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NDD lawyers pursue this blog

I received further correspondence from NDD’s lawyers today.  They are say that my blog post yesterday compounds damage against NDD. They also say that NDD did not lose the Best Bets and Winning Post distribution accounts.  My answer to this is that they don’t have the accounts any more so they are ‘lost’ to the business.

They claim that through this blog I demonstrate malice toward NDD.  What I want from NDD is what I want from all magazine distributors – fair and equitable magazine supply arrangements for all newsagents.  I publish more examples of NDD oversupply because I see more from them than other distributors.  If NDD and their lawyers had their way I would not publish examples of repeated gross over supply.

The lawyers have also claim that NDD closed 68 accounts and not the 600 I reported.  I have heard from several sources that it was 600 but since NDD through their lawyers say it was 68 I have to accept that.

Rather than using lawyers to pursue this blog, NDD would be better advised to host meetings of newsagents and seek their views on the matters canvassed here.  They would soon see that examples I document reflect experiences of others.

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magazine distribution

Promoting Delicious and chocolate

delicious_magazine_june.JPGDelicious magazine sells well for us.  The block of chocolate should help sales of the issue out today.  Given display space pressures elsewhere, we have placed some of our Delicious stock in among our weekly magazines.  We have been experimenting with one or two pockets with our weeklies this year and sales from this location are good.  This is why we expect the flat stack and three pocket display to work well for us.

For the benefit of NDD and their lawyers I’d note that our supplies of Delicious are good – certainly not oversupplied.

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magazines

Promoting crosswords with lottery products

crosswords_tattersalls.JPGWe are promoting a range of crossword titles next to our main lottery counter this week.  We are featuring top selling crossword titles from Lovatts, Puzzler, Woman’s Day, That’s Life and Mr Wisdom.

As the photo shows, we have been careful to display most of the cover – this is important since we are chasing sales to people who may not be regular crossword purchasers and the covers are more appealing than mastheads.

We track quantities in each pocket so as to determine sales from this location compared to others.  We also use our software to track sales with lottery products this week compared to past weeks.

Like all good promotions, if it works it is repeated and if it does not work we focus on other opportunities.  Past experience shows that crosswords should see a lift as result of this promotion.

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magazines

We don’t need more copies of Kitchen Trends

kitchen_trends.JPGWe received more stock of Kitchen Trends from NDD today.  This is a reissue of the issue of Kitchen Trends which we still have on the shelves from two months ago.  NDD has our sales data and would know that we still have stock, limited but stock nevertheless, and that the reissue is not needed.  While I am sure that representatives of NDD will have reasons for sending additional stock, I would prefer to have not received additional stock.

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magazine distribution

Racetrack magazine oversupplied

racetrack_magazine.JPGRacetrack magazine does not sell in our shop. We are lucky to sell one copy yet we receive three and four times this.  It is as if NDD does not take into account our sales numbers when allocating stock.  We feature Racetrack around important race occasions without success.  I’d like to cancel the title but have had trouble with that aaction in the past.

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magazine distribution

More Oprah than I can sell

o_oprah_magazine.JPGO, The Oprah Magazine does not sell well in our shop.  Its sell-through is below 50%, often as low as 20%.  The low sell-through rate is not reflecting on supply numbers determined by NDD.  As the current supply numbers stand for O, this is a cash-flow negative title for us – I am funding Oprah in my shop.

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magazine distribution

Promoting favourite winter recipes

winter_warmers_fhn.JPGWe are promoting ACP Magazines’ Winter Favourites cook book at the front of our newsagency, in front of our busiest Tattersalls counter.  We will leave this display in place for seven days, longer is sales are strong and justify the prime space.  I love the ACP cookbook range, the regular flow of new titles, the high quality of the product and the consumer trust in the brand.  I don’t love so much the volume of stock which is sometimes sent.  In my own newsagencies, for some titles, I could be sent 75% less, not lose any sales and not have as much cash-flow pressure.

By shipping the volumes they do, ACP shifts financial burden from their balance sheet to the balance sheets of thousands of newsagents.  They are not the only publisher doing this.  Indeed, many other publishers are worse because of poor sell-through rates.

While publishers have their defence of the magazine distribution practices I describe, I see the financial impact on newsagents and the helplessness they feel when trying to negotiate equitable terms for the supply of magazines.

