with fundraising for the fires – Who, New Idea, Woman’s Day – as well as continued promotion of collecting loose change for the Red Cross.

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Ethics

New Kindle stores a library of books

The latest version of the Amazon Kindle reader, announced a few days ago, has capacity for 1,500 books – a home library full.  People are buying the Kindle – more than 300,000 sold in the US last year – for more than reading books.  The Kindle provides access to newspaper subscriptions, magazines and more than 1,200 blogs.  This new version also has an “experimental” read-to-me fundtion.  The Kindle s currently not available for use in Australia.

The Kindle, and other devices like it, eliminates the traditional supply chain.  The distance between author is shorter and this is what makes the costs of the books less.  Take Breaking Dawn, book 4 in the Twilight series -hardcover is US$15.63 and the Kindle edition is US$11.68.

These devices will ultimately arrive here in mass numbers and those of us retailing print product – books, magazines and newspapers – need to have a plan.

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Book retailing

Promoting Weight Watchers magazine

fhn_weightweatchers.JPGWe are promoting Weight Watchers magazine to customers leaving our two main magazine aisles.  This puts it in front of around 55% of men and women who shop with us.  We are using a ‘found’ space – a space we have created from nothing by moving some fixtures around and turning what was dead or near-dead space into something useful.  To create a story we are supporting the now-monthly Weight Watchers magazine with a range of other product connected with the weight loss theme.

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magazines

Transparency over Bushfire Appeal fundraising

fhn_fire_money.JPGThe photo shows one of the posters we have on display at Forest Hill showing the deposit slip for the first deposit of loose change collected from our customers.  We are doing this in each of our stores – placing a copy of the deposit slip on display so our customers know the money has gone direct to the Red Cross Appeal account.  We are not filtering this money through our account and therefore not making any claim on tax deductibility – nor should we.

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Social responsibility

Promoting Madison at the counter

fhn_madison_mar09.JPGOur team has placed Madison at the counter this week. The free Oraton luxury notebook and pencil gift with the magazine qualifies it for this premium counter space. The total package looks sensational – I hope not too good to be true for impulse purchase. Certainly, the only way to display this special issue of Madison is with the notebook opened out, as we have at the counter.

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magazines

How sub agents are treated

Newsagency B is a sub agent of newsagency A because the previous owner of newsagency B sold the distribution business to newsagency A before selling the retail business a year or so later. Today, a couple of years on, the relationship between the two businesses is seriously challenged. Newsagency A supplies newspapers to newsagency B and engages in some odd behavior. For example, when they close at lunchtime on a Saturday, they will not release all remaining newspapers to newsagency B Newsagency B consistently sells out and newsagency A has returns which could have been sold.

With more newsagents selling their runs and therefore more ‘sub agents’ being created, newspaper publishers will watch this behavior and, I hope, act in the interests of consumers and their product. An old school lording over his territory as may have happened thirty years ago is not good business for anyone other than this newsagent’s bitterness.

If it looks to a customer like a newsagent it is a newsagent in my view.  Some old-school newsagents will claim that a retail outlet which does not have a direct newspaper accou t is a sub agent.  Some will think they can treat the ‘sub agent’ as a second class citizen.  Shame on them.

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Newspapers

Magazine 2.0: Anthill

anthill.jpgAs the cover proclaims, much of the latest issue of Australian Anthill magazine has been written by readers. User generated content is pretty innovative in magazine circles. If you are a follower of the Anthill website you will understand that this is a logical next step for the innovative independent publisher.

Update (19/2): No sooner had I posted this and the news hit that Anthill was to move from monthly to quarterly.

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magazines

Update on Bill Express court case

Hank Spier, legal counsel for the NANA initiated Class Action on Bill Express, has provided the following update on the action brought against the company by the ACCC.

There is a scheduling meeting in the Federal Court in Melbourne on 12 March. That will set the date for the trial.

Mobius and Bank of New York Trust have undertaken not to pursue any payments from newsagents until the Court action is over.

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Bill Express

Newspaper sales leaking from newsagents to supermarkets

It is interesting to see how newspapers reported the latest circulation figures.  Check out: The Australian, the Sydney Morning Herald and The Age.

The audit figures published on Friday only tell part of the changing newspaper circulation story.  Based on newsagent sales benchmark data I have, newsagents lost retail sales of newspapers at more than double the reported audit numbers, three times in some cases.

We are experiencing considerable sales leakage to other retail channels such as supermarkets and petrol and convenience. This is the only explanation I can see for our channel experiencing a sales decline which is greater than the audit numbers reported by the newspaper publishers.

Why newspaper publishers would want to push this further by opening new retail outlets is beyond me if we are the retail channel they prefer as they say.

