News Limited, today announced a major restructure, compressing 19 operating divisions into 5 and cutting a yet to be announced number of jobs along the way. Cleverly, News CEO Kim Williams declared a commitment to print in today’s announcement, giving commentators the headline of the week: Fairfax abandons print for digital, News commits to print. Of course Fairfax has not abandoned print and News is as committed to digital as Fairfax.
While the spin was different ( considerably better), I expect time to reveal the moves by Fairfax and News to be quite similar. Market forces, consumer demand driven by disruption to habit brought on by new technology, will make it so. Print products will remain as long as they make money and serve the commercial needs of the shareholders.
Some in the newsagency channel have jumped on the Williams statement about print as good news for newspapers and newsagents. Kim Williams’ words need to be tempered with an assessment of the considerable investment by News in Apps for its mastheads and the relentless promotion of these. The company is investing considerably to migrate print customers to either move to digital or at the very least include digital in their means of access. Check out this quote from Kim Williams today:
Digital technology and the ever-increasing array of consumer devices and connectivity points represent an important core to the future of our company. To realise the huge opportunities presented we must ensure we have world-class resources supporting our editorial and sales teams.
It would be a mistake for newsagents to be complacent because of the News announcement today. I expect job losses to be right across the company, including some people newsagents work with today. Indeed, some of these positions have been made redundant already this year.
The plans to be announced by News on June 28 for the distribution model of newspapers will further inform newsagents and their plans.
Every newsagent in Australia needs to be working today on their business model where they rely far less on newspapers than they do today. It makes sense.
While they sell 11mil papers a year they will not close papers ,it is a bit of both please show some balance
Jim I’ve read the post again. I am satisfied with the balance.
I feel that the only reason they say they are committed to print is that at the moment there is not enough takeup of the digital option. I have even picked up on sales of The Australian since the paywall was introduced with several punters telling me ‘I used to read it online but now they want me to pay’.
Of course as soon as they reach the critical mass of online subscribers the print editions will go…
He also mentions print is not dead and has a strong future in which we, for one, have confidence as we build all our future consumer platforms – print, online, tablet, mobile, broadcast and social. More scraremongering from this blog. I think all that is promoted here is ipads digital technology and newsexpress nothing positive about newsagents all negative stuff
‘john’ lets check back in in a year and two years and see what has happened.
This blog does not scaremonger nor does it promote digital platforms and newsXpress as you say.
Take a look at what is happening with print around the world. I am not making this stuff up.
You are welcome to deny just as I am welcome to comment on what is happening.
It is a worry when you are wanting to sell your business. Supply contracts that are declining in value are not good purchases. We have to change too but how is the question?
I just watched Kim Williams on Sky, very smooth, polished and well presented (farther in law Gough would be proud).
He did say circulation and distrbution would have to change. He then specificaly mentioned “our Newagency friends” and was positive about us. He did leave me in no doubt though that change to is here for the distribution and probably our present comission system.
He was far more postive about print than Fairfax saying it will have a part to play for at least the next 10 years which he said was his business planning horizion. He did leave no doubt that print willl change to meet demand (up or DOWN). He said that paywalls are in the process introduction to their web sites / electronic media. After which it is then a matter of getting the content right so people will buy it in what ever format they the customer choose from print to any electronic form or an amalgam of 1 or more forms.
Anyway the Area Manager starts a Cooks tour of the Riverina tomorrow starting with me. May be an interesting day.
Carol,
Distribution contracts have had almost no value for about 2 years.
I suspect the announcement next week will result in a large number of territories being put on the market, and the only way to sell your territory is to almost give it away.
The term “inconvenient truth” comes to mind Mark.
I wouldn’t think you would be able to do anything but give away a territory now Dean as forced amalgamations are going to occur anyhow. My QNP rep told me a few weeks ago that the likely route was combining the 360+ Brisbane territories down to the 10 to 20 range meaning that many will either have their runs taken off of them, they will be forced to combine with neighbouring agencies to provide single delivery points for the bulk deliveries for their runs or they’ll be asked to take on more runs. It will be interesting to see if he’s right and this is how it falls.
I tend to look at this as being both exciting and somewhat frightening. We don’t know exactly how these changes will adversly affect a portion of our businesses but if we adapt and do it well we should be able to reap rewards beyond the loss of what was linked to being tied to the newspapers.
Kym Williams on tv now abc
Is it time to rebrand “newsagency” to something else? News will no longer be the core product. Maybe “papershop” is better? I.e things made from paper.
In my previous life before being a newsagent i very rarley ever went to a newsgancy to buy a paper . The only time i went into one would be to buy a mag or lotto . Not once did i think i was going to run down to the “lotto shop” it was still always the newsagency .To me Newsagency is just a name and it has nothing to do with selling news . When i think of newsagency i think of lotto . stationary ,mags , gifts , photcopy , ink ,service with a smile etc and if anything i would list newspapers as last , in fact i only ever purchased a newspaper from a servo from memory .
Shaun we, all of us, need to get our customers thinking of us for other reasons, bringing them in for more sustainable products and swerves over which we have more control or can add some genuine value to ourselves.
Shaun – you are such an honest guy, thats why I like your comments sometimes.
If anyone watch Stephen Conroy early this morning one should not need anymore convincing regarding Newsapapers. 5 years Max.
What does confuse me is some of the posts regarding Newspapers in different threads is that their seems to be an conundrum (Newsagencies are still selling and some growing sales in Newspapers but the charge is on to go digital by the Publishers)
Are the Publishers really saying that they are not making any money out of the Printed Newspapers once all the outgoings are accounted for? I need a laymans answer.
we sold our runs years ago and at present paper sales make up under 8% of our total sales and most of these are papers on there own. With only 12.5% profit they do not even cover roi but are there to keep us in touch with our past and for convenience, like servos as Shaun mentioned. We do not even take papers into account when we budget for the year that is how small a part of the business they have become.
To account for lack of add on sales we no longer work Sundays (double time wages) or early morning instead open at 7:30 just in time for the 9-5 workers and the savings in wages more then makes up for lost profits from these times.
Even if some agents are selling more papers year on year, the more advertisers who jump ship, the more the papers will struggle.
And Steven this week’s announcements will make some look elsewhere.
Shaun/ Mark
Lotto is now available on line and look like they are heading the same way. I assume they would not have to pay the agent’s commisions. I think not long before magazines are doing same.
Mark was right, we have to come up with something else to attract customers. Stop thinking of ourself as “newsagent”. Any one with “new ideas” please share
Tom
People are spending money on experiences, so we need to tap into this. We run an art sale this month with nothing over $10 a lot of art project sets and it went gang busters. People were buying projects for the whole family and used the weekend to do them. We are also an ABC centre and despite online we are selling more DVD as people want to escape the doom and gloom and don’t mind paying for it. Sell things that give people an experience and you will drive traffic.