Author: Mark Fletcher

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.

I am off too the second day of the two-day conference in Sydney which is being held as part of Magazine Week today.

While some on the magazine publishing and distribution side are working hard to strengthen their relationships with and support for newsagents, we, all of us, are only as strong as our weakest link.

Every time magazines are oversupplied newsagents hurt, other publishers suffer and the reputation of the distributor in question is tarnished.

Every time a retail competitor of a newsagent gets a better deal, promotion of some other benefit not available to newsagents you strengthen their position and weaken that of newsagents.

Every time newsagents are under supplied you reduce the opportunity for full newsagency sales potential to be reached.

Every new title distributed without consideration of the cost of newsagent floor space, labour and inventory cost is an additional burden which other channels most likely do not have to face.

Every time a newsagent over claims on returns the entire channel suffers.

Every early return which leaves a newsagency with less floor stock than recent average sales harms the newsagency, the newsagency channel and the publisher.

The Australian newsagency channel could have a bright future in magazine sales if we lifted our professionalism, were supplied based on sales, treated fairly when it comes to returns, rewarded for our support and respected in terms of title ranging. Achieving this depends on all stakeholders having common goals.  Right now, not enough of us stakeholders do.

Like many newsagents I suspect, we received stock of Pat Callinan’s 4X4 Adevntures last week.  It’s the first time we have received this title.  Given our sales of 4X4 titles, the price point and the thickness of the title, I would have preferred to receive three copies to start with.  I’d draw down more if sales warranted.

Magazine pub lispers and distributors need to stop using newsagencies as their warehouses.  We should have no more stock of monthly (or longer) titles than could be reasonably sold in 30 days.  As it is with Pat Callinan’s 4X4 Adevntures, we have been supplied to satisfy a sales expectation of three months.  I’m not making enough money to justify warehousing the title for there months.

I have recent experience in the supply chain to homewares stores.  In this retail channel smart suppliers have implemented just in time supply principles and thereby eliminated the need for retailers to warehouse stock.  They have done this out of respect for the tough conditions in which retailers find themselves today.  I’d like to see the same implemented in the newsagency channel.

If a title has an on-sale of more than a month, introduce multiple drops aligned with sales expectations.  Stop using small business newsagents as the warehouse.