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

Author: Mark Fletcher

We’re all content providors

Google has quietly released access to the Beta version of its video upload facility. You can check it out here. Anyone can upload. You retain copyright. You can charge what you like.

This move releases even more content to find places of interest. It reduces the barriers between content creators and consumers.

I can see the day when, through a service like this and other aggregators who will enter the space, consumers can download a story for a few cents which otherwise they would need to watch a TV show to view. Our portable devices and computers become a key and low cost access point for video based news and information.


Our place in a one size fits all world

Australian newsagencies grew up with the purpose of distributing and retailing news and information product. We established a world class network along the way and while we added other products and services, our connect with news and information remains our most important traffic generator and business focus. Through this journey we have been (for the most part) willing servants of newspaper and magazine publishers and distributors, another cog in the supply chain.

Now, thanks to broadband, the Internet and wireless technologies, the need for such a cost and labour intensive supply chain is changing. Yet we’re not about to close down. We need to find and create opportunities for our commercial relevance going forward.

Our future will be found in being locally focussed. Our local connect is a core value of newsagencies. We need to embrace that more. We need to stop watching this giant wave of change from the sidelines and jump on and ride it. We need to create content, product.

Imagine if you were the publisher of an online local newspaper which focussed on local reporting. No one size fits all here, such a venture would be about your local community with content developed by them and even supplemented by professional local writers. In such a model newsagents step out from being part of a challenged supply chain and become content creators, we start riding the wave. This model would make local news more valuable than the fluff of many local newspapers.

While taking such a step will not generate significant traffic for our shops, it will put us in play in this new online space in an exciting and leadership way. Our shops can become a beacon for the local community and help create a future model for our viability.

It’s easier to see the way forward from the front of the pack than from behind or under.

How do we do this? Watch this space.


Australia Post transparency order

Some competitors of Australia Post, particularly newsagents, have alleged that Australia Post is unfairly competing in the market by using revenue from its reserved services to cross-subsidise its non-reserved services.

And so opens a nine page report released by the ACCC on March 30 this year. This report makes for fascinating reading for anyone concerned about possible unfair competition between Australia Post, particularly their corporate stores, and newsagents.

The ACCC has established record keeping rules for Australia Post which will facilitate greater transparency of the financial operation of Australia Post and, in particular, the flow of revenue from reserved services. This will make checking for cross-subsidisation easier.

Australia Post poses a huge threat to the newsagent retail channel. We ought to be calling on the government to stop its monopoly based government owned retail channel from further encroaching on our independently owned small business channel.

This transparency order from the ACCC is welcome.


Readers and writers

This local newspaper from Greensboro, North Carolina is encouraging readers to write stories and submit them to editors for publishing online. This is a model of community involvement designed to build the connect between publisher and readership and demonstrates how some are already embracing some of the principles Rupert Murdoch espoused in his speech two days ago in the U.S. The Wall Street Journal online carries more details on this story.


The sleeping giant (iii)

Here is the full text of Rupert Murdoch’s speech to the American Society of News Editors. Below are some further quotes from the speech:

At the same time, we may want to experiment with the concept of using bloggers to supplement our daily coverage of news on the net.

And with the growing proliferation of broadband, the emphasis online is shifting from text only to text with video.

While the technology still develops in this area, we today face the more immediate challenge of transforming our offline classified businesses into online marketplaces. And not just for the traditional cars, jobs and real estate categories. What we’re learning is digital natives increasingly are finding their dates, their plumbers and their restaurants online.

Read the whole speech – it’s fascinating.


The sleeping giant (ii)

“The threat of losing print advertising dollars to online media is very real,”

That’s Rupert Murdoch speaking in another quote from his speech to the American Society of Newspaper Editors.

“They don’t want to rely on a God-like figure from above to tell them what’s important,” he said. Not making these changes would mean the newspaper industry would “be relegated to the status of also-rans.”

This more fulsome reporting of the public reality check for News Corp. can be found in this report from MSNBC.

Then there is this amazing quote in this story on the Editor and Publisher website:

“I fear technology, and our response to it, is by no means our only challenge. What I worry about much more is our ability to make the cultural changes. We are too out of touch with our readers. We worry too much about whether we have the story than whether anyone wants the story.”

The commentary on this story will be worth reading in the coming days. Again, newsagents need to develop their own commentary.


The sleeping giant stirs – News Corp to embrace the Internet

Rupert Murdoch, Chief Executive of News Corp., speaking at the annual meeting of the American Society of Newspaper Editors, urged newspaper editors to embrace the Internet.

“The trends are against us. Unless we awaken to these changes which are quite different than those five or six years ago, we will, as an industry, be relegated to the status of also-rans.” Rupert Murdoch.

Murdoch cited this report from the respected Carnegie foundation which we discussed in a blog entry on April 4.

