Australian Newsagency Blog

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Is News Corp. pushing newspaper customers to digital with a 31.6% cover price increase?

Mark Fletcher
November 8th, 2019 · 7 Comments

The cover price of The Observer in Gladstone increases 60 cents, 31.6%, November 18, to $2.50. News Corp. announced this to newsagents on October 30.

This is an extraordinary move by  a company that for decades resisted calls from newsagents for price increases, a key mechanism through which newsagents could make more money from their product.

Now, with newspaper print sales in terminal decline and newsagent revenue increase disconnected from the cover price, the company announces this extraordinary price increase.

Maybe they are testing a higher price rise and customer reaction in this small market prior to roll-0ut elsewhere.

Maybe they are testing to see if it helps with migration to digital, which has to be a goal for any newspaper publisher these days and is certainly a goal for News if you look at their marketing focus on pitching digital.

Newsagent commission under the new price will be a paltry 17.2%, loess than a living wage from the sale of papers.

The letter from News Corp. to newsagents demonstrates, in my view, a detachment by the company from newsagents. There is no explanation, no nuance. It’s not a letter written to a partner.

News Corp. is not treating newsagents in a socially responsible way. A company that claims to be for everyday Australians in their pages are not for newsagents, who are everyday Australians, mum and dad small business owners.

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Category: Newsagency challenges · Newspaper distribution · newspaper home delivery · Newspapers · Social responsibility

7 responses so far ↓

  • 1 JD // Nov 8, 2019 at 11:13 AM

    It’s either a test case or they are trying to drop readership to give them an excuse to either close the title or switch to a weekly. The area is overserviced by newspapers, two Mon to Sat papers from small cities less than two hours apart. The two titles are mostly duplicates of each other, with a smattering of local news.

    Truth is the previous price rises have basically left newspapers being bought by the faithful or due to routines. So I guess the new price might be just to milk what they can before the title is eventually closed.

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  • 2 Russell McDonnell // Nov 8, 2019 at 11:39 AM

    They are also wiping out a generation that live for the paper and are having financial difficulties.

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  • 3 Graeme Day // Nov 8, 2019 at 1:41 PM

    I have talked at length with both News Corp and Nine and the general consensus is that on line hasn’t yet made it and print media is losing money by advertisers going Google etc hence the Court case by Rupert and the action from ACCC. The onlt revenue increase can be by cover price and as long as it remains profitable in a circulation numbers of sutainabilty (in profit) the C.P. will remain static.
    The fact that it is (C.P.) rising is an economical fact.
    Naturally if this was happenning to your company you would do the same plus keep doing this until the enevitable break even point becomes un sustainable and the you shut down the press.
    let’s hope there is such a point of consolidation soon for no one even the publishers want the product of print to cease.

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  • 4 Graeme Day // Nov 8, 2019 at 2:04 PM

    also under the “new” agreement or situtation created by News Corp and followed by Nine in NSW the disconnect between cover price and margin no longer exists.
    The standared price will be and is for those on it 12.5% of C.P. At the moment the full margin results to from C.P. is approx 21%
    The accounts are billed directly by News Corp and NINE and the return procedure is as before.
    in this sense it is a gain for no delivery or take it that newsagents are now a subagent and are paid 50% of the G.P of the current cover price. Newsagent’s current situation is 21% plus delivery fee with no increases apart from the 12 monthly review.
    Surely with price increase and the no delivery enevitable situation newsagents will be better off as the publishers increases benefit on their way to prosperity or demise as either option eventuate.

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  • 5 Ian // Nov 8, 2019 at 4:05 PM

    There is also a rumour that News want to incorporate The Observer into The Morning Bulletin. If they want to convert people to the Bulletin maybe they should be up front instead insulting their readership.The older customers are the main readers of the paper and most aren’t keen on a digital format.

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  • 6 Tania // Nov 9, 2019 at 6:59 AM

    They are doing the same in Northern NSW with The Daily Examiner going from $1.90 to $2.50 also.

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  • 7 Mark Fletcher // Nov 9, 2019 at 10:13 AM

    Interesting Tania. Another play away from the big city spotlight. It will be interesting to see how it goes.

    1 likes

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