Author: Mark Fletcher

I was fortunate to attend the Deakin Lecture last night in Melbourne (Australia) featuring Lance Knobel and Jay Rosen. Lance has posted his excellent lecture on his blog, Davos Newbies. Jay posted the more formal part of his equally excellent presentation at his PressThink site a few days ago.

Anyone involved in the news and information business from publishing through to retail needs to read and consider the contributions of these two eminent thinkers. They coverd issues which demand understanding and warrant discussion. Countless Australian small businesses face the risk on missing the opportunity to participate in the changes to the way we create and access news.

We have been working away on our new citizen journalism project, LocalNews Daily. We’re still playing with the technology to make it as easy as possible for people to publish their material. This is crucial as we do not want complexity of use to be a barrier to people accessing their voice here.

In the meantime we have commenced a campaign to let folks in our area know about LocalNews Daily. Here’s some of what we are doing to find readers and writers:

Dan Gillmor is author of We the Media: Grassroots Journalism By the People, For the People. It’s an excellent book about the way technology, mainstream media cost cutting and journalism are intersecting and transforming mainstream media.

Webpronews.com has published an excellent article with Gillmor by Jeremy Pepper. It’s a must read for anyone serious about participating in citizen journalism.

The writings of Gillmor helped start us working on our own (small) LocalNews Daily project.

“The imminent destruction of a massive number of small and specialist magazines emerged as the hot button issue at Magazines 2005, the Periodical Publishers’ Association conference at London’s Grosvenor House Hotel last week.”

UK’s Mediaweek previews a decision expected in the next week by the UK Office of Fair Trading.

While we’re not facing decisions by regulators in Australia, operationally the system which has supported the distribution of newspapers and magazines is under more pressure than ever before for a range of reasons (retailers demanding more from the category; publishers competing with other publishers more aggressively; new retailers wanting ‘in’ on the category; and, greater financial pressure on newsagents)

The newspaper and magazine distribution system in Australia has operated like a completed jigsaw for more than 100 years. Now, some pieces of the jigsaw are missing and other pieces from a different picture are being forced in their place. Whereas the total category was the measurement point of profitability, now newsagents (the only part of the chain to carry all titles) expect each title to be profitable and this is not possible.

So, while we’re not experiencing regulatory change such as that coming in the UK, we are experiencing equally unsettling and challenging operational change.

Newsagents want to own magazines as a category in consumer’s minds. They want to achieve this in an economically sustainable way and through relationships with publishers and distributors who treat the channel and its 4,600 business owners as equals.

Most shopping centre newsagents need a sell through rate of 60% to pay for the space and layout.

High Street newsagents need a sell through rate of 45%.
Rural newsagents need 40%.

These sell through rate goals assume titles with a shelf life of no more than 30 days.

Titles performing at less than these sell through rates aren’t paying their way.

Newsagents do not have the capacity to continue funding underperforming product.

The answer is to either cut supply or pay for the service newsagents provide by making space in their stores available for range.

Anyone in an independently owned small business knows that if you’re under attack, commercially, you fight back with a better product backed by better service. It’s a no brainer.

In the case of newspapers and the challenge they face from new media, one immediate defence would be to aggressively work on their product. They need to make newspapers relevant again. Not as advertising delivery mechanisms but as newspapers. Next, they could work on their existing supply chain and through commercially respectful co-operation reduce and possibly even reverse the trends we’ve seen in recent circulation figures posted by dailies across the globe.

Yes technology will impact on newspaper sales and it’s logical publishers get into the new media pit. However, wise professionally guided investment aimed at improving the content of newspaper news and analysis and delivering this only through the physical product will make it more valuable.

Newspapers could try and stop the tail wagging the dog. The problem is that many newspapers have cut their investment in creating content. Newspapers are not as respected today as some years ago.

The me too strategy being pursued by some publishers will not help them long term.

Last week Dallas News launched a site called Neighbours offering local news similar in focus and appeal to others we have documented here.

Still nothing in this rapidly evolving citizen journalism space by any Australian news outlet.

The new Sony Librie is what is called an e-book reader that makes use of the new e-ink, digital paper or electronic paper (choose the label that suits). The technology seems brilliant. It looks like it could be an iPod for text in terms of functionality. Here is the Sony Librie product page (Japanese, sorry) and here’s a US product page. The screen has a resolution some who have seen it compare it to that of newsprint, thin, flexible, and using little power. This is the first commercial product based on the e-ink technology. Here’s a good blog entry from Jason Kottke who played with the device.

Now fit this device with wireless, plenty of battery power and a couple of extra screen features and we have the portable device magazine and newspaper readers like without the need for a daily trip to the store to purchase new product.

The supply chain just got shorter.

