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

The future of newspapers

Jon Faine moderated an excellent discussion yesterday morning on local ABC radio in Melbourne on the future of newspapers.  I found the discussion between Michael Gawenda (former editor of The Age), Eric Beecher (former editor of the Sydney Morning Herald) and Sally Warhaft (editor of The Monthly) to be most interesting.  They covered disruption brought about by the Internet as well as challenged brought about by the current economic situation.

I hope they load the discussion to their website as I am sure many newsagents would find it interesting – our channel gets a fleeting mention from Eric Beecher.

A conversation for another day could be about the challenges faced by businesses and professions built around newspapers. Look at newsagencies.  Our channel was createdby a publisher in the 1800s on the goldfields of Victoria.  We have been servants ever since.  We are struggling to contemplate life out of service.

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Media disruption

Queensland newsagents challenge Minister for Small Business on new Award

At a small business forum in Brisbane on Monday evening, Federal Small Business Minister Craig Emerson was asked about the looming reintroduction of penalty rates. After protesting at being ambushed by the question, he went on to demonstrate a good grasp of the issue but offered no comfort to the small business owners in attendance.

The Minister requested a full written submission from QNF on the issues and has undertaken to try to pursue the matter. This is a good outcome – if he honors his undertaking.

The changes to rates are a challenge for newsagents since around 75% of what we sell is at fixed price – meaning we have less capacity to manage our businesses to better cope with chunky penalty rates.

I am told that following the meeting there was discussion with the Minister about the status of the ANF in representing newsagents. Those participating made it clear that the ANF does not represent the majority of Queensland newsagents.

I am grateful to colleagues in Queensland for sharing information about this.

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Newsagency challenges

Being charged extra for opening early

Colonial First State, landlord for our newsXpress Forest Hill store has introduced an extended trading hours charge.  We have been charged because we open before the official centre opening hours each day.  They have applied this charge retrospectively – from July 2008.

We are still waiting for compensation water damaged stock removed from our shop when CFSPM contruction went wrong and we were flooded in 2007.

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Retail tenancy

Do newsagents need a newspaper distribution contract?

News and Fairfax are said to being close to putting new distribution contracts to newsagents for their consideration. The current contracts were negotiated in 1999 as part of the process of deregulation of newspaper and magazine distribution in Australia.

While newsagents and those who represent them will focus on the terms of the proposed contracts, I’d suggest newsagents first consider whether contracts are appropriate.

Distribution newsagents beat themselves up every day fulfilling their obligations under the current contracts for, in most cases, less than minimum wage.

Newsagents are paid less in real terms today for every newspaper they handle than ten years ago when the current contracts were negotiated. Newsagents cannot sustain themselves as the working poor.

By saying no to contracts we are saying no to being a distribution newsagent. This would be a big deal for most newsagents as we would be rejecting the very purpose for which our channel was created.

Not having a contract would give newsagents more freedom to define their own future. While many may fear such an opportunity, others have already found the freedom to be personally and financially rewarding.

I’d encourage newsagents and their associations to open debate on this and seriously question whether having a contract is important.

For the new contracts to be interesting, they need to improve compensation for newsagents and provide more local business control over the profitability of newspaper distribution. They would need to allow newsagents to be business people and not process workers.

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newsagency of the future

NDD likely to block newsagents on Alpha magazine

I know from my own experience recently with magazine distributor NDD that they are unlikely to respond to requests from newsagents that they not supply Alpha.  I wrote to NDD asking that they not supply certain titles.  They threw up all sorts of barriers and eventually refused to give me permission to control the titles I get for my newsagency.

If NDD follows the same approach for newsagents who ask to not be supplied Alpha we could find ourselves forced to take Alpha.  It is this lack of control which has led some newsagents I have spoken with to close their accounts with NDD.  I guess they have exercised the ultimate control.

It should not come to this.  If I am expected to carry the risk of stock in my newsagency then I ought to have absolute control over the stock I carry.  It is my money after all.  NDD appears to have forgotten that.  Just as News Ltd has forgotten that it was newsagents who made Alpha the sales success it is today.

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magazine distribution

Easter card sales up in newsagencies

Easter card sales are up on last year in the newsagencies for which I have sales data.  I’d expect to see the season end with double digit growth in some stores.  This is excellent given the economic conditions and that, at this stage, the same growth is not being seen for Easter Eggs.

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Greeting Cards

Promoting Donna Hay at the counter

fhn_donna_hay_apr09.JPGWe are promoting Donna Hay magazine at the counter.  While the free shopping list pad is not original and the publisher provided one poster of marketing collateral we decided to give it a go.

Publishers need to understand that not all newsagents are the same when it comes to promoting titles.  The more they invest in our business with professional collateral the more likely we are to engage with their title.

We like to change our displays regularly, at least weekly and usually more often.  regulars quickly become store-blind.

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magazines

Promoting Burke’s Backyard to attract shoppers

fhn_burkes_apr09.JPGAfter a week at the counter, we are promoting Burke’s Backyard right out the front of the shop.  We have done this because we had the marketing collateral to create an appropriately bold display and because we think the title will appeal to passers-by in our centre.