Newspapers across the globe are reporting the stirring of News Corp. with most taking the Associated Press feed as this report in the LA Times shows.

The core of the News Corp. strategy must be the elimination of barriers between their business and consumers, the elimination (or dramatic reorganisation) of the supply chain, the growth of the online model while protecting revenues as much as possible from physical product as much as possible.

Newsagents need to read the Carnegie report and plan for the future just as News Corp. is doing today.


The radio challenge

While we focus here in the impact of changes on the distribution of news and information in print media, it’s valuable to check in with the impact of technology on radio. This article from newcitychicago.com is an excellent discussion on the impact on radio and unemotionally outlines potential ramifications for commercial radio as we know it. The parallels for newsagents are clear.


Why would you?

Why would you advertise a job in a newspaper? Online you can publish immediately and now with aggregators like indeed.com you’re getting seen way beyond the posted website.

Take a look at indeed.com and see how easily and quickly it aggregates data from over 500 job sites.

Job advertisements have been a key part of the rivers of gold classifieds of newspapers. No longer.


Today Tonight: don’t let the facts get in the way of a story

It was disappointing to see Today Tonight on the 7 TV network last night rip into newsagents among others on retail markups. This story on their website says:

Newspapers are marked up 25 per cent, stationary up to 100 per cent, cigarettes up 25 per cent and confectionary as much as 50 per cent.

Newspapers are marked up 33% by the publishers. Our on sale price is dictated by our suppliers. Every retailer charges this cover price. In fact, most of what newsagents sell is at prices set or recommended by suppliers. Stationery is the biggest category where we set our own markup. Here the range is from 5% through to 120% with the industry average 60%.

There is no shame in markups. Shame on Today Tonight for inferring there ought to be. The markup (gross profit) pays rent (around 12% of retail), wages (around 10% of retail), theft (around 3% of retail) and overheads (around 6% of retail).

A journalist doing their job would have reported that many items sold in newsagencies are done so with prices set by suppliers and that in many cases prices have not changed in years.

I sell the Herald Sun newspaper today for $1.00. I sold it 5 years ago for $1.00. In the 5 years my rent has increased 4% each year – I am paying $1,000 a week more rent now than 5 years ago – wages have increased by 35%, insurance by 30% and so on. A good journalist would have investigated the situation and not just accepted what the Australian Consumers Association fed them.

Newsagents do not have any form of government protection like chemists. We do not have a monopoly. Indeed the last six years have seen our core products of newspapers and magazines pushed to all manner of outlets with the result of less traffic in our shops. Such is the impact of competition.

Our 4,600 independently owned small businesses provide worthwhile local business employment for many, we’re a beacon in the local community, assisting in many ways.

This Today Tonight story is really part of the push by Woolworths to get pharmacies in their supermarkets.



Podcasting is technology which takes audio and sets it free for the world on the Net. It’s revolutionising radio as this quote from Paul Montoya, CEO and a 31 year veteran of the broadcast industry stated,

I was there when FM radio came into its own and saw the impact on AM radio. I have also seen the impact satellite radio has had on FM radio. I can now see the incredible possibilities that Podcasting can have globally on the way people listen to content. Now they can listen to programs they want to listen to, when they want to listen to it.

Read more of the story here. Connections to newsagents and independent retailers? None. Except that Podcasting will morph across into publishing and that’s where the impact may be felt. The BBC is embracing this technology having now undertaken their second podcast.

What we knew as radio last year has changed significantly already this year.


Traffic generators

The folks at Google are not resting on their laurels for traffic. Google Ride Finder is a taxi locator now in Beta in 10 U.S. cities. The site plots locations real time.

Once in the cab, according to this story from the San Francisco Chronicle SFgate site, the passenger can access all manner of news and information using a touch screen.

It’s traffic generators like these which separates online plays like Google from the more traditional news and information sources – and that’s crucial as they are masters at leveraging that traffic for incremental sales.

The connection to newsagents? Less relevance for what we sell and a lesson in customer traffic generation and retention.


Aussie Post stays under the radar

It’s astounding how much Australia Post is able to stay under the radar on matters of customer service. While Telstra gets beaten up with regularity over service for rural Australia, Australia Post continues to let consumers across the country down.

  • Their shops have long lines, a fifteen minute wait is common.
  • Customer service is poor to shocking.
  • Product knowledge is barely average.
  • They close early – 12 noon or 1 pm on a Saturday (if they open at all).
  • Prices do not reflect their buying power.
  • Closed Sunday.
  • If this were Telstra the press and some more noisy Senators would be beating the drum calling for better service. Hey, folks, there’s a story here!

