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How the News Corp. take over of newspaper home delivery from local small business newsagents is going

This comment from yesterday morning prompted me to share the tweets in this post:

We have had a 7day newspaper delivery for over 40 years. First by newsagent and in last 2 years by News Ltd contractor. The newsagent was excellent but the contractor is hit and miss. Some days we get paper some days not. It can be delivered anywhere fron 5am to 12 midday. Just recently it has been changed to a plastic sealed cover with paper being delivered flat. The driver must find it impossible to throw from vehicle. Our paper ends up anywhere from our neighbours yard to being on gutter or on the road. We also were told the late delivery is because the paper is coming from Sunshine Coast. Heaven forbid why we live in Brisbane.

These tweets, a selection of what’s out there, from newspaper customers speak volumes:

And this, relating to cutting supply in regional Australia:

The decisions read like the company plans to shrink newspaper home delivery to nothing.

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Newspaper distribution

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  1. Stephen Kimber

    Does anyone have advise on handing back a delivery route . What options are there to try to ensure deliveries can continue with a sub contractor or by a Newscorp distributer. Currently throw for Fairfax and Newscorp about 150 per day and deliver another 250 per day to sub agents – breakeven at best.. I would rather concentrate our efforts on improving and expanding the Retail component of the business.

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  2. Mark Fletcher

    Hi Stephen, Both Nine and News have processes for this. It starts with you advising them. That is the best first step. Make sure your notice to them is courteous and explains that it is not making money for you.

    Once the move is made, it will be bumpy for you and for your current home delivery customers – no matter what the pub fishers say. The key for you is to let your customers know in your own words and in your own timing, so they understand the move.

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  3. Curious

    Stephen I’m guessing you’re in a regional town, as runs have been taken back from city newsagents.
    From what I’ve seen in country towns if you hand your run back then that’s the end of home delivery and your commission is cut to retail.
    Unless there’s another newsagent, in this day and age who on earth is going to take on a job like that, even if it makes money.
    I’m curious as to what’s been the process (time/notice) of other newsagents who have gone down this path.

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  4. Graeme Day

    Curious.-
    Your first statement seems correct and the second -the replacement home delivery service is probably the majority situation in a Country Town. The current legal obligation is three months notice to the publishers and 6 months notice from them is the contractual arrangement for eother party to dispose of or acquire from.
    However there are a number of external factors to consider before an encumbent should take such a move.
    1. Profitability including “Mail Run” as well as Town Delivery.
    2.Shop Sales fro 20.9% o 12.5% could be a significant drop especially with sub agents and local news papers at 12.5% for the subs however much more with delivery fee for the Local Paper with 25% of retail price as well. This of course depends upon the numbers delivered.
    3.Alternatively if someone else does take it on, they may already be an opposition in Retail such as Homeware and Gifts and want the extra clientele.
    4. Customer loyalty is extremely strong in Regional areas depending hugely upon the size of the Town The community loylaty ,if left no other option, for service may forgive for it will be up to the publisher if they pursue the Home Delivery at all. This is a real threat anyway however it has to be clear that it is a “cause” issue and not just an option, which reverts to 1. Profitability.
    4. If undertaking such a program if may be wise to explain to your customers the problem te lack of profit however you may be able to operate IF they were to pay ex amount extra in fees. This would have to be a difinitive amount and time frame say to be renewed annually or if something externally happened such as publisher closure etc it is out of your hands. One could ask for 3 monts subscription in advance for the Local paper delivery of all those that do not subscribe the the majors presently.I would think the process is to do your sums first -in each area for consumer and form each supplier. Then talk with or communicate with those that are your customers about the choice that suits you.
    I don’t see the majors doing a Sydney and taking back the “run” as such for the distribution costs are there now and would be the same as is to the Town affected however they may, if it suits them, and this is what has been and is currently being conducted, is to close their distributionto to a small outlet by trying to get a newsagent in a nearbly larger Town to do the last yards for them.

