Yesterday’s Australian Financial Review ran a story about Sensis’ launch of HomeAtYellow, a website covering all things relating to home renovation. Neil Shoebridge’s article said that Sensis was considering producing a magazine covering the same area. Please no! The last thing Australia needs is another magazine aimed at renovators. The market is well covered by titles specifically aimed at this market and other titles which cross-over into this area.
The AFR article said the magazine would be 164 pages and have a cover price of $8.95. On these numbers and based on an average scale out of five copies – anything less would be useless – the title would be loss making for newsagents. We would make $2.24 per issue sold. However, the size of the magazine would mean that I have to commit two pockets for display. This and the labour involved mean the title would have operational costs of over $6.00 per month. So, we would need to sell three copies to be profitable.
Newsagents provide a low cost distribution channel for magazines, especially new magazines which seek to trade off our exceptional traffic in search of a market. I’d be happ to support new titles but for a premium. For example, if HomeAtYellow does launch as a magazine, newsagents ought to receive 75% of the cover price for the first three issues and 50% for the next nine. This would provide the incentive necessary for our investment in real-estate and labour.
The current commission structure for newsagents provides magazine publisher access to our real-estate, in many cases, on a below costs basis.