    I don’t mind since I own a newsagency which competes with a Government owned post office (directly opposite) for stationery, greeting card, Western Union, phone recharge and bill payment products and services. But I still wonder how Australia Post gets away with it while Telstra does not. Of course, they do it by promoting their business around their delivery service – which is excellent – but it is in their retail sector where they are savage against family run businesses. They use the rivers of customers generated by their monopoly mail services and get them to buy products which would have otherwise supported the small business economy.

    I guess the Federal Government needs the profits from the sale of a pack of paperclips more than I and other newsagents like me need it.

    The retail arm of Australia Post is out to harm small businesses like mine and make mediocre service the standard. Australians should reject that! We deserve better.

    The government should get out of retailing and leave that to small business owned who know a thing or two about customer service.


    Drowing and starving

    There is no doubt that newsagents face serious challenges. They are a key part of the news, information, advertising and gambling supply chains. In each of these marketplaces, online plays are shortening or eliminating the supply chain. While it will be some time before we feel the full impact of the changes, suppliers in the meantime are chasing incremental sales wherever they can and this means hurting the small business people who gave them life in the first place – newsagents.

    Suppliers are taking products traditionally associated with newsagencies and putting them everywhere – dramatically diluting the value of the newsagent shingle.

    Many newsagencies are starving because they are not sent enough magazines to satisfy consumer demand. This will reduce consumer traffic and potentially cause their businesses to die. Week after week we sell out of TOP 10 magazines barely 50% into their shelf life. That’s bad for business.

    Many newsagencies are drowning because the lesser successful magazine titles are supplied in such abundance that more than 50% of what is sent is returned to be pulped. Newsagents cannot control what they are sent yet they have to pay for this stock and then claim back a credit which they get sometime long since the money left their account.

    This small business retail channel is in trouble.

    Is anyone listening?


    We, the publishers

    Australia’s 4,600 retail and distribution newsagents need to create a business model which links them directly with consumers in the news and information area. As middlemen in the supply chain today we run the risk of being discarded when our economic relevance drops below a point of viability. Publishers have always ‘owned’ the relationship with their readers.

    Newsagents can establish a direct consumer relationship by embracing blogging and citizen journalism technology and becoming a bricks and mortar conduit for local (community) news. While operating online, the resultant stories could be ‘published’ in short form and provided to the local community free from retail newsagencies.

    This would underscore the role of newsagencies as local gathering places which makes sense since they are locally owned businesses employing local people and service the local community.


    You, the journalist

    Further to my April 4 post about Bluffton Today, there are two other new and similar citizen journalism sites worth looking at.

    YourHub.com is a Rocky Mountain News venture where anyone is invited to share stories/photos and opinions, add events, sell something. It is about to launch and is planned for 37 neighborhoods in the Denver area.

    Blount County Voice is a community site in Maryville, Tennessee.

    These sites and the others like them demonstrate a movement toward the local and acknowledge the place of the reader in creating content. While in its infancy and yet to evolve into what accountants might consider an economically sustainable model, consumer and participant interest suggests that they are heading in the right direction.

    Local newspapers face the more immediate risk from the citizen journalism movement. Rich in advertising, these papers are lucky to carry one or two genuinely local stories. Consumers creating content will provide more interesting and more immediate local content and see more local papers thrown in the bin.

    With Australia’s 4,600 retail and distribution newsagents reliant on newspaper and magazine sales for more than 50% of customer visits each day, we need to urgently find a way to meaningfully participate in citizen journalism. Publishers embracing the model will do so outside our bricks and mortar channel. Our response has be between us and consumers.


    Tattersalls online

    Tattersalls has quietly launched online sales and there are unconfirmed reports that sales are well above expectations.

    Tattersalls have partnered with the Telstra owned Sensis to place advertisements for Tattersalls online sales on the online White Pages.

    This move by Tattersalls is another example of a manufacturer getting closer to the consumer (thanks to new technology) – shortening the supply chain and thereby ignoring the independent retailers (newsagents) who have been crucial to the growth of the brand through its formative years. Newsagents do not currently receive tail revenue for their customers switching to online purchase.

    Tattersalls is the first of the state controlled lotteries franchises to offer online purchase.


    New .jobs and .travel top level domains

    ICANN, the not for profit peak internet management body yesterday at a meeting in California approved the creation of .jobs and .travel sponsored top level domain names as this item reports.

    The .jobs decision reduces the supply chain between job advertiser and job seekers. Aggregators such as SEEK now face their own challenges. In recent years it has been SEEK and others challenging newspapers.

    This ICANN decision is further proof that the supply chain is shrinking in many sectors and bricks and mortar and older technology aggregators need to adapt to maintain relevance.

    It will be interesting to see the impact of this decision on the forthcoming SEEK float.


    Newsreaders tomorrow’s newsagents?

    The good news is that publishers and software developers are teaming up to deliver timely articles of your choosing to your virtual doorstep — and you don’t even have to tip the delivery boy.