At the counter it worked okay, but not as well as expected.  This is another reason for trying a new place.

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magazines

Alpha magazine coverage spreads

Posts and comments here about Alpha magazine and the plans of some newsagents to boycott the title have been covered by mUmBRELLA, a respected site covering media and marketing in Australia.  I especially like that they have also published the picture showing how one newsagent converted the Alpha stand into a New Idea stand.

It is good to see the newsagent stand against a supplier get broader coverage.  This is a challenge for us because Fairfax and News would never publish the story.

I’d urge newsagents to continue to engage on the Alpha issue. Let your News Ltd representatives know what you think, comment on Alpha posts here, If you move Alpha, put a sign up advising your customers why, If you remove Alpha altogether, be sure to let News Ltd know why.

As I noted in an earlier post, what News Ltd has done to newsagents with Alpha is un-Australian.  Personally, I consider it to be unethical.  We need to have the balls to maintain our rage.  If sales of the magazine suffer, advertisers will notice and News will become engaged.

Now if only newsagent associations would get behind this issue.

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magazine distribution

Interest in the Australian magazine system

I have been talking over the last few weeks with people in two different countries about the Australian magazine distribution system.  They wanted to know specifically about EDI standards and how compliance is driven.  In each case, their country is considerably behind Australia in terms of management of supply – invoices are manually processed, returns are manual and credits can take three months or more because of this.

While I have serious issues with our magazine distribution model, it is cleasr from talking with others that the Australian system is nowhere near the worst in the world.  That said, it does not stop me wanting the AAustralian magazine distribution system to be better and fairer to newsagents.  I want to see costs for newsagents reduced, supply which more closely matches sales and better ranging control so that we carry a commercially viable range and not what three distributors separately think we should have because it suits them.

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magazine distribution

Acrylic displays made to order

dsc06496.JPGI am often asked where newsagents can source acrylic slatwall fixtures made to order.  We have had many such fixtures made by Murooba Products.  Owned by ex newsagents Doug and Anne Denham, the fixtures they have made are serving us well.

Click on the image for a larger photo of  some aisle end card fixtures they made for one of our Sophie Randall shops.

Regulars here will know that I think that traditional newsagency shopfits are no longer suitable for our needs.  Purpose built fixtures do not offer the flexibility we will find necessary in the coming years.  Acrylic units like those from Murooba can be moved or replaced easily – through the seasons or as the longer term needs of the business change.

Murooba can be contacted on 03 5248 3729.  For the record, I have no commercial involvement with Murooba.

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retail

Mediabiznet reports on call for magazine supply adjustment

My March 22 blog post calling for urgent adjustment to newsagent magazine supply has been picked up by mediabiznet – an information soruce for media and marketing industries.  It is good to see the issue of magazine oversupply, especially imported titles, being covered by others.  I wish they had linked to the original blog post as it provided more details on why the adjustment is necessary.

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magazine distribution

Podcast changes newsagent opinion about sales based replenishment

I have received some excellent feedback from newsagents who have listened to the first newsagency industry podcast which was published by Mediaweek last week and in which I participated.  The most significant feedback has been around ACP Magazines’ Sales Based Replenishment program.  Several newsagents commented to me that the podcast changed their opinion about SBR and that they now support the initiative.

I like SBR because it relies on good use of technology in newsagencies.  The reward for newsagents is eliminating sell-outs, especially for monthly titles which experience an unexpected spike in sales.

The podcast helped explain the benefit as well as some of the history to the latest incarnation of SBR.

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magazine distribution

Newsagent frustration at increase in Golden Casket payout limit

Golden Casket in Queensland has advised its retailers, including newsagents, that they are to payout up to $1,500 on a prize – up from the $500 limit.   This move is causing concern among newsagents in terms of the cash they will need to carry, especially after a superdraw, and the time it will take to be credited by Golden Casket for the payout.

In Victoria we payout up to $4,000.  While there is discretion to the upper end of this amount, in my own newsagency we always try and make the payment because it reinforces our business as the go to place for lottery products.  In today’s marketplace we need to seize every opportunity possible to build customer loyalty.

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Lotteries

Australia’s oldest paperboy?

robbie_mcgregor.JPGRobbie McGregor has delivered newspapers to homes on the same route in Pakenham for fifty years.  He is featured in Century of Faces, a 44 page special report in a recent edition of the Pakenham-Berwick Gazette to commemorate the centenary of this wonderful local newspaper.

Robbie has worked for seven owners of Pakenham Newsagency – one of the early owners was the Bishop family.  I worked for the Bishops in 1970 and 1971 after school.  This is when I first met Robbie.  Back then, as I am sure is the case today, Robbie was your ideal paperboy – on time, accurate and cheerful.

Kudos to the folks at the Gazette for featuring Robbie McGregor, paperboy, in their Centenary of Faces.  I am grateful for the memories.

We have plenty of stories like Robbie’s in our newsagency channel.  We ought to share more of them.  They make for good listening.  They are also an important record of traditions.  These local stories are what connect us with our communities and give locals another reason to trade with us.

