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

Where paper boys came from

The familiar neighborhood paper boy was a product of the Depression, born of the need to boost revenues and improve readership. Operating funds for newspapers swiftly declined in the wake of the 1929 stock market crash. Circulation managers responded with one of the few resources at their command – inexpensive juvenile labor. Drawing on connections linking men and boys in the marketplace, circulation heads fashioned a gendered managerial philosophy that was distinctive to their industry. This approach, here termed masculine guidance, revitalized daily news delivery and transformed the relationship between middle-class childhood and paid work in the United States.

From Enterprise and Society 1:355-390 (2000).  Published by Oxford Journals -Oxford University Press.

I found this while researching newspaper distribution history today and thought some visitors here may find it interesting.

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Newspapers

EDI standards unify newsagents

Unity is an overused word in the newsagency channel.  Right now, however, unity is on show for newsagents in a practical and commercial way.

For the first time in years, all magazine distributors, key publishers, software companies and newsagents are all working to a common goal around new XchangeIT EDI standards.  This unity of purpose has been driven by the distributor’s desire to cut costs out of their back end.

The new technology and processes software companies and magazine distributors will implement will cut costs for newsagents.  This is why many newsagents are getting behind the project.

Down the track, once the new XchangeIT EDI platform is fully rolled out, I will see significant innovation.  Software companies and magazine distributors will have the ability to better demonstrate valuable points of difference.  Newsagents will benefit from the renewed competition which will flow from this.  Core standards will drive unity but also intensify competition.

As the new XchangeIT standards further evolve, I am certain that we will see more opportunities for a common approach by newsagents and stakeholders – more unity of purpose. Thinking about this today made me reflect on the importance of commercial unity compared to the political unity which continues to elude the channel.

While some will say that newsagents should have owned the EDI standards and platform, it is too late for that.  The opportunity of newsagent ownership of the data channel into the newsagent network was botched by newsagent leaders earlier this decade.  What we have today is better than what was planned back then.

As more newsagents embrace XchangeIT and the new disciplines I am excited by the opportunities ahead.  This is a platform which we can leverage for the benefit of newsagents.  It is also a platform through which leadership can shine.  My only frustration is that it has taken so long to come to fruition.

I have a vested interest because I own Tower Systems.  I have respected that by reducing margin – because of easier sales to newsagents who want the benefits of compliant software – as reflected in our Connections with ACP joint promotion.

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Newsagency opportunities

National Independents’ Week a great initiative

niw.jpgIt is National Independents’ Week this past week in the UK, a week when publishers, suppliers and independent retailers including newsagents jointly promote independent retailers.  The Sun newspaper is promoting offers through coupons in the newspaper.  This is an excellent promotion, one I have blogged about before.

I’d love to see something like this run here in Australia.  I am certain that suppliers and newspaper publishers would get behind it.

I tried something kind of similar with the TV commercial I funded last year and while ACP Magaiznes, Lovatts, the Herald and Weekly Times and some newsagents got behind it, this was not enough to extend the reach.

The UK initiative appears to be more product driven.  That is important for unlocking funding and driving consumer action.

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Newsagency opportunities

Women’s weekly magazines do it tough in NZ

The New Zealand Herald has an interesting story today about challenges facing women’s weekly magazines.  While a good read about factors in the decline of the weekly in New Zealand, the article misses two key points – celebrities controlling more of their story thorugh their own blogs, Twitter feeds and the like and the thousands of celebrity blogs which offer magazine-like celebrity content for free.

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How is business?

Australia post price rise hits publishers

Mediaweek yesterday published a report about the impact of Australia Post price rises on magazine publishers and subscriptions fulfilled through Australia Post.

Publishers have been reacting angrily to notification from Australia Post this week about price increases which will affect the cost of filling subscriptions. One of Australia’s largest subscription fulfillment houses, D&D Mailing Services, has circulated a letter from director David Docherty it sent to Australia Post. One of D&D’s customers has subsequently forwarded it to Mediaweek. It reads in part:

This Increase is 3.9% for Parcels, 3.6% for PrintPost and a further increase to Line haul rates of 3.1% which ultimately increases PrintPost to a weighted average increase of 4.6% in most cases.