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Newsagency challenges

Generosity everywhere

fhn_appeal.JPGnewsXpress started promoting support for the Red Cross bushfire relief appeal last Monday.  In addition to promoting direct donations, we have been collecting change from customers.  Many customers donate more.  The support is overwhelming, people cheerfully giving without being asked.  We are banking this money direct into the Red Cross account and will display the receipts for our customers as we go.

If we see ourselves newsagencies community focused then supporting the bushfire appeal is important, not something to think too long about.  VANA took days to engage and provide advice to its members of their fundraising plans.

The collection containers are chained to the counter because of stories of some being taken.

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Social responsibility

The old Christmas magazines

fhn_christmasmusic.JPGI had a customer ask on the weekend why some of our overseas magazines are current issues and others are old.  He was pointing to Classic FM and BBC Music Magazine.  Both feature Christmas music and both came in this month.  While I had an answer, he has a point.  If we are magazine specialists then we should have current issues.  Out of date stock – two months out of date – makes our businesses look out of date.

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magazine distribution

US magazine distribution fight goes to court

fhn_mags1.JPGFolio reports that a fight in the US about magazine distribution has gone to court.  Interlink is claiming that some publishers, including some major names, conspired to try and force it to sell its business to a rival publisher.  This issue flared up when Interlink announced it would apply a distribution surcharge of seven cents a copy to distribute magazines.  The National Ledger has another perspective on this fight.

I am mildly interested in this case because it is about the cost of access to a magazine distribution network.  Magazine publishers in Australia have access to our newsagent network (if we can reasonable call it a network) for no cost imposed by us.  Magazines distributors have inserted themselves between our retail outlets and magazine publishers.  Thye are the gatekeepers to this asset we have, more than 4,000 retail outlets perfectly located.  Indeed, they charge the publishers and they charge us.

While magazine distributors provide logistic and some other services, it is our shelf space and our placement of magazines in categories so consumers find them by interest that is a real yet undervalued benefit.

There is an opportunity for newsagents to explore alternative models based around a more direct newsagent / publisher relationship.

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magazine distribution

Who supports Victorian bushfire appeal

fhn_who_fire.JPGWe are promoting the special Victorian bushfire tribute issue of Who with our newspapers this weekend. The 10 cents being donated from every copy is a practical support to the relief effort. we have the magazine in three high traffid places in our newsagencies to ensure that we achieve a sell out.

On the 10 cents per copy donation, I think it is important for businesses supporting the bushfire appeal to be specific in the money which will be donated from purchasing. Saying you will donate profits for a day is less specific.  Who can say how much an action raises.  I think customers want to know.

Virgin Blue has handled raising money for the Red Cross bushfire appeal well.  They are collecting donations on each flight.  On the five Virgin Blue I made between Tuesday and yesterday I heard them announce how much was raised and that the airline would match that dollar for dollar.  This level of transparency is excellent.  One flight raised $670, meaning the appeal receives $1,340.

Fundraising aside, this week’s edition of Who is excellent.   It provides a perspective which compliments the coverage provided by newspapers all through the week.

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magazines

Making love and money together

fhn_tatts_synd.JPGIn addition to a range of gifts and cards for Valentine’s Day, we are also promoting the $14 million Tattslotto superdraw for tonight.  Our team at newsXpress Forest Hill has developed a range of syndicates and printed posters for these in pink.

While this may not be quite the corporate approach Tattersalls may prefer, it is the approach which has worked well for us and has helped us develop excellent syndicate sales over the years.  It is our way of separating our Tattersalls outlet from others nearby.  Such personalisation is what retail is all about.

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Lotteries

The state of the newsagency channel

I’ve been fortunate to meet face to face with plenty of newsagents in Melbourne, Sydney, Brisbane, Canberra, Adelaide and Perth this week at the newsagent management workshops I have been running. Some common issues are on the minds of newsagents.  Curiously, not one question or comment about associations or unity – this issue is off the radar.  Here are some of the topics people did discuss:

Optimism. Plenty of newsagents are optimistic about the future and reflecting this in their investment in their businesses in shop fits and funding new product categories.  These opticistic newsagents come from businesses of all sizes and situations.

Change. Newsagents are talking about change more so than ever before.  Some are driving change in their businesses others are trying to work ot what change will occur.  My view is that we need to control change and that we do this in our space allocation, our attitude and our engagement with our teams.

Magazines. Oversupply, long shelf life and poor business practices make magazines frustrating for newsagents. Unless magazine distributors make progress on these issues, more newsagents will reduce space and even close accounts.

Newspapers. Newsagents say that with publishers wanting to get into more and more non-newsagent outlets they are less likely to see newspapers as a core product in their newsagencies.

Service. Customer service is the most popular point of difference being pursued by newsagents.  For some it is lip-service while for others it completely defines their business and every decision they make.

There were plenty more areas covered. In all, the week has been an excellent rolling conversation for which I am grateful to the newsagents who gave of their time to participate.

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Newsagency challenges
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