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  5. Curious

    Graham some hand profitable runs back because of other reasons, one being its almost impossible to get staff and the other is they are getting old and tired and don’t want their life controlled by 7 day, early morning commitment any more.
    In our case most subscribers paying direct to the 2 majors so it’s not the same with customer loyalty any more, there’s a whole new generation of customers we’ve never met, unless there’s a delivery issue.
    Would be interested to know of those who have handed back runs recently how many were then picked up by a nearby business, or was that the end of home delivery in their town.

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    • Graeme Day

      I believe you have answered your own dilemma.
      What other people have done is immaterial and not connected to your situation.
      Each Town and the circulation experience is different as you point out with the Major publisher s being the biggest consumer by your customers and they are subscription only.
      This part of te industry is dying, it’s just a matter of timing either you just wait or take the innative and move on.

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  6. Mark Fletcher

    Curious, I quit my sizeable suburban Melbourne run in 2006, sold it for a six figure sum. Those were the days. I did that because back then I saw no upside for print newspapers and because I wanted to stop running two businesses and focus purely on retail. Retail took off as a result.

    I understand the worry of what if a competitor takes it up. A good retailer, which I suspect you are, will back their retail skills and not worry about the future of the run.

    Every day you own distribution and retail is a day holding back one or the other, because of the conflict they present to each other.

    Given what you have said here already, I think you know the answer.

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  7. Steve

    I get it home delivery is on its last legs. There is a massive shortage of labour at the moment and nobody wants to start work at 4am for the crumbs paid by the major publishers. Anyone recently tried to get a wrapping machine replaced or serviced lately? We are just 1 COVID case away from ceasing our run. The problem is in rural towns such as my own we also provide early morning deliveries to subagents off the main highway as the delivery trucks cannot access these locations. My question to the publishers is who will provide these deliveries when we cease home delivery? Who will service the tourist parks and motels, the nursing homes and service stations Certainly not us at 12.5 per cent !

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    • Graeme Day

      Steve, Once you give notice to hand the delivery back the publishers will try to convert the current consumer to electronic media subscription and./or if this fails, try to get someone else to deliver it for them if this is uneconomical they will then do what you are doing. Cease delivering. As for the subagents well the subagents if they value their customer they have no option other than to purchase the copies off a reseller such as yourself for cover price only ..for as you say you can’t sell at a discount when you only receive 12.5%.

      Yes, unfortunately Home Delivery is a business similar to the explanatiuon given in Hemingways book “for Whom The Bell Tolls” when a person of interest asked a businessman “How does a business go broke?” the business answered “slowly at first, then suddenly!”

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  8. Michael Lynch-Gardner

    I live on the Central Coast of NSW and the previous delivery contractor was faultless. When News Ltd changed a month or two ago to a state-wide contractor (so I’ve been told) things went awry; no paper two out of four days last week with one day arriving at 0830. Profuse apologies from News but no improvement; we await Monday. Does anyone out there know who now has the contract? I spoke to a real person on Saturday – not sure how except I dialled the main switchboard – and he implied the deliverers were employed by News which I find hard to believe.

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    • Graeme Day

      Hi Michael, If you are talking about the sale of Gosford Newsagency ownerd by Hans and Josephine delivery performed by Robert for 23 year ten yeas it’s a mess.
      They don’t make them like Robert and yes NEWS CORP have sub cobtacte the delivery, it’s no where near what newsagents did for the publisher since the very beginning 100 odd years ago.
      Keep trying the News Corp circulation Subscription office as subscribers in Gosford within our Apartment block have the same problem It’s taken 6 weeks for one customer to get a Telegraph 7 days.
      Mon to Fri okay Sat -sometimes and as for Sunday he is still waiting.
      the problem as I see it is that the personel taking your ‘call passes the message on te Distributing Depot head and then there are two sets of Delvery people. Mon to Fri and weekends and maybe 3 different one M to F then Sat then a different one Sundays.

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