I received notice of these increases in my Sydney office from Australia Post dated 1 June 2009. The notice indicates that the increases are effective from Monday 6 July 2009 (1 months notice).

This increase is only 9 months from the last increase. Therefore the increase at this time (3 months earlier) means a further 33% increase to Australia Post profits and an unbudgeted and unplanned impost to customers as it hits one financial quarter earlier than previous years which effectively has an underlying annual increase of a further 1% increase than advised.

This is from the same Australia Post which aggressively targets small business newsagencies with its 865 government owned corporate stores.

The federal government needs to rein in this business it wholly owns.

In the meantime, newsagents ought to work closely with publishers on selling a new type of subscription – a customer pick up.  Lock in the traffic and have an opportunity to sell a year of copies and get the money, albeit a smaller amount, up front.  I know there are some challenges in this proposal, at least we ought to be at the table discussing them.  The Australia Post price rise presents an opportunity to do this.

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Australia Post

Two years for water damage pay out

Two years after we were flooded out as a result of construction being undertaken above our shop we received this week a cheque from the insurance company for the builder for the $10,000 in stock which was water damaged and removed by them at the time.  I hope newsagents affected by the floods in Queensland don;t have to wait two years.

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Ugh!

Proudly displaying the local community connection

customer_thanks.JPGNow more than ever, displaying the community connection is important – because people are more likely to shop locally to save costs and because people appreciate support for local groups at a time when raising funds is difficult.  Like other newsagents, we are regularly thanked for donations.

One of the best I have seen the letter and photo from Mt Pleasant Road Primary School in Nunawading.  The photo with the letter is an engaging way to say thank you, one we will proudly show in-store.  They invited us to an open day to see the difference donations like ours made – this invitation is appreciated.

Community involvement must be two-way.  Thank you letters and transparency on the positive impact of support are important for businesses which give to give and not to make the person requesting a donation to go away.

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Social responsibility

Promoting Burke’s Backyard and gardening magazines

fhn_garden_june09.JPGWe are using Burke’s Backyard magazine as a feature of a display of gardening magazines at the front of our newsXpress Forest Hill location this weekend – as a drawcard.  With Don Burke back on TV and the new issue of Burke’s Backyard out we the timing is right for a display around the title.  We are promoting a range of gardening titles as well as Better Homes and Gardens which sells well over the weekend.

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magazines

Making newspapers more valuable on the iPhone

Editor & Publisher has overnight published a report about Apple’s new iPhone operating system which could be good news for newspaper publishers.  Apparently, new technology will enable the publishing of highly location targeted content and advertising, based on where the iPhone is at the time.  E&P interviewed Art Howe, CEO of Verve Wireles:

The new technology has the ability to deliver user-location information at the browser level. For example, when a user accesses a newspaper Web site, the browser knows the user’s location. The newspaper can send relevant content and, more important, relevant targeted advertising within 2 blocks on a person’s location. “This makes local advertising on mobile highly potent with high CPMS,” Howe said.

The other big change is in how iPhone content is purchased:

Second: There is a new capability for publishers to charge for subscriptions or micropayments through one application. For example, a user could be reading about the new quarterback in town and with one click can purchase premium content like an exclusive video interview the quarterback.

Those who watched the Rupert Murdoch interview last week will recall the focus on monetisation.  Making micropayments easy on the iPhone and other devices will encourage publishers to engage more with these devices as their distribution channel.  While this will be a major shift for publishers, who have always controlled the channel and all cost points, it represents an opportunity to monetise content for which they receive little or no revenue today.

What Apple will announce next week in this area will be further evidence that newsagents should not spend another cent on a purpose built newspaper or magazine fixture. Flexibility is the name of the game in retail newsagency design.

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Media disruption

ANF set to miss opportunity to lead

I am told that the ANF has advised South Australian newsagents that the meeting planned for June 11 to discuss moves by the Adelaide Advertiser to take control over home delivery payments will be for ANF members only.  I’d encourage the ANF to invite all newsagents to the meeting.  The more attending the better.

The ANF cannot claim to represent all newsagents if it is selective as it appears to be.

The alternative is that newsagents organise their own meeting.  We did this in Victoria last year on Bill Express and showed VANA and the ANF how dissatisfied newsagents were with their lack of leadership on that issue.

