A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

News Corp. to charge for websites

“Quality journalism is not cheap,” said Murdoch. “The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites.”

This is Rupert Murdoch speaking yesterday at the company’s announcement of its results.

This is a bold move, to charge for news websites. It will be interesting to see if it happens and, then, the impact on traffic.  The plan is certainly generating considerable discussion online.  In the meantime, sites like AOL are busy hiring their own writers to create content.

I am not sure what I think about charging for content online.  You can’t feed families with a free model.  We need to see models like the News Corp. plan to test what will work and what will not.

What I don’t understand is the News Corp. policy on cover price for their print product.  The cost of producing newspapers has risen while cover prices, for the most part, have remained static over the last ten years.  Newsagents only make money from cover price.  In real terms, our return from newspapers has fallen over the last ten years. A quality distribution system is not cheap.

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Newspapers

Violating my retail space

pop_science_ugh.JPGMagazine merchandisers can be frustrating.  Too often, they move titles around and take liberties with our retail space.  Take the header card a merchandiser put in place to promote Popular Science in one of my newsagencies.  This blocks our coproate image header card.  I think, but cannot be certain, that they moved Popular Science to above the science magazines.  We usually have Scientific American in the top two pockets – to beacon brand the serious science segment.

We have told merchandisers they are not to move anything, change anything or put up displays without permission.  When they ignore this they disrespect our business.

Ugh!

I understand that publishers want to drive sales of their products.  The best way for them to do this is to partner with newsagents in a business like way rather than by taking over part off the business.  In the case of Popular Science, we have beeen told to place this title with men’s interests.  This is where we have most stock. a pocket in the science section is part of our ownco-location strategy.  Cursiously, the merchandiser did not violate our Men’s interests area display.

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magazines

Sony launches new e-readers

Sony overnight officially announced two new e-reader models: the Reader Pocket Edition (US$199) and Reader Touch Edition (US$299). They will be avauilable in the US in a few weeks. Sony also announced price cuts for books – dropping from US$11.99 to US$9.99. Once content hits a sweet spot and the devices have functionality consumers want sales will skyrocket and there will be an irreversable shift in medium.  Like with the iPod.  Business Week has a good perspective on Sony’s announcement.

The challenge for newsagents is the disruption to news and information distribution.  We are middlemen.  Over time, we become redundant.  This is why we have to create our own future.  This is why many of us are evolving our business model.

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Media disruption

Launching The Classic Clint Eastwood Collection

fhn_clint_eastwood.JPGWe are promoting The Classic Clint Eastwood Collection partwork (launched yesterday) at our counter – ready to capitalise on the TV advertising campaign when it kicks in. We expect this be a successful partwork given Clint’s current popularity across several generations.

Partworks continue to drive destination business for newsagencies thanks to the TV advertising.  I just wish they had better online support for newsagents who get behind them – so consumers could find locatiosn near to them from where to purchase.

In anticipation of questions I am likely to get from this blog post, not all movie titles have been released yet but I expect them to include: Dirty Harry, Unforgiven, Magnum Force, Outlaw Josey Wales, heartbreak Ridge, Kelly’s Heroes, The Enforcer, Pale Rider and The Gauntlet. These are the titles in the UK edition of the partwork.

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Newsagency opportunities

Knowing your market

clue_words.JPGWe have placed the latest issue of Lovatts Clue Words title above The Age newspaper thanks to the use of Margaret Pomeranz and David Stratton (from ABC1’s At the Movies) on the cover.  I am certain that Margaret and David will appeal to our customers and hopefully drive sales of Clue Words to people new to the title. It is small moves like this which can lift sales for an issue and show us off as the magazine specialists we consider ourselves to be.  Hopefully, David and Margaret will work their magic for us.

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crosswords

Promoting That’s Life magazine

fhn_tlife_aug0509.JPGThat’s Life is a hero magazine for our newsagency in terms of sales so it is natural that we seized the opportunity to drive sales when we receive marketing collateral built around a new campaign supporting the title. We have placed the display in the photo at the front of our newsagency, acting as a billboard to passers-by and to drive sales.

