The Sunday Telegraph recently lifted its cover price to $2, but Miller told Mediaweek that there are no plans to lift the Daily Telegraph above $1. “We do look at it, but we think about the impact on the audience. With interest rate rises, fuel increases and the cost of other utilities, we wouldn’t want to put that to the reader at the moment. $1 seems to make sense.”
Michael Miller is Managing Director of Nationwide News, the NSW arm of News Limited. He was speaking with James Manning for a feature in Mediaweek last week- page 6.
I would like Michael Miller to plot for newsagents classified and display advertising prices for the entire period that the Daily Telegraph has been priced at $1. This information would be useful for two key reasons:
- It would enable newsagents to see whether News Limited has protected itself with revenue rises while blocking access to revenue rises for newsagents. I suspect that it has.
- It would test Millar’s argument that a cover price rise would not be fair on punters. Punters eventually pay for increased advertising costs. Advertisers pass these on. We could similarly plot the price of everyday items advertised in the pages of the Daily telegraph for the period over which the cover price has been $1.
The publisher argument will be that newsagents can rely on newspaper traffic to drive sales in other parts of the business.
The most recent newsagent shopping basket data indicates that newspapers continue to be sold alone in newsagencies around 70% of the time. That is, 70% of the time people purchase a newspaper in a newsagency, they purchase nothing else. This is facilitated by newspaper publisher mandated displays which stop other products being easily promoted to the newspaper customer.
Further, in the time that the Daily Telegraph has been $1, News has overseen the placement of the product into more retail and other outlets, reducing traffic to newsagents for the title.
I have even heard some publishers say that newspapers help newsagents get higher margin sales.
Newsagencies typically do not sell high margin products except for greeting cards. Lottery products have a margin of around 7%, transport tickets 2%, magazines 25%, confectionery 20%-30%. No, the margin story in a newsagency is not what some suppliers and landlords think.
Over the last eleven years, rent for most newsagents has increased by at least 71%. This assumes the usual annual 5% increase. I know of some newsagents who have had to deal with rent increases of more than 100% over the last eleven years.
Over the last eleven years, labour costs for newsagents have increased around 60%, significantly more for penalty rate situations.
So, newsagent costs have increased, newspaper publishers have extended competition yet newsagent compensation has not changed.
Michael Miller says he would not want to put a cover price rise to readers on the back of higher fuel prices and the cost of other utilities yet he is happy to leave newsagents to deal with these and other higher prices without any mechanism for covering these higher operating costs. Newsagencies are family businesses. These families are financially stretched due to the lack of access to mechanisms with which to commercially respond to higher operating costs.
I’d like to see a debate between newsagents and newspaper publishers on cover price and newsagent compensation. Maybe such a debate would better educate both sides. Hopefully, it would lead to a more equitable situation for newsagents. We need it since newspapers have lost the gloss of ten or fifteen years ago. No longer can publishers argue that they generate valuable traffic.
We are promoting House & Garden and Good Food both on an impulse purchase display facing customers as they approach our sales counter. Space is tight and this was the best location available for the display. We will probably flip the titles at the weekend so that Good Food is in the better top position. While we have stock of the titles in their usual location, this co-location tactic is all about incremental business. Sometimes you just need to show customers what to buy.
