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

Author: Mark Fletcher

Microsoft and New York Times unveil new online reader

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According to the Microsoft issued press release the New York Times developed Times Reader (shown above. Image source: Microsoft) will greatly enhance online readability of NYT content. The release claims the reader has a newspaper look and feel with continual updates and other online benefits.

“The Times Reader is a great next step in melding the readability and portability of the newspaper with the interactivity and immediacy of the Web,” said Arthur Sulzberger Jr., chairman of The New York Times Company and publisher of The New York Times. “We continually look for new ways and the latest technology to deliver our distinctive brand journalism to satisfy our audience’s changing expectations for consuming media.”

This announcement by Microsoft and the New York Times connects two very strong businesses for mutual benefit. Kudos to them. While it will encourage some to remind us that newspapers have a bright future, the reality is that Times Reader is offered as candy, to move offline consumers online. By enhancing the consumer experience of the New York Times branded content online people will make the transition from printed page to online. Given Sulzberger’s previous comments, this has to be his holy grail. Makes sense.

From a selfish Australian newsagency perspective, where more than half my current foot traffic is for newspaper purchases, I’d like to sell prepaid access to newspaper websites and thereby help the transition. It’s better to ride the wave for a bit than be dumped early in the roll. In the meantime I and others continue to evolve our retail newsagencies in response to the changing world. Unfortunately we’re in the minority.

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Newspapers

Backsliding in pursuit of sales: Google Adwords wins

Our April 13 cold turkey from our Google AdWords campaign promoting Inkfast, our online ink and toner business was short-lived. While sales remained strong it was the knowledge that we’d sell more to new customers which brought us back to the nipple of Google. What we have learned is to be smarter about when to run the campaign. There are more tyre kickers at certain times of the day. Having now tested Google against a radio (3AW) and fax (3,000 numbers) campaign, I know we’re getting more sales per dollar spent with Google than elsewhere. No wonder advertising revenue is challenged elsewhere.

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Uncategorized

Monthly magazines doing it tough

Comparing the performance of weekly magazine titles to monthlies and looking only at titles in the TOP 200, the data I am seeing from newsagents suggests that monthlies are struggling whereas weeklies are growing. If my small sample accurately reflects a national trend it’s proof magazine buying habits have changed.

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magazines

RIP Explode magazine

Despite having some fans as documented here recently, Explode magazine has been terminated according to a report from Mediaweek this morning. If I were Pacific Magazines I’d keep the website and build the brand from there. That’s where the target age group is.

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I didn’t need more Reader’s Digest

Magazine distributors can be like credit card companies. If you don’t need it they’ll give it to you anyway. My bank wants to give me more credit even though I have not used even a quarter of what they gave my on my card. “You’ll never know” was their justification. The distributor of Reader’s Digest increased my supply by 50% despite usually selling only 50% of what I used to receive. The increase made no sense. There was no business case. All this increase would do is suck cash from my business as I would return the unsold stock a month later and get the cash back a month or two after that. In all I’d be out the cash for up to three months. The benefit for the distributor is they would have my cash. I can’t imagine that Reader’s Digest would be all that happy.

Thankfully the magazine distributor is going to correct the situation. My point is that it shold not have happened in the first place. Many newsagents would not complain. The end result would be less space, time and money for more successful titles.

The magazine supply model in Australia disadvantages newsagents. Supermarkets and others would not face the situation I faced with Reader’s Digest. Despite providing high quality sales data on time, there are still suppliers to newsagents who ignore this for their own commercial gain.

That’s no way to treat a trading partner.

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Industrial action hurts newsagents, gives supermarkets a free kick

Industrial action by delivery drivers stopped magazines getting to many newsagents yesterday. Many newsagents in many shopping centres were without current stock while competitor supermarkets had stock – magazines are delivered to supermarkets in different runs and were far less affected. The harm of this action is that in newsagencies more than 50% of sales of weekly titles occur on the day of issue. This means that newsagents will have lost hundreds of dollars in sales for Take 5, That’s Life. I don’t care about the grievance the drivers have with their employer, it is appalling that they hurt small business newsagents and give a free kick to supermarkets.

I would expect a knock on effect from the action since future supply figures are based on sales data and the fall this week will not be understood by computer models unless someone intervenes and quarantine data.

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Newsagency challenges

Vogue leads online at Melbourne Fashion Week

Vogue has has kicked its online play up several notches with its coverage of Melbourne Fashion Week. It’s website, which was already attracting excellent traffic (see earlier item) will have won new visitors many of whom will stay. What this means for the print edition will only be seen with time. If consumers get their fashion fix online then maybe they feel less compelled to purchase the magazine? It’s unchartered territory and while the publisher will say there will be no impact, there must be. I’m not saying the magazine will ultimately disappear. I am saying sales will fall as a result of an excellent website under the same masthead.