This story published today by the New York Daily News reports on the brilliant mock documentary, Epic 2014 produced by Robin Sloan and Mark Thompson.

This is a catch up story for the New York Daily News since Epic 2014 has been around since late last year and widely reported at online news sites and in countless blogs. While soft in its analysis of the power of Epic, the report at least provides a link so readers can mke their own assessment.

These two pars from the article provide context for the article:

The mockumentary arrives at a time of unusually high anxiety for the news industry. Publishers are nervous – some would say paralyzed with fright – over polls showing that young adults are not reading papers.

Rupert Murdoch, speaking at the recent convention of the American Society of Newspaper Editors, warned that newspapers risked being “relegated to the status of also-rans” if they don’t make use of the Internet.

Viewing Epic 2014 ought to be compulsory for everyone remotely connected with the news and information supply chain.

The Australian Financial Review today publishes a report (p 47) by Neil Shoebridge about a 12 week trial of a centralised magazine distribution system in 12 Victorian Coles supermarkets. The report claims a 20% kick in sales of magazines whereas for the same period other Coles stores reported a 1% kick in sales of magazines.

Coles wants more control over the range and quantity of product it sells. The article documents the challenge of this process for traditional magazine distributors – Network, NDD and Gotch. The greater control, according to the article, is being sought over returns. It says that a more efficient returns system might dust distributor revenue by $4 million.

One anonymous senior magazine industry executive is quoted as saying “Magazine distribution needs to be a push system, not a pull system, because we know the business better than the retailers.” My own experience is that such a claim is nonsense. That my own newsagency and many I know sell out of TOP 50 titles with half the shelf life of an issue to go get we return more than 50% of the BOTTOM 1,000 titles suggests that the push system is failing. It may not be failing for the distributors but it is failing for newsagents and other retailers as the AFR article suggests.

In my shop, year on year, we have achieved growth of between 28% and 35%. In the top selling women’s weeklies segment our sales growth is in excess of 50%. We would have achieved more had we been able to get the product to sell.

So, here is the newsagency channel starving for oxygen when our major competitors, supermarkets, are able to engage in trials of supply chain alternatives which better serve their needs.

I cannot provide a link to the AFR article because of their policy of making online content available only by subscription.

The rapidly shrinking distance between manufacturer (journalist) and consumer is observed often here. Here is an excellent example of technology having the potential to turn book publishing (and possibly book sales) upside down.

The process of finding a publisher has always been a bit of a mystery to authors and some would note that too often good words are left unpublished while less deserving projects get up. A new website, Browse Books, looks set to have a positive impact because it takes some of the mystery out of the process and connects authors more directly with people who will give their works life through physical or electronic publishing.

Authors submit their manuscripts to this Browse, and work with affiliated editors to tidy up their projects. They are submitted to content and service providers to produce the book. Connect this print on demand techno logy and the book supply chain is a fraction of what it is today and the time to get new product to market much shorter.

Newspaper sales are in trouble and the biggest problem seems to be with the 18-34 demographic. Thanks to an excellent blog entry at www.editorsweblog.org I have found this excellent report by Greg Gatlin of the Boston Herald. In a recent visit to a journalism class at an American college he asked them about their own media habits. I’m not surprised to read that these students want news to be free and more accessible.

Publishers have a fine line to walk. They want to connect with the demographic yet it has to be on commercial terms.

People living in Melbourne (Australia) have an excellent opportunity next week to hear two world leaders (Jay Rosen and Lance Knobel , speak on matters often discussed in this place – the media and innovation.

Here’s the description from the Deakin Lectures website:

How responsive is the mainstream media to innovation? If the photocopier made publishers of nearly everyone, what are the effects of the Internet, SMS messaging and other forms of innovative technology having on the media itself?

Anyone involved in the news and information business should attend this lecture. It promises to be the most insightful forward thinking material we will have heard in this country on this topic for a long time.

Entry is free. Get there half an hour beforehand.

You can get a preview of Jay Rosen’s speech at Press Think (an excellent blog by Rosen about journalism) and in particular in the entry – Each Nation its Own Press. Jay Rosen teaches Journalism at New York University, where has been on the faculty since 1986. He lives in New York City.

Australia’s 4,600 newsagents have built their businesses around their vital and contracted role in the news and information supply chain. The rapid changes in how consumers access news and information will impact newsagents yet as independent small business operators the channel is not likely to have a unified strategy to deal with the change. Newsagent suppliers will evolve their business models to suit the best interests of their shareholders. Newsagents must evolve their business models as well. Planning for such evolution will be well served by attending this lecture.

