Why newsagents deserve Conroy largesse
Communications Minister Stephen Conroy said the federal government decided to give the free to air TV networks a $250 million discount on licence fees because they are in terminal decline. While the networks deny this (see The Australian report on this today), it’s what the government believes.
The challenges for newsagents are as great:
- In 1999 the federal government facilitated the removal of the newsagent monopoly over the home delivery of newspapers.
- During the 2000s some publishers and magazine distributors actively cultivated direct relationships with petrol, convenience and supermarket retail channels.
- In 2009, new newspaper contracts further reduced the commercial security around distribution newsagencies.
- Newsagents rely on printed products, newspapers and magazines, for more than half of all foot traffic. This is stagnant and, in some niches, in steep decline thanks to new technology like e-readers and smart phones.
- Devices like the iPad and, more importantly, what will follow, will seriously challenge the newsagency channel.
- Environmental concerns are changing practices in newsagencies.
- Newsagent suppliers have set a new benchmark on minimum standards. To meet these standards, newsagents are having to increase their investment in business infrastructure.
- To compete, newsagents are having to enter into new business areas.
Newsagencies are fundamentally changing and while this is good, it has a significant short to medium term cost. The same as Conroy sees for the TV network.
Newsagents have a strong case when considering the Conroy benchmark for financial support. Further, pharmacies in the 1990s set a precedent, receiving federal government compensation for channel consolidation.
A government concerned about small business would know this and would be on the front foot to offer support. Instead, they focus on the big end of town.