The Sydney Morning Herald yesterday reported on support among advertisers for the Fairfax plan to cut unprofitable circulation. I like the quote in the report from the CEO of UM, Mat Baxter:
For me the real issue here is the credibility of newspapers with advertisers, tricks like subsidising the cost of papers through ‘educational issues’ at schools or promotional issues at gyms and Starbucks scream of desperation.
Cutting free and subsidised deliveries helps retail newsagents reinforce the position in terms of newspapers. It helps distribution newsagents cut unprofitable deliveries. I’d note, however, that not all these subsdised deliveries are unprofitable for newsagents.
This is hopefully a positive step and one which I hope they actually action. For many years we have been telling Fairfax and News Ltd that giving away their papers only devalues them in the eyes of the consumer. The issue is that they have been doing it for so long that I am not sure whether the damage they have done to the value of their product can be repaired.
At this very moment our local IGA is giving away a SMH with every purchase over $5. They have told me that this will not effect my sales and it will increase circulation in the local area. During the same period returns of my SMH have gone up from averaging 10 a day to 100 a day!
At the same time I have people who actually buy the SMH from me telling me that it is not worth $1.50. Why do they think this way? Is it because of the heavy discounting Fairfax have been doing for years. I tell them that $1.50 is a bargain, I compare it to a cup of coffee for $3.50. Which is better value – a 10 minute sit down with a coffee or one hours reading of local and international news at your fingertips? I hope this is the start of Fairfax improving the value of their products. It is not too late if they get it right.
i am constantly suprised at how many women moan about the price of AWW? at $6.90 its still great value