The Sunday Herald in Scotland has a story about the possible impact of a recently announced free afternoon newspaper on newsagents. The UK newsagent association (NFRN) is holding meetings of members and with the publishers to discuss the lost of sales and customer traffic caused by free newspapers.
As data from Dr. Piet Bakker – published here just a few weeks ago – shows, free daily newspapers are growing. Even though Australia is behind Europe and the US, they are gaining traction. These free dailies provide publishers with an easy sell to advertisers and are being used in many situations to boost advertising sales for the paid for product. It makes sense. In Europe especially publishers have been very successful maintaining revenue through by launching free daily newspapers.
While it’s natural that newsagents will complain to publishers about the impact of these free newspapers, my view is that our energy is better spent expecting the move and adjusting our businesses today accordingly. Free newspapers are not new, we have seen them growing for the last five years. This is change we can prepare for today. Indeed, it is change we ought to have been preparing for long before now.
We need to rely less on newspapers for traffic and revenue. This means we need to build traffic from other categories. It also means we need to adjust the layout of our businesses and focus on higher margin traffic generating product toward the front of our shops. While publishers will resist such a fundamental change – given that newspapers have always had the best location in our shops – they need to allow us to respond to market trends just as they are through acquisition of online businesses, moving their product further outside the newsagent channel and by launching free newspapers.
The newsagent channel in Australia was created by publishers to serve their needs. In 2007, newsagents must put their needs ahead of publishers. Tough decisions face us and we must be businesslike and swift in making them.
For the record I am not advocating that newsagents get out of newspapers, rather that they invest real estate and labour in newspapers according to their anticipated return to the business.
Free newspapers (i.e. MX) are not a threat. They are trashy and tend to be just another advertising revenue stream. I am CBD based, where MX is given out free of charge, and did not suffer a decline in sales when free newspapers began. In fact, initially there was a free morning paper as well. This did not last as people did not want a poor substitute for their morning paper. The biggest threat to newspapers comes not from these free newspapers, but from the web and their free news websites.