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newspaper home delivery

Promoting Annette’s Sym’s Symply Too Good cookbooks

symply_too_much.JPGLike many other newsagents, we received many copies of each edition of Annette Sym’s Symply Too Good To Be True cookbooks on Friday.  While I suspect (hope) that the Network Services magazine allocation system made a mistake, we are trying to make the most of the situation by creating a display at the entrance to our main magazine aisle.  We have dressed an old stand and given it over entirely to Annette Sym’s popular brand.  I certainly saw customers browse products from the stand today after they had made their selection of another title elsewhere in the aisle.

Looking at the photo now the only issue may be our placement next to the Darrell Lea stand.  Hmm…

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magazine distribution

News Ltd forgets how important newsagents were to Alpha

News Ltd was singing our praises prior to the launch of Alpha magazine and telling analysts how important we were.

“That positioning in newsagents is a massive advantage,” he says. “And the strength of the newspaper brands gives that instant imprimatur, gravitas and authority.”

Phil Barker, Managing Director of News Magazines was quoted in The Australian on April 28, 2005.

We need to understand the importance of our real-estate and run our businesses accordingly.  While the opportunity to do this nationally has well and truly passed, we do have an opportunity through other communities – such as marketing groups which have levers of discipline.

What News has done with Alpha is a wake up call.  Only time will tell if it did indeed wake us up.

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magazine distribution

News Corp investing in Kindle like device?

Peter Kafka at Mediamemo is reporting that News Corp. is investing in a colour Kindle-like device. Here is what Rupert Murdoch is reported as saying during a Q&A session at a cable industry conference in Thursday, talking about the Amazon Kindle:

We need new models. The first inkling of it is the Kindle. You can get the whole paper there. And you can get the whole of The Wall Street Journal on your BlackBerry. We’re investing in a new device that has a bigger screen, four-color, and you can get everything there.

The Kindle is changing the way people read and buy books in the US.  At some point similar technology will disrupt the purchase and distribution of newspapers and maagzines.

UPDATE: The Australian covered this story as well.

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Media disruption

February customer newsletter

nx_fhn_apr09.jpgClick here for a PDF copy of our April 2009 customer newsletter for our newsXpress Forest Hill shop.

We have copies of the newsletter on a stand at the front of our newsagency  – for any passer-by to take. This is in addition to advertising flyers promoting ink, books and other deals we also make available customers from the same location.


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Customer Service

AFL product drive excellent sales

footycards.JPGJust as we found with the season launch AFL Record earlier this year, the AFL cards are selling very well this year.  While magazines may be challenged, there are related products, like these AFL cards, which are trading well.  Year on year we are up 64% in unit sales of these.  I like the trading cards because they drive repeat business if we maintain a good level of stock.

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magazines

Maxim UK print edition to close

The UK edition of Maxim is closing its print edition and moving online from next month.  The US edition will replace the UK edition at retail.  The Guardian reports that Lad’s mags like Maxim are doing it tough in the UK:

Lads’ magazines are suffering heavy declines across the board. IPC’s Nuts fell 13.3% year on year to an average weekly circulation of 234,034 in the six months to December 2008; while weekly rival Zoo, from Bauer Media, fell 18.7% year on year to 145,555.

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magazines

Displaying women’s health magazines

fhn_womenshealth.JPGClick on the photo to see a larger version of what I’d consider to be be best practice for displaying women’s health realted titles.  This is from our Forest Hill store this morning.  As we do with other categories, we anchor the display with top selling brands: Women’s Health, Good Health and Medicine, Health Smart and Diabetic Living.  Blocking key brands in this way draws attention to the category.

Newsagents often say that they don’t have the space to display magazines in this way.  We make it our business to find the space because the sales benefit makes it worthwhile.

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magazines

Overloaded with patchwork magazines

fhn_crafttitles.JPGThe photo shows three of the packs of patchwork magazines from Express Publications.  This is a perfect example of oversupply.  The titles in the packs are similar.  They demand space for an already well-serviced segment.  Given the packaging and quality of the products themselves I’d regard these as junk – sent in the hope of theft or, maybe, purcahse by a less discerning consumer.  having to deal with poor selling packs like these from Express soaks up our time and cash, away from more profitable magazines.

The magazine distribution model is in need of urgent review.  I was hopeful that the ACCC questions about this might lead somewhere.  I am now concerned that this appears unlikely.

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magazine distribution

Newsagency industry podcast

I participated last night in a podcast about the newsagency industry for Mediaweek magazine.  Moderated by Brenden Wood, Eugene Varricchio – Group General Manager – Retail & Distribution – ACP Magazines, James Manning – Editor – Mediaweek and I talked about magazines in the newsagency channel and the challenges we encounter and the opportunities ahead.  The 30 minute discussion started with a look at the issues surrounding the changes with Alpha magazine.

It is good to see the newsagency channel featured and discussed in this way.  As Eugene points out, we account for sales of mroe than 50% of ACP magazines product.

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magazines
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