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Newsagent representation

Selling newspapers with lottery products

fhn_papers_lottery.JPGWe have made some changes at our busiest lottery country to try and lift newspaper sales.  The Herald Sun impulse stand has been moved to the left, to a location where it will be seen by more people lining up to purchase.  We usually have a magazine offer in this location – most recently Top Gear Australia.

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Newspapers

Did controversy hurt The Monthly?

monthly_may09.JPGOur sales for The Monthly were down more than 50% in May.  We didn’t treat the title any differently or hide it in any way.  I wonder if the sales fall had to do with controversy surrounding the sacking of the editor.  Sales this month will provide some guidance.

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magazines

Offering the ANF a right of reply

I have been contacted by several people saying that I am treating the ANF unfairly in relation to the moves by News Ltd in South Australia to cut revenue from newsagencies.  Their message, curiously, has been the same – leave the ANF alone and let them resolve this.

My limited commentary about the ANF on this issue so far has been based on what the ANF has done and not done on this issue.  I have seen their correspondence with South Australian newsagents.  More words were spent talking up the News Ltd changes.  They clearly had not thought through the implications of the changes until I blogged about them here on Tuesday morning.  After reading that post, the ANF changed focus – probably realising that their original approach to the issue was flawed.

The best way for the ANF to stop me giving attention to poor leadership would be for them to stop delivering this.  The issue in South Australia was (and may still be) an excellent opportunity for the “new” ANF to demonstrate an understanding of the complete newsagency business, provide fearless national leadership and deliver on the will of its members.  Instead, it appears, for the moment, to have been blinded by bright lights pointed at it by a supplier.

Facing off with suppliers is a huge challenge for our newsagency industry associations.  No, more than ever, newsagents need to know that their associations will put newsagents ahead of suppliers and the revenue they offer for conferences, awards and other association costs.

I do not have a political agenda here.  While through my software company I directly serve in excess of 1,600 newsagents – 136 in South Australia, I care about all newsagents and have done so for 28 years.

The ANF is welcome to a right of reply to reach the 1,500 unique visitors who visit here each day – don;’t fear debate for its is from robust debate that leadership is tested and strengthened.

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Newsagency challenges

Bringing food into weekly magazines

fhn_food_magazine_section.JPGWe have introduced a column of food titles into our weekly magazine display for the next few weeks to increase sales of these titles.  The new column is next to our TV related titles.  While creating the space has been a challenge, we expect it to be worth it.

My feeling is that in our store many food magazine purchases are on impulse.  The change has been in place since Wednesday and already we are a lift.

We first played with our weeklies by introducing a column of crossword titles more than a year ago.  This has been a tremendous success and remains in place today.  We do not see the food column as staying for anything more than a few weeks – we do not ant to reduce browsing of the rest of the magazine department.  We are, however, likely to use this created space to feature other categories on rotation – but we will only do this with categories which work with the weekly magazine shopper.

In this marketplace we need to take every step possible to extend the basket.

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magazines

Cows in the window

cow.jpgWe had a good selection of these cows on display near our counter, expecting them to sell quickly – they are a cute and inexpensive novelty gift (with a good margin).  We sold one.  Within two days of moving them to our window we had sold all stock except for one.  As we have found in our gift shops, moving gift stock regularly is crucial to finding sales.  What is lost in one location can work a treat in another.  We have a floor stock rotation program which is helping drive good results from our entry into gifts in our newsagencies.

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Gifts

Recycling magazines

I was talking with a newsagent last night who received a porn pack to sell, seveal magazines bagged together.  Inside the pack was a title which would be, I am told, at least ten years old.  You have to wonder how many times some magazines will go around because they are eventually pulped.

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magazine distribution

News Ltd move could cut newsagent revenue by 10%

Many distribution newsagents in South Australia have benefited from a long-standing 2.5% 2% settlement discount arrangement with News Ltd’s Advertiser Newspapers.  With Advertiser taking home delivery account collection, newsagents stand to could lose access to this 2.5% 2% if the newsagent is no longer required to pay for the newspapers and are just paid for the distribution service.  This translates into a margin cut of around close to 10% if my assumption is right.

