Newspaper publishers are responding to the challenges of online competitors and mobile demands of consumers by purchasing competitors and even non competitors playing in the space. Each time this happens it increases the barrier to entry for others. While the publishers are doing this, they, in Australia at least, are forcing their retail and distribution partners, newsagents, to further increase retail outlets – even if they compete directly with newsagent outlets. This to me seems like double standards.
On the one hand publishers want more control over their own business while at the same time diluting the control newsagents have over theirs. Newsagents, unable to effectively collectively bargain, have little ability to resist the demands of newspaper publishers as to where newspapers are sold.
This channel of specialist news and information retailers become less relevant with every new outlet newspapers are put into. In years to come this will be a case study in business schools and the behavior of some newspaper publishers will be under scrutiny.
This issue is on my mind today as newsagents are being told to supply Gloria Jeans coffee outlets. No discussion, just a requirement. No matter whether you have another outlet selling newspapers next door or even if your newsagency is next door. There may be some exceptions but I have not heard of any yet.
I can see the logic of newspapers in Gloria Jeans outlets. However, how many business do you know of where the owver is forced by a supplier to compete with themselves, to dilute their point of difference?