Years ago, I called for the Productivity Commission to investigate the magazine model as a post deregulation review.  I still think such an independent review is appropriate for all parties – in today’s marketplace more than even in fact.

My concerns are not stopping me promoting ACP’s Winter Favourites.  On the contrary, I hope our display in a high traffic area helps it sell well, and quickly.

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magazine distribution

NDD calls in the lawyers

I received a letter from lawyers representing NDD today claiming that my post on Monday contains false, misleading and deceptive statements.  I have reread the blog post and don’t see how they can reach this conclusion.

I wish NDD were as attentive to calls for more equitable supply arrangements with newsagents as they appear to be in worrying how they look to others because of a blog post here.

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Blogging

Read the contract carefully

Newsagents need to take care before signing documents in the course of running their businesses.  One former newsagent I have been working with for the last few weeks has found a contract come back and bite.  The new owner has advised he will not continue a supplier relationship.  The supplier has gone back to the original newsagent to seek financial compensation for this.  It looks set to take a large proportion of goodwill.

What looked like a good deal two years ago with bucketloads of cash up front is now expensive for the former newsagent.

Despite the sales pitch of some, there is no such thing as free money.  Up front payments by a supplier used to win business are usually clawed back over time in a contract.

If you don’t plan on owning the business for the full term of the agreement then either don’t take the cash or don’t sign with the supplier.  Otherwise you could find yourself in the same position as my friend – facing the prospect of legal action or paying compensation for the decision of the new owner.

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Newsagency challenges

Lessons from Take 5 and That’s Life

Take 5 and That’s Life are heroes of the high volume weekly magazines.  While circulation declines for each in the latest numbers out last week, their respective declines (-1.53% and -1.92% respectively) are a fraction of the declines of the higher profile weeklies.  I see Take 5 and That’s Life as bread and butter magazines for newsagencies.  They deliver loyal mid week traffic off of which smart newsagents build other sales.  We treat them well with co-location, active promotion and other support.  They return the favour with good numbers for us.

My special interest in Take 5 and That’s Life relates to loyalty.  I first noticed this when we introduced Australia’s first magazine loyalty program in my newsagency in 2004.  We still run the program today and Take 5 and That’s Life customers remain the most loyal to us and in the use of our magazine loyalty program.

The circulation numbers reinforce my interest in these titles.  They demonstrate a resilience which ought to be respected in this marketplace.

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magazines

Exclusive offer for Connections with ACP newsagents

newsagent-connections.jpgTower Systems last week launched an exclusive newsagent computer system offer for Connections with ACP newsagents.  The communication sent out last week by Connections was the culmination of considerable work creating a computer software and hardware package deal which supported the goals of newsagents, Connections and ACP.  The package includes Tower newsagency software, new hardware, on site installation and training, support and updates for a year, XchangeIT EDI for a year and 60,000 Connections points.

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newsagent software

Is interest fading in free commuter newspapers?

The latest newspaper citculation figures did not include numbers for mX, the News Limited free newspaper distributed in Melbourne, Sydney and Brisbane.  I would not be surprised in the numbers for mX were flat or down.  In Sydney tonight, I watched the distribution of mX from two transport hub locations I have been to before looking at the process. I know it is only anecdotal – but the interest in the free newspaper did not appear as strong as the previous two times I visited these locations – the week it launched and mid way through last year. If I am right and circulation is flat or down, I’d say it has to do with the increase in use of the iPhone and iPod.

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Newspapers

Benchmark study results confirmed

When I published the latest newsagency sales benchmark study results last month several people contacted me questioning the results, especially for magazines.  They said the benchmark numbers for magazines seemed on the high side.  The details of the latest circulation audit numbers bear out the benchmark study results.

My interest in the newsagency sales benchmark is to provide newsagents with current trend data so that shop fit and other business decisions can be made with a more informed view of business in the channel.

The next phase of the study will look at basket data and compare the contents of newsagency shopping baskets in 2009 with what we saw in 2005.  Such analysis provides tremendous opportunities.

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magazines

Rugby dominates Melbourne

rugby_magazines.JPGWe have more Rugby magazines in our Melbourne newsagencies than AFL magazines. Our main AFL representation is team specific titles, which do not perform well for us, and a weekly newspaper.  I am not sure if this lack of AFL representation is just our newsagencies or statewide.  Maybe it says something about the literacy of rugby followers compared to AFL followers.

