The part of the Magazine Week conference which I attended on Friday in Sydney was terrific. While the panel session was interesting (more on that in a moment) it was the discussions before and after, the networking, which was more interesting and worthwhile.
My takeaways are:
- Magazine publishers are frustrated with some aspects of the distribution system.
- Some of the changes for the better we have seen this year are a response to the competitive pressure from IPS.
- Magazine publishers need help on how to engage directly with newsagents – they have questions which are not getting answered.
- There is real competition emerging in distribution ranks due to good changes by Network Services and the launch of IPS.
- Our biggest challenge is that we cannot contract to deliver consistency across the newsagency channel when it comes to magazines.
- Too much time is spent worrying about the future – will digital kill print etc – and not enough time is spent on discussing how to build better products today.
On this last, and important, point, magazine publishers need to focus in delivering valuable, engaging and enjoyable content in print. Discounting is a mugs game. Giving away your print content for free is a mugs game. If you want to be online too, deliver access to different content than the print offer.
The panel discussion itself was good albeit way too short to fully explore the issues of the future of the retail channel. I’d like to see a longer conversation between publishers, distributors and newsagents. At least half a day. We need time to properly and fully debate issues for it is only robust debate in a relatively open forum which will let us get to the bottom or core issues such as over simply, under supply, inflexibility and arcane business practices.
What was disappointing about the panel discussion was some of the interaction with Craig Davison the Executive General Manager of Gordon and Gotch. He said he didn’t like being bullied (and in doing so inferred he was being bullied), that they only make money from sales, that they do not over supply, said that the quality of sales data from newsagents was poor and said he was happy to have a discussion about their model offline.
I’d like to respond on each of these:
- Bullying. Maybe I misunderstood the point he was making but I felt that Craig was having a crack at some things I say here about Gotch. Fair enough. I have been critical. Hardly bullying though. What I report is behaviour. It they are not prepared to cop criticism for unfair and unjustified poor behaviour toward newsagents then they should quit the business.
- Only make money from sales. I’d like evidence to support this claim. Publishers tell me a different story, that there are fees regardless of sales. Without evidence I would not believe such a claim.
- Oversupply. Inside Gordon and Gotch they have proof of gross and consistent oversupply. Their own data shows this. I have seen it for myself. Each time they have been challenged, they through up what I’d call a smokescreen response and never actually justify why they continue to supply to a sell through of, say, 20%. Gordon and Gotch does knowing oversupply.
- Sales data quality. Complaining about newsagent sales data quality is often trotted out by magazine distributors. It is not as bad as they make out, not at all. The worst case scenario is that they can use their own sale or return data for supply. Even based on that they oversupply. They can’t have it all their own way on the data argument.
- Offline discussion. I have encountered this myself. A nice visit and discussion. Plenty of spin on numbers. Lots of talk about accountants. Designed, I think, to make you feel inferior and that they are the gods. The facts are that newsagents are oversupplied on many titles and that this behaviour is what causes newsagents to strike out against, unreasonably, other titles. There should be no offline discussion. This needs to be fixed publicly between newsagents, publishers and distributors.
There was a brief discussion about an idea I pitched here some years ago about a magazine czar. While I accept that this is impractical, the overarching idea is something we need to explore.
As I have been writing this post I have been thinking about the issues around magazine distribution and what we should do next. I’d like to modify the idea of a workshop mentioned above and make it a newsagent and publisher only workshop. We should discuss the issues and reach common ground. We are the core parties after all. Once we agree the distributors can be brought in to facilitate what has been agreed.
As 2011 comes to an end I think we are in better shape on magazine distribution than when we started. Network Services has improved considerably. IPS has arrived and upset the apple cart. These are good moves.
typical of gordon and gotch , they do no wrong , they only make money from sales they do not over supply and our data is no good to them . hmmmm i personally have no idea at what stage they make there money so no use me commenting on that one but as far as over supply goes ,wht are you doing on wednesday morning Mr Davison would you like to go through some mags with me ? Better still what are you doing on the 20th you can help me work out how to pay you .
Thanks for the feedback.
Looking forward to seeing some more positive, engaging and transparency changes for 2012, looking forward to reading other posts to see if what one thinks.
Craig Davison doesn’t like being bullied???? Bit of the pot calling the kettle black isn’t it? Hasn’t his company been bullying newsagents for years?
So glad you were at the conference Mark & able to let us know what is going on.
I suspect he’d be more than a bit worried about his job. G&G was pretty well the only non performing section of the PMP group last financial year. Funny that their own annual report noted that they had secured distribution for more overseas titles (so expect to see more of those coming through). If, as Mark has stated, and has been confirmed by the odd publisher here, that they receive some income from just desitributing non selling product then theres no way they could financially survive pushing less product based on their current financial performance.
Mr Davison also could never admit to oversupply as it could possibly open G&G up to claims for financial damages (lost interest/earnings due to oversupplied products ).
I love your suggestion Mark about the newsagents and publishers getting together and then bringing in the distributors after we’ve set the new stage. Could be a great aiming point for 2012.
I’d also invite Mr Davison to come and see what level of oversupply I have to deal with sometimes. Would love to see how he justifies my Inside MMA allocation that arrived this morning.
While you’re at it, how about asking publishers why they’re still pushing Internet sales at the expense of newsagents?
Thumbing through Take 5 this morning, I came across a full-page statement from Magazine Publishers of Australia, with the title,
‘Will the Internet kill magazine? Did instant coffee kill coffee?’
It goes on to say that surfing the ‘net isn’t the same experience as reading a mag. True. However, it doesn’t say that the Internet isn’t a good way to buy them.. any more than it says that a newsagency is a good place to find them.
Very vague in that respect, however what I gleaned was that MPA isn’t concerned about ‘The Channel’ at all – just the experience of having a mag in one’s hot little hand.
Clarifed things no end for me.
IMHO, it could have done (a hell of a lot) better.
Hmmmm. Think I could dig up a quote from Gordon & Gotch when we looked at changing distributors.
They definitely were charging us a per issue distribution fee. Around 40c per magazine if I recall. And don’t forget your various levies and “fuel surcharges” that are added to the bill. Of course there is the extra cost of a return that is around 20c per copy as well. So once you add everything up, we don’t see much change from around 80c per copy distributed.
I wouldn’t accuse Gotch of lying in front of a room full of publishers.
I am sure it was just a “misunderstanding”………
Carrob perhaps that explains all.
They get to bites at the cherry. Charge for delivering and oversupply and then a charge for getting back because of the oversupply. If I was the distributor I would also oversupply and think of all that lovely cashflow from the newsagents as well. All makes sense now.
I sold a copy of Truckin Life today and due to the new margins made $6.79 on it! Now thats what I call encouraging me to look after a title