We run store syndicates for Tattslotto, Powerball and Oz Lotto games every week at our retail outlet – newsXpress Forest Hill. One of our Syndicates won $11 million Thursday night last week. Our customers are thrilled. They’re buying more tickets as a result. Some of the winners though seem less happy. “About time” was a comment from one of the winners – someone taking home over $1 million as their share. Those who didn’t win were much happier than this person. Ah, human nature. The biggest joy for us was the customer who won $5,000 in the same lottery draw. They deserved it and needed it and their face beamed happiness and thanks. It was great for our people in the store to take a moment and soak up some of this happiness.

It’s the day after the AFL Grand Final in Melbourne and newspaper sales in my part of the world are proof that content sells. No deals, no competitions, no giveaways. Just good coverage of yesterday’s Grand Final in the way only a newspaper can cover such an event. There should be more days like this with newspapers getting back to the business of being newspapers.

Some newsagents have removed Vodafone signage from their stores in protest at the Vodafone decision to cut commission by 37.5%. Others are talking of refusing to offer Vodafone recharge. This channel of indepedent small business operators is reacting because the Vodafone decision is another in a long line of decisions by big suppliers cutting into margins.

Newsagents are reeling after Vodafone announce a 37.5% cut in sales commission.

Around 2,600 newsagents have invested heavily in technology, delivered valuable in store real-estate and increased sales significantly. The reward for all this effort? The 37.5% cut in commission.

Under the new pricing newsagents receive 5% for Vodafone recharge sales.

Vodafone says that newsagents will make more because of growing sales an that the higher commission is competitively unsustainable.

Newsagents have high operational costs: around 11% of turnover goes in wages; rent – between 6% and 12% (depending on location); theft – between 3% and 5%; overhead – 5%.

While Vodafone recharge brings traffic to newsagencies, most customers want the recharge and nothing else.

To lose 37.5% of revenue having just invested in equipment and real-estate is a body blow to small business newsagents and something Vodafone could have managed better.

Why newspapers are finding new routes to new markets is a good analysis of significant changes occurring in the UK newspaper distribution space.

While our marketplace is difference we are experiencing change, significant change. What the MediaWeek analysis does not cover is the impact on the small business newsagents. The impact of loss of traffic will be significant. The big question is when. Phillip Meyer says newspapers will vanish in 2040 (in his book, The Vanishing Newspaper), newsagents say they will never vanish. Regardless of your position the channel is being impacted. Publishers are leading the change and newsagents need to understand the impacts of their moves and to take initiatives to mitigate the impact and find new traffic.

Princess Mary is a godsend for weekly magazine publishers and newsagents. Put her on the cover and sales jump. In my own store I know Mary can add between 15% and 25% in sales. While yesterday’s New Idea has been out barely 24 hours I can tell from the sales data that this issue, with Mary on the cover, will be at the high end of the range. Mary is our new Diana since the content almost does not matter – the key is the photo and the prospect of more inside.

Last week’s imported Hello! is another example of cover power. Kylie Minogue was on the cover and it was a sell out in five days whereas we would usually return 30% of supply.

While the science of magazine covers is not a new discussion, it is important to newsagents and other retailers as it helps us attract new shoppers and that underpins our relevance compared to online, for the moment.

In just four months we have seen thirteen new Sudoku magazines published covering twenty individual issues. This is a new segment within the magazine category, a segment quite different to traditional crosswords. Sudoku sales are strong and smart newsagents are leveraging of newspaper traffic to grab these sales.

While on the one hand I comment and even worry here about the impact of technology on newspapers and magazines and in particular newsagents, on the other hand I’m happy to cheer this bricks and mortar success with Sudoku product. No other retail channel could have launched a new magazine segment like Sudoku as successfully as newsagents have. The success underscores a value proposition newsagents have for publishers in launching titles – as long as we have the core traffic necessary.

2005 started with barely a whisper on the pages of newspapers and magazines about the impact of blogging, podcasting, better mobile devices, 3G and broadband in homes. It was as if the changes being talked about so openly in Asia, Europe and the United States was not relevant to Australia. The whispers gained some volume following Rupert Murdoch’s speech in Washington in April to the American Society of Newspaper Editors. Then, in the last month, it’s as if someone has said it’s okay to talk about this stuff, it’s okay to speculate about our future. The whispers have become a shout.

Most of the capital city dailies have run stories about the impact of the Internet. The Age, the Sydney Morning Herald and the Australian Financial Review have written the most from what I have seen. This month’s Marketing magazine has an excellent if brief round up including an excellent piece by Martyn Thomas about whether newspapers will survive beyond 2040.

While I would have liked newspapers and business magazines to have paid more and earlier attention to the impact on mainstream media of technology and other changes noted above, their coverage now is welcome. I wish newsagents would pay the same attention to the changes going on around them. The old arguments about why people like newspapers over a computer screen are redundant. Newsagents and others ignoring the changes need to either get a new line or develop a business plan to help their business navigate the change.

The changes are inevitable as we can see from elsewhere in the world. What we need to understand and navigate is the impact.

Footnote: Maybe publishers could have frank dialogue with newsagents about what their experts see as the likely impact on the news and information supply chain.

It’s not even a week old and the Google blog search is having an impact. This move by Google is the legitimisation necessary to bring more eyeballs to blogs. The Google ‘endorsement’ makes blogs another medium. Traffic is growing thanks to the Google search and bloggers are talking about it.