    And so opens this article from Wired News posted two days ago.

    Newsreaders pull headlines from a variety of bloggers and news sources and allow consumers to create their own ‘paper’. Newsreaders are available without cost and they access websites such as BBC, CNN, News Limited and ESPN which provide content without cost. Once you select an article of interest you are taken to the site for the story.

    Newsreader software is available for hand held devices making up to date news accessible on the road.

    The road between story conception and the consumer is changing.


    In our little world

    We have seen the changes in news and information distribution for some time and set in place a plan a year ago to grow the business and brand. Our goal has been double digit growth in the magazine and newspaper categories and to leverage that traffic into other areas as we expand our range.

    The strategy is working. Magazine sales are up year on year by 30% and newspaper sales are up 12%. In the Women’s Weeklies segment of magazines our sales are up 50% year on year. We’re seeing positive impact elsewhere in the business.

    While not addressing the longer term issues, our strategies are building consumer loyalty. Holding their hand we’ll lead them through our evolution.


    Bricks and mortar aggregators

    Australian newsagencies are bricks and mortar aggregators. Consumers visiting a newsagency have access to between 1,500 and 2,000 magazine titles and between 20 and 50 newspapers in English and an array of foreign languages.

    Historically we have been a one stop shop for news and information. The perfect model for the day – a model which has resulted in significantly better than average per capita consumption of news and information product. The model was created by the publishers and until 1999 protected by government.

    The model in its present form is out of date.

    Now that we have been cut loose we’re facing tougher competition. Those who created and fostered the development of the newsagent channel are busy placing their product in other channels where they feel consumers are more likel to make an impulse purchase. This is happening at the same time as new online models are emerging to challenge print.

    Newsagencies are typical middle-men in the supply chain and are the most at risk of not adapting to change. Many are too busy in their businesses to consider the strategic issues.

    Given the involvement of the Australian Government in, first protecting the newsagent channel decades ago and, now, cutting them loose, it would be appropriate for them to provide assistance so that the 50,000+ employees in newsagencies and the mum and dad investors who own the businesses have a future.


    Content is king

    Content is king. Long live content. Consumers and content providers are the new best friends and finding ways to each other which eliminate many traditional businesses. In fact, they are racing toward each other faster than we can measure. Whole channels are at risk in the music, video and news/information distribution and retail categories.

    Eliminating bricks and mortar channels replaces our out of date product search, service and payment mechanisms with a model which today’s 18-34 year old consumers want.

    While my last posting here talked about a way newsagents could participate, it’s stop gap because of the desire for content to be as close as possible to the consumer where and when the consumer wants. In such a world newsagencies, CD stores, video libraries and the like are of little relevance.

    Newsagents can be relevenant in the future if they start changing today.


    On becoming a gateway

    Welcome to a new retail model for newsagents for the new age. At this store you can:

  • Recharge your mobile (cell) phone, electronic purse and any other portable device you have.
  • Download content at ultra high speed (music, video, books, podcasts, and casts we’re yet to see emerge) to the devices of your choice.
  • Upload content from a range of devices.
  • Shop online.
  • Pay accounts online.
  • Advertise online.
  • Upload ads of interest to any device.
  • Upload pre set lottery and other service purchases.
  • You can do this 24/7 (even when we are closed) if you have an account with us and are wireless enabled.

    This new retail model is all about providing the gateway regardless of the medium. It’s not long term though as a bricks and mortar presence will not be part of the model for the content providors.

    Until now newsagents have been medium specific – print. This new model says the future is about access, the gateway, and that the medium is less relevant. With music tracks available for 99 cents the next step will be lifetime limited downloads which will make items available with a limited life. This will push transactional volume up.

    Through the Bill Express network 2,600 newsagents already have the beginnings of such a network. The challenge is for newsagents, Bill Express and content providers to appropriately, viably and quickly leverage the opportunity for us in the space.

    While much of what is proposed could be done from home, a national network of stores providing such access can help fuel the mobile paradigm shift.

    Bill Express

    Sony and Intel join forces

    Intel Backs Bertelsmann (Sony) File-Sharing Venture
    The world’s largest chipmaker, Intel, and German media conglomerate Bertelsmann plan to cooperate in developing technology for downloading and sharing films, music clips and games from the Internet.

    This announcement from two giants in content and processor technology has gone largely unnoticed in Australia.

    This is a convergence play of enormous proportions. It will bring bigger files to all manner of devices faster and in a higher quality form. It changes the playing field and could impact newsagents.

    The impact for Australian newsagents is in this question – what happens when consumers can download the stories they’d read in Time or Womans Day or New Idea or Who onto their iPod for listening later or a portable video device for viewing later for just a few cents? What purpose magazines in that world? I appreciate it’s a way off but it’s something to consider.