I love the marketing collateral for That’s Life as it presents a genuinely cheerful image at the entrance to our newsagency.

Here is what I know about That’s Life customers – they are loyal not only to the title but also to the newsagency.  I see this in shopping basket data.  They love the price point for the title.  They also connect with the pitch of: Laugh, Win, Love.

The loyalty we see in That’s Life customers is driven, in part, by our magazine Club Card loyalty program.

We will leave the display in place until the weekend, maybe shorter if sales drive us low on stock.

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magazines

Vogue turns 50

fhn_vogue_50.JPGLike many newsagents, we have given prime position to the celebration of Vogue magazine’s 50 years. The collateral is excellent, true Vogue style.  The multiple covers are stunning.

The launch of the issue has generated media coverage which should drive interest.

Vogue is an important brand to newsagents as it anchors our fashion segment.  It is a beacon brand around which we can build business for other titles.  The Vogue brand is especially important for those of us who carry editions from various countries.

We will leave this display in place for at least a week – depending on sales.

It is disappointing that newsagents who actively support the title were not given an opportunity to take on the boxed edition.

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magazines

Promoting Good Health magazine

fhn_goodhealth_sep09.JPGGiven the tremendous success we had last month, we are pitching the latest issue of Good Health at the entrance to our main magazine aisle – where we have our weeklies, women’s interest, food and gardening titles.

While the fixture is not ideal for this display, it works for us – customers buy off right off the display and that is all the matters.

The display is made easier thanks to the variation in marketing collateral provided to support the title.

The re-launch of Good Health has resulted in a better product which is easier for us to pitch.

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magazines

We are not our customers

gifts_sell.JPGWe are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers. We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers.  We are not our customers. We are not our customers.

This is a mantra we need to  play over and over in our heads as we consider new lines for our newsagencies.  Too often, especially in the gift and related departments, newsagents buy to their tastes and this stops the business from speaking to its customers.

The small boxes in the photo are a good example.  These overly bright things are not something I or anyone in our newsagency would purchase.  When I have shown them to newsagents they say that they would not work in their shop.  I felt that way too.  But we tried them.  They worked – turning faster than many magazines.  This was an excellent example that I am not my customer.

This started me thinking about why we get gift and other buying wrong.  I see the results of bad buying in the data for newsagencies from time to time – stock which turns at less than once a year.

Unlike other businesses where the owner can wholly define the business, newsagencies are controlled by many suppliers in the categories of magazines, newspapers, greeting cards and even books.  We are not brought up expressing our individuality.  We accept this when we buy a newsagency business. I think this is one reason we struggle with understanding about creating a point of difference.

Another reason is that we are not used to testing and letting data drive our decisions.  The data is there, newsagents tend to not use it.

We need to experiment more, really push the boundary of what we can sell in our newsagencies and be guided by what our customers like.  It’s their money we want after all.

We need to stop buying to our tastes.  We need to buy for our customers because, often we are not our customers.

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Gifts

Newspaper publisher declares Print is Dead

The publisher os the Bellevue Business Journal / Eastside Business Newspaper (in Wastington state) delcared yesterday “Print is Dead” when announcing the cessation of printing and an expansion of its online focus.

Joe Kennedy, longtime Publisher of Bellevue Business Journal and Eastside Business newspapers in Bellevue, Washington and former Publisher of The Valley Business Journal in Temecula, California has declared the print news industry “dead” and instead of printing newspapers, will be focusing time and resources on continuing to expand reach to readers online and through the use of social media.

“It’s no secret that the print news industry has been hurting for some time”, Kennedy said, “but with the amazing and exciting evolution of social media, it has become all but irrelevant. We have reached many, many more people online with our news sites than through the print papers for the past couple of years. It is about time that we focus all of our resources reaching the majority of readers online and where they want to be engaged.”

While not a major publisher and therefore likely to be ignored as a significant move, it is a significant move.  It will be interesting to see how widely this story is covered.

