I was in Sydney today and picked up a copy of the Daily Telegraph at the airport. There, on the masthead, it crows that it is still only $1.00. That is nothing to crow about News Limited. While your ad rates, the source of most of your revenue from newspapers, have risen over the years, you have forced newsagents close to being the working poor.
In the eleven or twelve years (please let me know if I am wrong) that you have held your price at $1.00 rent for newsagents in shopping centres has gone up at least 70%, labour costs have gone up at least 70% and business expenses have gone up at least 100%.
Over the last twelve years publishers have pushed newspapers into more outlets, diminishing the return from the newsagency newspaper real-estate even more.
I would love to see a public debate between newsagents and News Limited on their cover price strategy.
Mark, you are not wrong. The Tele went from 80c to 88c with the introduction of GST in July 2000. It then reached the grand sum of $1 shortly after.
NEWS LTD ALSO LIKE TO PAY UNCOMPETITIVE WAGES.
Newspapers are the lowest priority in our store, especially at sub agent rates, and will soon be given a location in the store to reflect their lack of value to us. Bottom shelf, back wall (still near the counter though) here they come. Our space, time and effort can be far better utilised in highly profitable ares of the business.
Brendan seems to have the answer. That way you still have them for those people who come looking but for those extra sales better to have something else for them to buy
To keep it at a $1, they have clearly needed to reduce the content and size of the paper over time, hence the value to the customer. Some days it is so small, customers put it down again on the basis that it isnt even worth the $1. Seems to be a “death spiral” pricing strategy to me.
In the early 1970’s the Evening Sun (Fairfax) newspaper in NSW raised it’s price from 10c to 12c The Daily Mirror (Murdoch) kept its price for 3 years. The Sun called in a small number of newsagents (including myself) to announce that they were reducing their cover price back to 10c . Newsagents complaine that they were losing the commission structure from 25% of 12c to 25% of 10% They totally missed the point that the “break even” point for newspapers to maintain afternoon editions was in effect reached. A few years later the Sun went down forever, the Mirror amalgamated with the morning Telegraph extended some editions and not others however eventually closed its afternoon papers.
I guess the message here is they don’t do this (keep cover prices low) to punish newsagents. They do it to keep their newspapers competitive and profitable, if you thisnk their is a conspiracy here you are being mislead and should really be concerned for it is not you that they are punishing, it is a survival that they are seeking. You can help them win or help them lose, it’s upo to you, however it’s the same as the 70’s it they lose because you want more then you lose for there is no more. Punish them and you will punish yourself, however I accept that you can support the product and still it may fail. If that happens at least you will know that you didn’t contribute to your own demise.
I would love to see a public debate between newsagents and News Limited on their cover price strategy. This will be important as publishers look at the economics of cutting the cover price.
I read this blog mostly to read Graeme Day’s views, which to me reflect a very good perspective on things. Again I think his view is informed and balanced without bias…thank you and keep up the work despite the heavy weather directed at you at times.
PS I do not know Graeme, but appreciate his comments.
Mark,
With respect public debate is what you have been presenting here for yonks to no avail. Nothing will replace fair minded commonsense. Gillard and Rudd both tried public consensus with the Top 100 think tank-didn’t work. People who assume responsibility should be as they assume-responsible and show leadership.
Steve,
Thanks for the support and words of well meaning, sometimes I feel it is just a bun fight to get people to see another point of view and to be a bit more ojective. It is after all about making it a better industry and that means it is not all about ME! ME! ME!
Graeme there are many results achieved by this place shining a light on issues.
Newsagents are worse off today than ten years ago. You say work with the suppliers on a mutual goal. The problem with that is that the goal of publishers and newsagents is not mutual and never can be.
The associations and worked with publishers and distributors for decades without result.
As a new entrant into the industry, I find $1.00 is very “handy” for the customers. It is easy to have a $1 coin ready to pick up a newspaper then a $1.50. Also, comparing Tele to SMH, you will notice the market for the two are totally different. Yes, the money into the newsagent’s pocket is lesser for the Tele than for SMH. However, depending on your demographic, you may sell more Tele hence more money at the end of the day. As for my newsagency, we certainly sell more of the Tele then SMH because our customers want Tele with the price as one of the main factors.
Does one think that equally devaluing of newsagents (ones that deliver, anyway) to offer these ridiculously unviable subscription deals? The cost of which exceeds quite significantly, the price customers pay? Like the $2.50 weekend deal offered by QNP, or the $5 six-day deal by GCP.