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More on newspaper circulation figures

Considering the newspaper circulation data published last week and knowing the data newsagents gather, it would be easy to report on sales by title by day of week for any period and to break this down by newsagent, home delivery and sub retailer. For newsagent sales one could even report on down to quarter hour intervals. This type of paid copy sales data would have to be better than ‘circulation’. This data has been available for years. Around 50% of newsagents have a current industry approved computer system. In Victoria this is closer to 100%. The data is recorded according to industry agreed standards.

I use this data in my own newsagency to measure and grow newspaper sales. From a business perspective I can bank on paid sales whereas I cannot bank on promotional copies.

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Newspapers

World Cup magazines hot

Any magazine with a good World Cup cover story will sell well over the next eight weeks if the current crop are anything to go by. Even the series DVD is walking out the door. It’s helping the struggline sports category win some customers back.

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Newspaper circulation figures vs. paid copy sales data

When newspaper distribution was deregulated in 1999, newspaper publishers negotiated contracts with newsagents to distribute newspapers. Contracts covered home delivery, retail and distribution through sub retailers (sub agents) and they continue today at the behest of publishers. This means that newsagents are the only conduit through which paid circulation passes. Newsagents provide sales data to publishers at least weekly, giving publishers accurate data for sales reporting across their three key paid copy distribution channels of: home, retail and sub retail. I would have thought that advertisers would be more interested in paid for circulation data rather than the current ‘circulation’ data available.

I make these comments in the light of recent circulation figures claimed by publishers. I am curious as to where the sales increases have been achieved.

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Newspapers

One for the independents

Sue Dunlevy, writing in the Daily Telegraph (Apr. 21) complains about the amount of time one has to spend in the queue at supermarkets to get service compared to the “corner shop”. Dunlevy poses a valid question:

CAN someone please explain to me why we can play movies in our cars, send emails from McDonald’s and take photos with our phones, but we can’t get rid of the supermarket queue?

At newsagencies, service is faster. Sure there might be a queue, but I bet it moves much faster than at a supermarket. As Dunlevy points out in her article, you’re more likely to see the owner manning a register in the busy time at a corner shop (and a newsagency). At Coles and Safeway in the busy time you’ll find managers a long way from the check out counter. Newsagents are often at their counter.

Supermarkets are built around check out queues. Look at their configuration. It’s about regimentation, control. Newsagents offer a more flexible and customer friendly shopping experience. It’s this regimentation which bigger companies like. Look at Vodafone, they have Coles on 16% commission and newsagents on 5% commission yet newsagents provide better service. Apple did a deal offering music download recharge for iTunes exclusively through Coles while newsagents could have provided better service.

Dunlevy goes to the edge with her criticism:

It’s worse than a pap smear and more stressful than a visit to the dentist – but you have to endure it at least once a week to feed your family.

The alternative is to find a local shopping centre with good newsagent, greengrocer, butcher and small supermarket. You’ll get local (faster) service, access to greater range and less stress from the slow moving queues at Coles and Safeway.

Over the last ten years newsagents have innovated and brought new products and services to their counters, they have embraced technology to improve the accuracy and speed of transactions. They have enhanced customer flexibility. If they can do this at the small business end and still usher customers through quickly them why not supermarkets?

Dunlevy’s article is encouraging reading from a small business perspective. Good on the Daily Telegraph for giving space to this issue.

And while we’re on queues I can’t let the topic pass without observing that Australia Post is as bad as ever. The line snakes through the government owned outlets with either side of the line appropriately littered with impulse purchase items (which have nothing to do with postage).

Dunlevy ends her piece suggesting it would be good if consumers took action and abandoned their full trolleys. While that may be impractical, a good start wold be to buy newspapers, magazines, greeting cards at newsagents. The price is the same, the range far better and the service faster and more enjoyable. A dollar spent on a newspaper, magazine or card at a newsagency is, I suggest, more efficient for the economy than a dollar spent at Coles or Safeway.

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Newsagency challenges

The Economist on media disruption

Andreas Kluth has written an excellent article, Among the audience, which is published in the current issue of The Economist. Kluth writes about the disruption being felt by mainstream media and in particular, the impact of high-speed broadband. He writes that its advent represents a true revolution in the way we communicate. He says that whereas in the past media was a push down affair from editors and proprietors, in this new wired world it is about participants. “This has profound implications for traditional business models in the media industry, which are based on aggregating large passive audiences and holding them captive during advertising interruptions,” Kluth writes. The more articles like this from Kluth are published the bigger the snowball of change rolling down the hill. The article is well worth reading.

While most media companies are of a scale and diversity to cope with and, indeed, embrace the coming change, at the in the supply chain newsagents and newspaper delivery people are yet to adequately accept that change will happen and what it means for their businesses.

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Media disruption

Gloria Jeans to sell Daily Telegraph at 50% off?

