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

Author: Mark Fletcher

The eBay after market for magazines

More and more Australian magazines are making their way on to eBay even before they come off the shelves. Current issue copies of Woman’s Day, New Idea, Filmink, OK Australia, TV Week and Limelight are listed at a premium of around 25% above cover price. Shipping can double the price. If eBay works then why not? The price of the products is a surprise though.

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magazines

Famous launch anticipation

It’s not often you get customers asking about a new title days before the first issue has arrived in store. Famous is no regular magazine launch. Pacific Magazines is doing plenty right with this launch. Newsagents have received excellent pre-launch material along with some champagne. The marketing groups have been engaged in strategies for driving sales. And, now, the consumers are having their interest nicely piqued thanks to their advertising campaign. Monday will be interesting. Once we’ve found real-estate in the already full women’s weeklies section to display the title we’ll await sales results with anticipation. So far, Famous is looking like the best launch so far this decade.

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magazines

Magazine cash flow briefing

I’ve been leading a four month study into the cash flow implications of magazines in newsagencies. The first industry briefings have been scheduled and the details can be downloaded here. At this briefing I will outline the impact of cash flow negative titles and present new evidence of the impact on cash, month by month, of the current magazine supply model.

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magazines

Playboy – an online success story

Further to my August post about the then just announced Playboy digital edition: Christie Hefner, talking about her company’s fourth quarter earnings this week said that they now have over 16,000 subscriptions to the digital edition of Playboy and that new subscriber growth of 50 to 100 a day. That’s a very successful digital magazine launch. No wonder adult magazine sales continue to fall in newsagencies. (Access to the transcript of the Hefner conference call courtesy of medisstockblog.)

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Media disruption

Madison turns 1 and turns a profit for my newsagency

Madison magazine is now one year old and in my store it’s just become profitable. We measure the profitability of a magazine by it’s net cash contribution – after allowing for real-estate, labour and stock costs. Indeed, Madison is more beneficial to my business than more established titles such as Ralph and FHM. Madison joins the 30% of titles I receive which are profitable. In the Women’s Interests category, where Madison resides, it’s one of ten monthlies we feature – a position earned through sales success. The biggest challenge to sales growth for Madison in newsagencies like mine is to have enough stock to display the product adequately. What we receive has to be balanced by the publisher’s business model and what represents the best return.

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magazines

High Street Britain 2015

I have now received a copy of the full report from the UK Parliament All Party Small Shops Group report released yesterday. Download the report here.

The recommendations include:

• ENCOURAGE THE TRANSFORMATION AND INNOVATION OF THE POST OFFICE NETWORK
The Government should directly support and expand the specific services offered by the sub
post office network.

Comparing British retailing to Australia this could reasonably be translated as a call to the government to support newsagents. In Australia our government competes with newsagents through the government owned Post Offices.

This report is important reading for small businesses and legislators alike. It’s as relevant here as it is in the UK.

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Newsagency challenges

UK parliamentary committee report supports independent retailers

A report by the UK Parliament All-Party Small Shops Group released yesterday called for the creation of an independent retail regulator to stem the power of supermarket giants. The report says supermarkets are driving small shopkeepers to financial ruin. According to Reuters:

The fiercely competitive 120 billion pound grocery market is dominated by four acquisitive companies; Tesco, Asda, part of Wal-Mart, Sainsbury and Wm Morrison.

These companies, along with smaller rivals like Marks & Spencer threaten the livelihoods of those running Britain’s 278,630 small retail outlets.

The small shops report singled out convenience stores, newsagents, off licenses and specialist retailers as most vulnerable to the power of large retailers.

“Evidence from contributors illustrates that large retailers will compete using ‘conventional’ means such as competitive pricing strategies on key footfall generators.”

The report, called “High Street Britain: 2015” said poor performance of a large retailers could be considered anti-competitive if compared with smaller retailers competing in the same catchment area.

In 1999 the Senate held an enquiry into retail matters which touched on similar ground. sadly nothing has come of their report, despite the efforts of committee members such as Senator Andrew Murray of the Australian democrats.

That newsagents have been named in the UK report as among the most vulnerable is no surprise. I’d expect a similar situation here. One only has to look at how Coles and Woolworths have used their might to take the cream of magazines and newspaper business from newsagents. Look at the Vodafone scandal – Vodafone gives Coles 16% commission while newsagents get 5% for the same work. Look at iTunes. Apple did a deal with Coles and cut out newsagents.