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magazines

Free umbrella with Harpers Bazaar

harpers_bazaar_fhn.JPGWe are promoting Harpers Bazaar at the counter this week.  The free umbrella and winter weather in Melbourne make it a good counter offer.  My only complaint is that we were provided one poster with which to promote the title.  We improvised – as the photo shows.  Note the book next to the magazine .  We figured A Guide to Men may be of interest to Harpers Bazaar customers.

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magazines

Collecting the combat tanks

combat_tanks_fhn.JPGWe had a customer on the weekend who purchased around ten copies of issue 1 of Combat Tanks Collection, removed the tanks and left the magazine and backing card for us to dispose of.  While I’m grateful for the business, it’s odd.  I’ve never seen this with a partwork before.

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magazines

NDD loses more magazines

Magazine distributor NDD has lost distribution of Best Bets and Winning Post to Fairfax.  These losses and those announced earlier this year beg questions over the viability of NDD.  Their canceling of around 600 newsagent accounts, withdrawal of Friday deliveries and the talk by some newsagents of the benefits of closing their NDD account give discussion about the future of NDD credence.

While I am sure that the company would say that it is business as usual, to many observers of NDD, myself included, this does not appear to be the case.  With most of the titles they distribute outside the top selling magazines and an average sell through rate of 50%, the cash-flow cost to newsagents of a shrinking underperforming magazine distributor is considerable.

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magazine distribution

Battle for newsagent representation

News Limited last week issued a statement clarifying the status of the ANF and other newsagent associations in terms of the current newspaper distribution contract negotiations:

“Today’s comment in the ANF Newsflash stating “News Ltd has responded to the ANF positively, and for the first time has acknowledged that we are the only body they wish to deal with in these matters” is completely incorrect. News Ltd will be negotiating openly and fairly with all newsagency bodies with regard to the renewal of the News Ltd Territorial & Retail contracts. ” Catherine Woodside, Circulation Director, News Ltd.

The contract negotiations ought to be just that and not used for political point scoring by associations.  It was good of News Limited to issue a clarification.

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Newsagent representation

Is this really a newspaper revolution?

I am told to turn to page 25 of today’s Herald Sun, go to the Herald Sun website on my computer, hold the newspaper in front of my camera and see the newspaper come to life – if you have the right plug-in installed.  While I accept that this extends engagement between the printed product and the website, it is not a newspaper revolution.

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Media disruption

Caught in the newspaper storm

It is difficult to see through flying debris when caught in a severe storm. Adrenaline can take hold and propel the endangered to safety. Others succumb to panic, confusion and fear.Such is the state of the newspaper industry. We are caught in a storm of change. Our business model is in doubt, technology is shifting our delivery system and consolidation by huge public corporations and overleveraged private companies has endangered professional journalism.

Ryan Blethen, editorial columnist and the Seattle Times, has written an interesting opinion piece about the challenges facing US newspapers.

While we feel far removed from these challenges here in Australia, there is dark news about newspaper circulation in the numbers released late last week – although newspaper publishers would have us believe otherwise.

Newsagents need to monitor year on year sales for newspapers, broken down by segment: foreign, national and local.  While the bushfires and floods impacted our February /  March numbers, overall the trend is down, not dramatically, but down.

The best action we can take in the circumstances of a decline in interest in newspapers is to ensure they are displayed proactively – probably in two locations,  keep costs (real estate and labour) associated with them to a minimum, use them to drive other sales and track the results.  The key is to engage.  Even though I see the decline continuing, proactive engagement could soften the impact of the decline.

I also think newsagents need to debate whether a contract with newspaper publishers is necessary.  My concern is that the industry will be caught up, once again, in contractual issues at the cost of more timely business opportunities.

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Media disruption

Gold Coast Bulletin sets newsagents up

gc_bulletin.jpgAcross the top of the masthead of today’s Gold Coast Bulletin is their offer of a free Roary the Racing Car DVD.  Take this token to your newsagent they advise.  The problem is that newsagents appear to have been provided insufficient stock.  With enough for their own customers, newsagents do not have enough stock to satisfy customers bringing tokens from newspapers purchased from Coles, Woolworths and other outlets.  When they tell customers they have run out, the customers will blame the newsagents.

I am grateful to a Gold Coast based colleague for providing photos and details of this story.

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Newsagency challenges
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