UPDATE: (9:30pm) I updated the above paragraph following feedback from the Advertiser.  I note that I have been told that the settlement discount remains.  I am awaiting clarification on whether it will apply to the value of the newspapers deliivered and the account collection for which the Advertiser plans to take over.  This is important as it represents real margin to the distribution newsagents.

Newsagencies are slim margin small family businesses.  They cannot afford a 10% cut in margin – not in today’s marketplace, not ever.

Meanwhile, the ANF, the only body representing newsagents in South Australia, appears more concerned with control than the issues if the email sent out to newsagents this morning is anything to go by.  It included…

Can I remind ALL N.A’s that ANY correspondence should be handled by the ANF CEO or media representative in every instance and ANY information given to the media without the ANF approval could harm potential negotiations between the ANF and its suppliers and partners now and in the future.

In another email they indicate that there are issues in the changes for country newsagents.  I have received calls from suburban newsagents most concerned about the impact on their businesses.

The reaction from the ANF has been poor.  It reflects an ignorance of the issues and a lack of commitment to genuinely serve the newsagent constituency.

The ANF must get this right.  Now, today and tomorrow and not in a week or two.  This issue is affecting newsagents and their families right now and I am not seeing anything in the ANF communication which demonstrates empathy or leadership.

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Newsagency challenges

South Australian newsagents concerned about losing customers

I have received more calls from South Australian newsagents concerned about the risk to retail traffic as a result of the decision by News Ltd owned Advertiser Newspapers to take over control and management of home deliveries.  More than half heard about the move for the first time through this blog.  As I outlined in my blog post yesterday, retail newsagencies are finely tuned businesses – we rely on traffic for a broad range of purposes – each supporting and feeding off the other.  Take part of that away and the balance is impacted.

Take a country town newsagency which processes newspaper home delivery payments from around 150 customers each week and with 90% of these for Adelaide Advertiser only accounts.  many of these are customers won by the newsagent.  The Advertise plans to take these accounts from the newsagent and thereby provide one reason for these customers to not visit the newsagency. The knock-on impact on other sales and therefore the goodwill value of the business could be significant.

This planned change needs to be put on hold while all newsagents are brought into the discussion and while appropriate authorities are consulted.  I would hope that the ACCC might have a view on this as well as the Minister for Small Business in the South Australian Government.

Newsagents could consider getting together themselves to establish a committee to take the matter further.  There is nothing stopping them working collectively on a uniform approach – in the absence of leadership elsewhere on this issue.

I hope that News Ltd nationally prevails on their South Australian outpost to delay implementation while fair and open consultation proceeds.

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Newsagency challenges

Relaunching Good Health

fhn_good_health.JPGWe have given the relaunched Good Health an excellent location in our newsagency – at the entrance to our busiest magazine aisle – not too far from the usual home for this title.  While not the prettiest retail display, it is functional and easily shopped.  It focuses on the re-launch of the title and the low price point – function over form.

Famous benefited from its re-launch and lower price point earier this year, hopefully these moves work well for Good Health and bring new customers to the title.

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magazines

Google Wave to evolve story telling?

Google last month previewed a new product, Google Wave.  Developed by Google in Sydney – yes, here in Australia … this should be a huge story locally – Google Wave is a product which has the potential to change the way we communicate and collaborate online.  It is the collaboration facilities which make Wave interesting from a newspaper and magazine story perspective.  While much of the concern I express here about the future of newspapers and magazines relates to the transition of these aggregating products to digital platforms, the longer term discussion needs to be around how we engage with stories.  This discussion goes to the heart of relevance of books, magazines and newspapers.  Google Wave is one of several technologies which may provide a pointer to evolution considerably beyond the fears and opportunities of what we see on the horizon.  Jeff Jarvis sees Google Wave facilitating collaboration on stories.  Here is the first public presentation of Google Wave at a conference in the US earlier this week:

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Media disruption

Are newsagencies opening later?

Three newsagencies I visited between 6:10am and 6:20am earlier this week were closed.  I had to get the newspaper I wanted from a 7-Eleven. I’d be curious to know if newsagencies are opening later than they used to.  In my own businesses we are in centres and no longer have runs so we open Tuesdays and Thursdays at 8am and Monday, Wednesday and friday at 7am.

To those wondering, I was half an hour from my own newsagencies and was not planning on visiting them on this particular day.

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Newsagency opportunities
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