It’s been suggested to me that News Limited and Gloria Jeans have reached agreement to sell the Daily Telegraph (and probably other News papers in other cities) in Gloria Jeans coffee outlets at 50 cents. If it happens it would follow the Fairfax Starbucks deal. It would be nuts as it confuses consumers and discounts the value of the masthead. In my own situation, my second shop and two other outlets sell The Age at full price while Starbucks a few feet away sells it for 50 cents. Sales in the centre have not risen since the move.

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Newspapers

New Matilda article changes tune on newsagent deregulation

When first published Wednesday, Nicholas Gruen In Re-imagining economic reform, published at the New Matilda, wrote that (among other things) that most economists agree that newsagents “still need some old fashioned deregulation “. I emailed Gruen asking him to elaborate on this. He responded with: “Perhaps it would be worthwhile investing some of your own time explaining what claim you are referring to, what your own perspective is (if any and so on). Do you have any idea what I have in mind regarding the suggestion?” I quoted his words back at him and included: “I’d be interested in knowing what old fashioned deregulation newsagents need. Since it’s a published article I consider it reasonable for you to justify the opinion. My perspective does not matter. However, I own a newsagency.” I note that yesterday, the article was changed and the reference to newsagents removed.

There is a misconception in many circles that newsagents are protected. They are not. We were deregulated in 1999. Supermarkets, convenience stores, petrol outlets, coffee shops all get magazines directly from the suppliers. They choose the titles they carry. Most carry the top 100 or so titles. Newsagents don’t have the luxury of controlling what they receive. We know from the recent cash flow study that 65% of magazine titles in newsagencies are cash flow negative. This would not be the case if newsagents could control the titles they received and the quantity. The government deregulation push which was overseen by the ACCC has left the small business channel severely disadvantaged.

Footnote: late last night Nicholas Gruen emailed me saying, in part: “The list was from an article I wrote a few years ago, and I thought it was current. On reviewing the situation, I find to my dismay that there has indeed been considerable deregulation since I last looked! Please accept my sincere apologies for my oversight. I know it can be irritating to read things in the press that are inaccurate and do my best to be accurate and failing that to correct inaccuracies when I become aware of them.”

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Newsagency challenges

Auto Supermarket magazine closes

ACP has announced that the current issue of Auto Supermarket magazine is the last to be published. It’s not surprising given the inroads being made by online offerings where new content is available sooner, navigation is easier and the publisher costs lower. ACP will maintain its connect with buyers and sellers through the various websites it’s parent owns, newsagents currently have no such connect with online classifieds.

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Media disruption

Newsagents lose money on Betcard

Betcard was touted to newsagents as the next big thing. It was going to revolutionise gambling. In NSW especially the state newsagent Association, NANA, got right behind the opportunity. It seemed a sure thing since newsagents were told that Saatchi and Saatchi (as reported in B&T) and Channel Sports were behind the betting play. Newsagents were asked to prepay for Betcard stock. More than two years on, newsagents are chasing a refund for the cards they purchased. There’s not a word from Betcard nor the companies touted as being behind Betcard nor from the NANA Directors who so strongly supported Betcard to newsagents.

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Newsagency challenges

Newsagent has magazine supply contract canceled and wins award

Pendle Hill Newsagency has had their magazine supply contract canceled by Network Services Company because the owner did not complete a one week training course as required by the contract. While I am not about to get into the rights and wrongs of the Network decision, it is worth noting that the newsagent last night won an award at the Holroyd District Business Awards. They were nominated by their customers. So, the people who matter most to any business reckon that these folks are doing a good job. Whether they attend a mediocre industry training course ofr five days is irrelevant since there are other ways to measure if they are good business operators. Rather than unilaterally canceling the contract, decision makers might have benefited from visiting the shop first. ph.JPG

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Uncategorized

Are lotteries moving out of newsagencies?

There is noise among newsagents that lotteries are moving away from them to clubs and big business. Getting a straight answer from Tattersalls, Golden Casket, NSW Lotteries, Lotteries SA and LotteryWest seems to be a challenge. If newsagents lost lottery traffic it would severely impact as they rely on habit driven lottery traffic to pull sales of newspapers and magazines – fixed price low margin products as are lottery products. Governments, State and Federal, ought to be interested in this. Newsagents have done an excellent job making lottery products accessible across the country. Now that brands are well established it would be grossly unfair to move the products to other channels.

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Newsagency challenges

Social networking evolution

The folks at JibJab have been testing JokeBox for several months. It’s a free social networking site where you can upload jokes, funny emails and the like and share them with others. In the three month beta 25,000 items were posted according to Paid Content. Independent retailers used to comfort themselves that there is nothing like across the counter customer interaction. While the Internet is yet to replace this, sites like JokeBox take this interaction further. On another level, what’s good about JokeBox is that it’s personal. I can be at the centre of the entertainment and for many this will be compelling.

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Media disruption