Today (Fri. May 6) The Philadelphia Daily News commences podcasting. Here’s what part of the announcement on their website says:

“Well, starting tomorrow, you can find out. The paper is launching PhillyFeed, a program of news, on-the-street interviews, original music, sports talk – stuff “we could NEVER print in the paper,” say the people behind it. … a bar, at a ballgame, or wherever.”

Here’s a newspaper entering the audio broadcast space. No big surprise there given what’s happened in Denver earlier this week. What is interesting is that they are extending beyond what they would print. This will help extend their brand away from being considered a newspaper brand.

There are some in publishing companies who say these developments will not impact their newspaper business. Others disagree. No one can know for sure. However, greater accessibility and mobile single story accessibility will make the brand more available to the all important 18-34 demographic. As access technology evolves and we can get content on more portable and reader and listener friendly devices without wire connections newspaper sales will be impacted by the changes.

The Magazine Publishers of America website is a goldmine of information about magazines and while it’s designed for publishers, independent magazine retailers will find plenty of good ideas. They have posted a link to this article in the Wilson Quarterly publication which paints a bleak picture about the future of mainstream media. Here’s the opening paragraph which several commentators have found alarming:

“It’s premature to write an obituary, but there’s no question that America’s news media—the newspapers, newsmagazines, and television networks that people once turned to for all their news—are experiencing what psychologists might call a major life passage. They’ve seen their audiences shrink, they’ve had to worry about vigorous new competitors, and they’ve suffered more than a few self-inflicted wounds—scandals of their own making. They know that more and more people have lost confidence in what they do. To many Americans, today’s newspaper is irrelevant, and network news is as compelling as whatever is being offered over on the Home Shopping Network. Maybe less.”

It’s good to see the MPA engaging in dialogue about the changing world by drawing attention to pieces like this now in the Wilson Quarterly. We need to extend the discussion to considering the impact of changes on the supply chain, the long term partners of publishers.

Eight months ago we launched our Magazine Club Card promotion in an effort to boost magazine sales in our retail shop. Very quickly we were experiencing 35% growth. We expected, as if often the case with such promotions, that sales would settle and the increase drop back to around 10%. Not so, today, eight months in, we’re tracking 28% growth in magazine sales in year on year same period comparisons.

In addition to the magazine sales growth we’re also tracking growth in greeting cards, stationery and newspapers – decent chunks of which is attributable to the Magazine Club Card.

The Magazine Club Card promotion is run in or shop without any external or in store promotion except for the offering across the counter of a club card with an 8 week life.

In a channel where magazine sales have grown, on average, 6% in the last year, our sales growth of 28% – 35% each month for the last eight month without any store changes is most significant. We’re aware of winning additional sales as well as stealing sales from other magazine outlets.

The mechanics of the campaign are simple and the rewards quickly accessible to our customers. It is a far more valuable loyalty campaign than any offered by the major retailers of magazines we compete with.

The success has come from simplicity of the offer and total employee engagement.

This is a good small business success story.

Podcasting News says Chicago’s NBC5 claims they are the “first major market TV station in the country to offer daily podcasts”. While they’re still settling in with how they will use the technology, it’s good to see a mainstream TV station join in. Very slick production. The only complaint is the 15MB download. It would be helpful to select by story rather than a whole newscast. But otherwise great!

The innovative Denver Post has just launched daily podcasts as reported in this story. The Post has a team of audio journalists producing the podcasts. Access is free.

Daily podcasts are available for: ALL NEWS; LOCAL NEWS; NATION/WORLD NEWS; BUSINESS NEWS; SPORTS. There will be occasional features. The quality is good as are the production values.

On a broadband connection downloading all news takes less than a minute, load this on to a memory stick or direct to your iPod and you’re mobile with an audio newspaper from a respected news source. This is the kind of innovation Rupert Murdoch was talking about when speaking last month at the ASNE conference. This innovation will facilitate a greater connect with younger readers for the Denver Post.

So what is this? Denver Post is a newspaper. It has a good website. Now it’s in the audio business producing news programs for people on the move. Having the stories updated during the day and on a portable device will make listening to radio news redundant. So, the Denver Post is a newspaper, a website, an audio producer (think news radio station).

More important, the Denver Post move separates the stories from the package, from the newspaper. This is the kind of disaggregation I have been writing about here. It frees the stories. Whereas years ago the Denver Post was a newspaper, today it is a brand operating in several mediums.

Watch for more of this from mainstream media outlets across the globe. This story on Chris Chin’s blog at seattlepi.com (from the Seattle Post-Intelligencier) lists other newspapers offering podcasting. There is a challenge for radio and a challenge to their own newspaper product.

