I response to the article in mUmBRELLA last week reporting comments about newsagents by two publishers, I offered to write in support of newsagents and with a suggestion on how to grow magazine sales and support small business newsagents.
mUmBRELLA published my contribution yesterday. In this article I call on magazine publishers to supply newsagents and not supermarkets, thereby refreshing us as magazine specialists, giving us commercial reason to re-engage with the channel and allowing us reason to support the category as professionals and not as competitors to better funded and better supported but less engaged competitors.
I am serious in this suggestion as I am confident that if magazine publishers were to supply newsagents and not supply supermarkets, newsagents would partner with them to arrest the sales decline.
Newsagent responds to magazine publisher complaints and advice
It is frustrating reading that magazine publishers bagged newsagents at an industry forum without newsagents having a reasonable right of reply. But maybe that is how publishers like it, maybe they don’t want to mix with newsagents. We do, after all, only sell 50% of magazines sold in Australia.
Nicole Sheffield, the CEO of NewsLifeMedia says we need to exert more control on the titles we receive. Ash Hunter, CEO of Hunterfive Group, says newsagents entering the channel are of a poor standard.
While these opinions could be factors in challenges for magazines, they are only opinions. Sheffield, Hunter and other publishers ought to look at the facts. They took what was a specialist channel and took from it around 50% of magazine revenue and gifted it to supermarkets and convenience stores.
This new competitive landscape facilitated by the publishers left newsagents with less profitable titles. Newsagents and now, finally, responding by reducing retail space and labour they invest in the magazine channel. This is causing newsagents to not display all the magazine inventory sent as they no longer have the space for it.
Indeed, there is a fundamental disconnect between the retail space available in newsagencies and the inventory sent. Talk to Gotch and Network and they will agree – they do not know the retail space allocated to magazines and that they do not know is not a factor in what they send. Nuts!
If Australia wants a profitable magazine publishing channel it needs a profitable route to market. Newsagents are the best opportunity. Plenty of them want to be the magazine specialist, a destination for the magazine shopper. But the numbers do not work. The numbers could work if publishers ignored supermarkets and helped direct more magazine traffic to newsagencies.
My proposal is simple – make newsagents the magazine specialists by only supplying them.
This single move, of choosing to place titles exclusively in the newsagency channel, would encourage newsagent support. I am not talking here about one or two titles. No, I am talking about hundreds of titles, popular titles, titles in the top 200 even. Place these exclusively in the newsagency channel and you change the game, you get the attention of newsagents, you push back against the supermarkets and you respect your product.
While I am confident that a bold move such as I outline here would benefit publishers and newsagents it would need careful negotiating, involving many titles and requiring thoughtful newsagent engagement. And, yes, there would need to be a discussion on margin. Rent and labour in retail are considerable expenses and titles not paying their way serve no purpose in any retail business. However, margin can be considered in various forms. For example, there could be a base stocking fee or some other levy to support the category.
If sought after product is only available in one channel then the two main parties to such a relationship, the publisher and newsagents, ought to benefit. We would have a shared commercial objective, far more so than exists today.
My call to Sheffield, Hunter and other magazine publishers with opinions about magazines in newsagencies is simple – engage with us, invite us to your conferences, work with us on a =n alternative model as the current model is not working for anyone. Oh, and don’t engage with the newsagent associations as they are out of touch on this and most other issues as history has shown.
Footnote: I’d love Nicole Sheffield to explain the News Corp. position on pricing Inside Out $2.00 a copy less in Coles than in newsagencies.