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Media disruption

New newsagency opportunity

I am aware (through the developer) of a new newsagency opportunity in an outer eastern suburb in Melbourne.  The new centre, due to open late this year, will have Aldi, Dan Murphy, Chemmart and Nandos in addition to the planned 300 sq metre newsagency.  There is plenty of free parking right in front.

If this is of interest to you, please make contact with me.

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Newsagency opportunities

Melbourne Gift Fair wrap up

The Melbourne Gift Fairs come to an end today.  While there has not been as much in the way of new product that we wanted to see, some excellent deals have been on offer.  Plenty of suppliers were prepared to negotiate on terms, making taking on new ranges more appealing from a cash-flow perspective.  Suppliers who are sensitive to the cash-flow challenges of retail today are more interesting to newsagents keen to expand their floor stock – especially in the lead up to Christmas.

One frustration is a few suppliers who refused to  permit their products to be places in newsagencies.  While this is their right, it demonstrates an ignorance of what a newsagency can look like today.

Gift fairs always present excellent margin and range opportunities – crucial opportunities in building a healthier newsagency, crucial opportunities in pursuing change.

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Gifts

The price of a magazine pocket in Canada

From Mag World, a Canadian publication on magazine retailing:

According to Shepard, a primary magazine pocket at a Gateway newsstand in the TTC has a list rate of $11,500 per year. The company’s most expensive location is Toronto’s Union Station, which sells primary pockets at annual rates anywhere from $12,000 to $30,000.

Read the article from which I lifted this quote here.

While I understand there is a considerable difference magazine retailing in Australia compared to Canada and a difference in transit retailing to high street and shopping centres, the numbers quoted make you think about the value of our retail locations.

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magazines

IMPG to launch online wedding ‘magazine’

Independent Digital Media, a division of IPMG, the owner of the NDD magazine distribution business, is set to launch TheKnot, an online wedding ‘magazine’ in October this year.

This move challenges the capital intensive print wedding magazines (some of which NDD distributes) with a more timely, more easily searched and lower cost to distribute product. The Australian has more on this story.  Also, check out the US website on which the local version is based.

Expect more announcements like this, especially in directory like categories, as weddings is.

This is a smart move by the IPMG business and while they will probably say that it will not impact print wedding magazines, it will if successful. It is also a move from which we can learn. Some magazine categories will disappear. IPMG is building a future planning for that, forcing change even. If newsagents act as usual when faced with major changes, we will complain about the IPMG move and expect someone else to develop our future for us.

As I said, I think this is a smart move. Kudos to IPMG for making the move.  We need to take notice.

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magazines

Instinctive magazine displays

frank_fashion_teen.JPGSometimes you have to break the magazine display rules to drive sales.  They do this really well in our Frankston newsagency by placing fashion titles targeting a young reader with teen magazines.  These titles work better in this location than in the women’s magazines aisle – how often do you see a teen or ealry twentysomething girl look in the fashion segment for magazines?

What our Frankston team does is a good example of the value of breaking rules sometimes.

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magazines

Plastic newspaper coming?

Plastic Logic plans to launch what they claim is the world’s first flexible screen e-reader early next year.  Click here to see a demonstration of the unit.  Forbes overnight published a story touting the new Plastic Logic unit as bringing electronic newspapers a step closer.

2010 is shaping up as the year of e-readers with several companies close to launching new products in this space for books, magazines and newspapers.

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Media disruption

Tapping into Robert Pattinson’s popularity

fhn_famous_aug3.JPGRobert Pattinson is hot right now if magazine editors are any judge.  He is on the cover of current issues of Famous, Who and NW.  We are trying to tap into this apparent interest by placing Famous next to our main newspaper stand as well as having stock in its usual location.  Who has just about sold out over the weekend and NW is already co-located in the ACP basket builder stand.

It is important we notice these trends as we can use them to sell more magazines.

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magazines

Promoting Cosmopolitan at the counter

fhn_cosmo_aug09.JPGWe selected Cosmopolitan for our prime counter display today because of the free Impulse scent with the magazine.  We only received one poster so we had to improvise.  The Just In bookmark has been included to try and draw more attention to the display.