The sooner the government gets serious about small business the better for the Australian community.

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Newsagency challenges

Famous pre-launch activity building

Famous, the new weekly from Pacific Magazines, launches next Monday and Pacific are actively engaging with newsagents in promoting the title. The latest information – where to place the title, target market and positioning information – came with a small bottle of champagne. Compare this to the launch of Star in the same segment last year – the product arrived on the doorstep. The Pacific approach is building anticipation among newsagents and employees.

While on launches, the launch issue of ZOO is out of stock in many newsagencies just two days in. It’s free so no surprise there. However, it says something about their advertising and marketing that people came in asking for the title.

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Sports Illustrated swimsuit issue: print, online & iPod

The New York Times reports (subscribers only) that the Sports Illustrated swimsuit issue will be simultaneously released on multiple platforms. Content is being tailored from each. This is a good move for their brand and it won’t end there – there are more platforms savvy publishers can use to sell their branded content.

As a retailer I’d like to be able to sell online access and or download tokens with the product – this would at least give me a clip as readers crossover to become viewers. Okay so it may speed the crossover but I think not.

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Media disruption

Happy Valentine’s Day – buy a card at your local newsagent

I receive emails regularly from people reading this blog who ask just what it is an Australian Newsagency sells. In addition to news, information and dreams, we also sell emotions. Greeting cards are a key part of our business, especially at seasonal times like Valentine’s Day. Go into any of Australia’s 4,600 retail newsagencies today and you’ll find the best range of Valentine’s Day greeting cards. It’s this seasonal point of difference when newsagencies shine. It’s like church at Christmas, you kow, when the priests ought to pounce on the once or twice a year church goers and make hay while the sun shines. At seasonal times people think of newsagencies because of the range of cards and because it’s a ‘safe’ place to buy cards. You don’t see many blokes buying cards in a supermarket. So, seasons like Valentine’s Day give newsagents an opportunity to restate their point of difference and to remind suppliers about our unique position on the retail landscape. We use the Valentine’s Day traffic to promote our range of magazines, art supply specials and stationery. Here’s what part of my store looks like for Valentine’s Day:

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The day is far from over but already at my place we’re up more than 100% on last year. Love is in the air.

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Newsagency challenges

Record Monday sales for weekly magazines

I’d like to think it’s my shop and the great team – today our sales for New Idea, Woman’s Day and TV Week were up 30% on a usual Monday. Given that we usually sell around 60% of the seven day sales on a Monday it augurs well for the rest of the week. Good interest in ZOO as well today – including girls asking for the magazine.

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magazines

Radio becomes TV: the Macquarie Radio move

The new Macquarie Radio online video service takes the radio network further online by offering regular news updates for download and playing in iPods and similar devices. While the video casts are pretty basic at the moment, they are a start. With some better video content and some funkier production values this could achieve their goal of connecting with a new audience. It will be more interesting if they use this new medium for chasing a new audience for their existing programs – beyond the current podcasts for Alan Jones et al.

More media companies will embrace online by releasing previously packaged content for per story purchase and download. I’d expect magazines especially to look at the Macquarie move and consider making their best stories available for download. Punters who love Angelina and Bard, for example, will be able to buy all the stories about the two rather than buying a whole bunch of magazines.

The stories want to be freed.

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Media disruption

ZOO scale out soft

ZOO, the new weekly men’s magazine launches today. We received 29 copies. The pitch is that we offer issue #1 free to males buying a newspaper. At our current rate we’ll be out of stock by 11am. A more appropriate launch scale out would have been 150 copies. Hopefully we’ll get more stock by Wednesday.

Publishers launching new titles would do well to look at how Notebook, Madison and Real Living were launched last year. Good supply quantities to enable bold in store displays. Stock sells stock.

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magazines

Preparing for magazine competition

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Pacific Magazines and ACP Magazines both released merchandising units for New Idea and NW respectively last week. I’m guessing this was done in preparation for the arrival of Famous. As I have noted here already, real-estate is the issue in newsagencies with all available space currently used. The real-estate Famous takes will have to come from somewhere. Publishers want to see their weekly titles at the counter whereas newsagents would prefer higher margin product. In the magazine aisles the battle is tougher with many newsagents already over allocated with titles space wise.

