Author: Mark Fletcher

Independent newspaper analyst John Morton and media economist Miles Groves have announced they will cease publication of their well-respected Morton-Groves Newspaper Newsletter. Forbes has the story including this quote from Groves writing in the final issue:

Instead of making the technology, personnel, marketing and product investments critical for success, industry leaders have accepted that desirable circulation levels are not sustainable and circulation declines are inevitable.

Many working with newsagents would not want news like this to be reported. My view is that the sooner newsagents accept that fundamental and far reaching change is impacting their core business the better. The change is an opportunity.

Checkout this 5 minute video by vlogger Danwei about newsstands, newspapers and magaiznes in China. Fascinating.

I’m told the Sydney Morning Herald today had a post it note type ad stuck across the masthead saying Don’t risk Debnam. 20,000 job costs to public services. Workplace laws to Canberra. Similar to the pitch at the SMH website (see above). Whacking a post it type ad on the front of the paper like this – for the State election this weekend – over the masthead really pushes the envelope in terms of brand damage. It politicizes the newspaper more than a traditional print ad.

It is six months since we sold our newspaper home delivery business. Time has shown this to be a wise decision for us.

We have eliminated the weekly loss generated by the home delivery business, freed up employees by not having to fix mistakes and lost newspapers, eased management effort by eliminating four employees and benefited by specialising in retail as opposed to splitting our attention. We have also eliminated some over the counter frustration.

Prior to the decision to sell, we had sought for some time to acquire other runs so we could grow a profitable distribution business. We had just over 600 home delivery customers but not all were seven days. Our financial modeling suggested that we needed around 1,200 with better than average street penetration to make the home delivery model viable.

Since we were unsuccessful in acquisition, selling was something we considered. For a year we thought about but could not bring ourselves to disconnect from the core newsagent function of newspaper home delivery. It was like we expected the world to end when we sold the run.

Selling the run did not bring our world to an end. The opposite has happened. Our retail business has flourished. Our old delivery customers still shop with us. None complain about the change in service provider. We’re better off and our customers are better off.

Given what I see as an inexorable march toward lower margin home delivery business I am glad to not have to balance the competing needs of home delivery and retail. I am sure that both will prosper but more as separate businesses than we have seen in the past.

I was surprised to see this stack of the free daily newspaper mX in front of a newsagency in Sydney this afternoon. There was another stack right in front of the newspapers. Some newsagents have asked me whether newsagents are involved in distributing the free papers. Based on this I’d say yes, some are. I’m not sure of the financial arrangements but I would expect something to be flowing back to the newsagent.

I was fascinated by the energy of some of the mX distribution folk, particularly down by circular quay. I saw one hand out 50 copies in a minute – he was really enjoying his job. Admittedly it was peak hour but 50 is great going. Even the best people I saw in London last year didn’t get close to that.

My office is not in the city and I have not seen the mX distribution process first hand until today. This afternoon was an eye-opener. Many commuters really do want want their free paper. mX is clearly well established in Sydney. One surprise, however, was lack of distribution points at the major bus stops I saw. There were over 100 people and no mX copies in sight.

I was in a petrol outlet this morning when a customer came in and asked if they had the AFL cards with today’s Herald Sun. The owner told the customer they had to go to the newsagent. The customer put the newspaper down and walked out. The owner then said to me that these newspaper promotions were “a waste of money”.

My takeaway was that newspapers are a distraction for this chap. He’s clearly frustrated with the product. His is a petrol outlet after all.

Publishers in their push to get into more retail outlets see their product treated as a poor cousin to the main product and while they may still get some impulse purchases, it is with the brand supporting promotions where they miss out.

Check out the American Express ad stuck on the masthead of The Age today and see another example of revenue coming before the brand.

I am astounded that this placement passed quality control. While Fairfax bean counters may like the dollars, the editorial team must wonder where this will end.