I like how the Impulse offer with Cosmopolitan is attached to the magazine – at the lower left corner.  This makes displaying the title easier and does not take up the space you often find with gifts.

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magazines

Promoting Top Gear and fridge magnets

fhn_topgear_aug09.JPGWe are promoting the latest issue of Top Gear magazine (out today) and the fridge magnets giveaway on the back of the ACP basket builder stand which faces customers as they exit our men’s magazine aisle.  This location has been developed from a filler promotional space to premium space over the last eight months.  Hopefully it will drive excellent results for Top Gear.

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magazines

Where do customers look when browsing magazines?

flat_stack_magazines.jpgMost magazine publishers prefer their titles to be displayed on the flat stack- the flat shelf at the base of the magazine display.  It is the only place, in traditional magazine fixturing, where the whole front cover is on display. Publishers prefer this because they think this is where customers look.  Newsagents regularly receive bulletins from publishers and magazine distributors asking for this location.

Some publishers even go as far as asking merchandisers to move their magazines to the flat when in-store.  This creates tension in some retail situations – it is the retailer’s shop after-all.  (Merchandisers should not move stock without permission from the newsagent.)

My observations are that the majority of customers navigate to an area of a shop by what they see at or close to eye-level.  Once they are in the area they want, around 70% browse by what is in the fixture and 30% browse by the flat stack.

While this will vary from newsagency to newsagency, I think it is a mistake for p[ublishers to primarily focus on the flat stack when guiding newsagents as to product placement.

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magazines

Hallmark launches mobile greetings service

Hallmark has launched Hallmark Mobile Greetings in the US, for sending more creative greetings using mobile phones than a text message. The initial launch includes a small network of phone models in the US.  The company plans to make it available on the majority of mobile phone models and to permit messages to be sent from most major mobile phone networks to any other network.  each greeting is charges at US$.99cents.

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Greeting Cards

A good time to start a newspaper

‘This is a Fantastic Time to start a newspaper’ published by Gerson Lehrman Group is well worth reading.  Written from a US marketplace perspective, it argues that now is an excellent time to launch a newspaper.  The artline lists several reasons for this.  The last reason is the one which interests me the most:  Technology and innovation will change the business model.

We don’t see this in Australia yet, but it will come.  Our challenge is to be ahead of this wave by have alternative traffic generators in our businesses, shop firts which serve us and not one or two suppliers and an overall business model which leverages our position through the change with existing important suppliers like newspaper publishers.

The article is another call to action for it, not just about newspapers but about the newsagency model more broadly.

We start by cutting out inefficiencies in our businesses.  This means stopping some decades-old practices.  If a product or service is not profitable.  Stop.  No contract can force you to lose money.

We need to look ahead, over the horizon and not back at old practices.

We will make our own luck through this transition.

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Media disruption

Our July numbers

Our July numbers are show a healthy month, overall.  The sales numbers, compared to July last year are:  Art – up 14%; cards – up 9%, Gifts – up 200%, magazines – down 5%, Newspapers – up 6%, Ink – up 25%, Stationery – line ball.

There is good news inside the magazine department: food – up 7% (unit sales), men’s lifestyle – up 26%, music – up 15% (Michael Jackson), special interest – up 8%.  Women’s weeklies are down but our sales of these are choppy month to month.

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Newsagency management

Ducks and chooks attract customers

australian_poultry.JPGGiven the interest in my post last week about the chook on the cover of Burke’s Backyard magazine (Don featured chooks in his TV segment on ACA on Friday night BTW) I thought I’d write about Australasian Poultry.  This magazine is a good example of the special interest titles we sell in newsagencies.  These titles are important to us – they are our point of difference in the magazine department, they drive habitual sales and they are a growing category.  I know from postcode data that customers are prepared to travel further to purchase special interest magazines.  I know from basket data that special interest magazine customers are more likely to purchase more magazines.  There are two compelling reasons for us to embrace the special interest segment.  This is why I am expanding selected categories.

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magazines
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