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magazines

Magazine snot

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Product giveaways attached to the cover of magazines are popular with consumers and regularly used by publishers. In most cases there is a good sales kick. While retailers (like me) occasionally get frustrated at the display challenges we embrace the opportunity in pursuit of sales. This month’s Australian OK! magazine has a sachet of coffee granules attached to the cover. It’s a nice giveaway. The problem is the glue is poor quality, meaning that the coffee sachets fall off and the glue on the magazine cover looking like snot. Not a good look. This reflects badly on the retailer and makes for considerable mess to clean up.

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Is Google a good thing?

Putting all this together, we reach the conclusion that, on the one hand, Google is cool. On the other hand, Google has the potential to destroy the publishing industry, the newspaper business, high street retailing and our privacy. Not that it will necessarily do any of these things, but for the first time, considered soberly, these things are technologically possible. The company is rich and determined and is not going away any time soon. They know what they are doing technologically; socially, though, they can’t possibly know, and I don’t think anyone else can either. These are the earliest days in a process of what may turn out to be radical change. The best historical analogy for where Google is today probably comes from the time when the railroads were being built. Everyone knew that trains and railways would change the world, but no one predicted the invention of suburbs. Google, and the increased flow of information on which it rides and from which it benefits, is the railway. I don’t think we’ve yet seen the first suburbs.

This, the final paragraph from John Lanchester’s article, The search engine that could, the cover story in the A2 section of The Age today. Unfortunately there is not a link at their website. The original article can be found at London Review of Books website where it was published on January 26. The article refers to the excellent book, The Search, How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture by John Battelle (which I reviewed here last year).

Lanchester’s questions, comments and opinions are worthy of consideration. However, his piece is also about Wikipedia, Yahoo, Craigslist, News Corporation and the other global brands leading more and more people online and away from traditional places of social and commercial interaction. Who knows where this will end. Lanchester’s piece is timely and considered. I’m glad The Age has given the space necessary to run the whole piece on its pages – in the UK the Guardian ran an edited version. I’d like a follow up from a local perspective since we’re not feeling the impact here which is being felt in the US, yet.

It would be good to see The Age take a step further and open discussion, maybe through a public forum, on the issues canvassed in the article. This would be a good way for the newspaper to strengthen its community connection and demonstrate its role in the changing world.

In the meantime, I hope that newsagents, the independent small business owners who sell the bulk of newspapers in Australia, read the article and understand the implications for their businesses.

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Media disruption

Deconstructing Craigslist

Rich Skrenta has posted an excellent deconstruction of Craigslist – the online classifieds portal many newspaper publishers credit with hurting their classified business. Skrenta’s analysis is more valuable and readable than the spin and bitching passed off as journalism published about Craigslist in some newspapers.

While Craigslist is yet to have any impact in Australia, publishers are prepared, having learned from the experiences of their US counterparts. Fairfax has Cracker, a free classified site with many Craigslist like elements. News Ltd has truelocal and a host of commercial classified websites which I’d expect to see brought together in the next few months. Sensis (Telstra) is even ready with their Trading Post website – even if their value proposition, beyond brand recognition is not that compelling.

As Skrenta points out, Craigslist is the Internet equivalent of the notice board at the laundromat or corner shop, except that entries, notices, are exceptionally well classified.

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Media disruption

Finally, calendars are moving

We have finally found the sweet spot to make calendars sell in my store. A $2.00 price point. $19.95 and $24.95 calendars are being sold for $2.00. And I’m not alone. There are several stores near mine in the same boat. $12,000 in stock being sold for under $1,000. It’s a shame and a lesson.

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Newsagency challenges

Network Ten DVD giveaway of little consumer interest

Network Ten gave away a DVD with episodes of three programs with News Ltd newspapers last Sunday. It’s the only newspaper giveaway in the last year I can recall where we had half allocated giveaway stock left at the end of the day. (My ealrier entry incorrectly noted Fairfax newspapers as the related product.)

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Newspapers

Star Enquirer sales increasing

Sales for the recently launched Star Enquirer have finally started to improve. I’d say this is in part due to better publisher support with merchandising material. While the product is lacking in terms of feel compared to its competitors, merchandising material (any at all) is a help.