Thinking locally (in Australia) now, this move must be of concern to Australia’s 4,600 independently owned newsagents. We are a key part of the news and information supply chain. In the Denver Post model there is no supply chain to speak of. The publisher has a direct and easy connect with the consumer. If I were a publisher I’d do the same thing. We (newsagents) need to find our own relevance in the changing world. Publishers will put their needs ahead of ours in building future business models. We should not expect them to create models which support our businesses unless doing so is relevant to them.

One strategy crucial to our future is a deeper connect with our local community. This is why we are developing our citizen journalism project LocalNews Daily.

A report at supplychainreview.com.au announces another acquisition by the government owned Australia Post.

How much bigger this 100% government owned enterprise will get and how far into competing with private enterprise it will go.

Interesting article about a 10 week project at the University of Missouri School of Journalism aimed at evaluating a new format for electronic newspapers. The format, dubbed Electronic Media Print (EmPrint) is expected to be commercially available later this year. The result is a PDF file of the newspaper. The product is designed specifically for computer access.

Backfence.com goes live today and already it’s looking good. The site covers the local issues we plan to cover in our LocalNews Daily online community. They go beyond and into advertising, yellow pages and the like – areas not on our radar at present. The site is very clean and easy to use.

Stories on Backfence have been posted by local residents. Many say this is the way of local news in the future. Who wants to read a homogenised local paper stuffed in your letterbox as a conduit for advertising when you can have something like this which is more about the news than anything else?

Here is an interview with the founder, Mark Potts which sheds more light on backfence.

Backfence sets a new benchmark in hyper local citizen journalism.

We start tomorrow engaging with potential contributors by handing out flyers to invite content submission. We’ll do this first across the counter in our newsagency where we see between 10,000 and 12,000 customers a week. We need to walk before we run and thought this very local contributor invitation was a good starting point. While we could have stuffed letterboxes with flyers we figured that sort of defeats one purpose of our mission.

At boston.com is an article by Mark Jurkowitz about the Examiner newspapers being home delivered free to homes in affluent areas in Washington and San Francisco. Here’s a good description by Jurkowitz:

The paper has developed a unique formula. It is a graphically snappy tabloid with a focus on local news and conservative-leaning opinion pages produced by a small staff. It is distributed free to households with incomes of more than $75,000. Examiner executives say the goal is not to knock out their more powerful rivals, The Washington Post, (700,000 daily circulation) and the San Francisco Chronicle (480,000). Rather, the goal is to appeal to readers looking for an easier-reading alternative to the big metro daily and to attract advertisers who can efficiently target dollars to reach high-income consumers.

This is a story US newspaper publishers are watching very closely. Will the Examiner model of bypassing the costs of customer acquisition and careful socio-economic targeting work? Will advertisers support the model long term? Teething problems aside, this story at boston.com and others in recent times suggest that the Examiner model has legs in major cities in the US.

In Australia, 4,600 newsagents play a key role in the home delivery of newspapers. We do so for a share of cover price and a per item delivery fee. An Examiner model here would flip the current home delivery model upside down with immediate economic impact on newsagents.

Being a cog in the supply chain, in any industry, at the moment is challenging.

Thanks to an item at poynter.org, I found this world first: a general classified site allowing advertisers to upload video clips. More than 600 ads have been loaded at Speurders.nl already. We’ve seen it before in specialist sites but not a general site such as this.

While some clips are of doubtful value, others make you wonder why it’s taken so long for general online classifieds to offer this innovation. Maybe that’s because newspapaer publishers control the online advertising space.

Some advertisers have created interesting video productions with good commercial qualities – and that opens a whole new opportunity.

Interesting to read the report today at washingtonpost.com on comments by Berkshire Hathaway Inc. chief executive Warren Buffett made at a three hour news conference following their annual meeting.

“The economics for newspapers are worse now than they used to, and the prospects are worse,” said Buffett, a long-time director and large shareholder of The Washington Post Co.

Buffett said declines in circulation result from readers turning to alternative sources , such as free Web sites and television. And he said owning the dominant news Web site in a region is not enough to guarantee sustained profitability for newspaper firms.

Comments from Buffett cause whole industries to react. He has been lauded as an investment guru and visionary for decades. It will be interesting to see how others report his comments. The Washington Post article does not report answer to what would have been the most obvious question: if newspapers are declining, what’s next? He did discuss his investment in Buffalo where he has investment in a newspaper and a website and said “We’ve got the best position, but it isn’t remotely like owning the paper 30 years ago.”

Dan Milmo from The Guardian reported a few weeks ago:

Emap has created a separate radio division in a shake-up that will see more of its top-selling magazines move from sales racks to multichannel TV, mobile phones and online.

This serves as further evidence that the brand is the thing. Not the product you currently associate with the brand.

Publishers are right to position mastheads in multiple mediums. The challenge is for those businesses (like Australian newsagents) with models rooted in just one medium (print) to ensure relevance in the future.