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magazines

Zoo and Famous: magazine launches begin for 2006

ZOO Weekly(aimed at men 18-34)) launches with a free sample issue on February and Famous (aimed at women 18-34) launches on February 20. With Monday as the on sale day for both these new weeklies, getting display attention will be a challenge with New Idea, Woman’s Day, TV Week and NW already claiming prominent real-estate on the same day. Given that weekly magazines achieve, on average in newsagencies, above 50% of sales on the first day of their on sale period the real-estate challenge will b felt somewhere – either with less space to promote existing titles or insufficient space to support the new titles.

A weekly magazine requires a full tier of space to create a reasonable retail presence. This means nine pockets and a flat stack area. Finding this for two new titles will be a challenge for many newsagents. It will be easier in the women’s weeklies area than in the men’s section.

An additional challenge for ZOO will be the shopping habits of the male purchaser. Male magazines are in the high browse/low conversion area of the store. Whereas women’s weeklies are high traffic and quick purchase, men’s magazines are where blokes come to pass time. Getting blokes to enter their space with a difference mindset will be a challenge. That ZOO is entering the space with a free copy is a bold move and follows what worked for Alpha. I’m not keen on the giveaway model but if it works, hey, why go with it?

Having new titles supported by stong advertising campaigns is great. The challenge is with two so close to each other and both going on sale on a Monday.

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Are magazines failing in petrol and convenience?

It is a year and a half since ACP Magazines went direct into key petrol and convenience outlets so I thought it was time to see how the move was traveling. I have visited six key petrol outlets in suburban Melbourne this week. I know four locations well and in particular how the local newsagent used to range magazines and newspapers.

Today, a year and a half on, in each case, 20% of magazine pockets were empty, category segments were not being respected (car magazines mixed with women’s magazines); and, newspapers were either out of stock or messy.

Whereas newsagents used to visit these stores at least once and often twice a day to re-stock and merchandise, now the outlets are left to do this for themselves and from the five stores I have just visited it’s clear they are failing. In each of these same five stores, their confectionery displays were excellent – well stocked, tidy and better located in relation to traffic flow. I wonder if this has something to do with margin.

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Newsagency challenges

Legal battle for Craigslist (and others) in the online classified space

Interesting legal action has been commenced against online classified business Craigslist by a Chicago fair housing group. Get the Chicago Tribune take on the story here. Craigslist is not alone in publishing ads unvetted. Here in Australia there are many classified sites where this happens including at least one site run by a newspaper.

This story interests me for two reasons: how the newspapers run with the story and how regulators react. The story suits newspapers because it taints Craigslist and similar online classified businesses. This helps their main competitor – newspapers. Some newspapers have recently run hard with beat up stories demonising Craigslist and postings to the site. The internet is an open and rampantly viral place. People approach the space differently to the more regulated space of newspaper pages. One would hope that this is the view the courts will have otherwise consumer will have expensive gatekeepers (publishers) to pay for access which, today thanks to Craigslist, costs less.

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Media disruption

Newspaper’s Simpsons promotional pins for sale on eBay – breaching embargo

Sellers at eBay have listed Simpsons pins at the centre of a major promotional campaign for the Melbourne Herald Sun newspaper. In a major embarrassment to the publisher, pins are listed, including photographs, which have not been released for sale to Herald Sun readers yet.

Over the counter at a newsagency the pins sell for $2.00. At eBay they are listed at $4.00 plus postage. The seller lists that they have two of each of the sixteen characters plus another eBay item of the full set of sixteen. It’s odd that they have been able to list this when stocks are embargoed by the publisher.

Given that each pin costs $2.00 and the required newspaper purchase another $1.00, the sell price of $4.00 does not make sense.

With kids across Melbourne angry that they cannot get the pins they want because their newsagent has sold out, I would expect comment from Herald Sun publisher, the Herald and Weekly Times, to comment on how their promotional products can be on eBay already and what they intend to do about it.

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Newsagency challenges

Amazon creates new “billbords”

I guess it was only a matter of time. ClickzNetwork is reporting: Amazon Testing Contextual Ad Program with Affiliates. Amazon and its affiliate network has the traffic to make this work. It’s another disruption for mainstream media. In the bricks and mortar world department stores didn’t give over their own in store real estate to advertise other businesses.

What interests me in this is that an affiliate makes some money off each click, they share in the Amazon revenue. Newsagents in Australia don’t have such a relationship with publishers. While advertising rates rise annually (and the cover price remains the same for years) their share of revenue remains flat.

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Media disruption