Victoria is a hive of activity as newsagents sell, licence or lease off their newspaper home delivery territories. By my reckoning there have been more deals in the first three months of this year than all of last year and even that is probably understating the situation. Some of the deals are long term newsagencies getting out of home delivery.
There are three types of deals: outright sale of the territory (as I did in my newsagency); contracting another party to undertake the physical delivery while you maintain the accounts; contracting and or licensing the entire delivery business including accounting for a fixed term. There are other variations but these three are the most common.
The most common reason newsagents cite for getting out of home delivery is that the economics no longer work for the average size newsagency. Given that the net return from delivering a newspaper has not increased in more than fifteen years and given that newsagents have few options for reducing costs there is no choice for many but to quit. It is only when an operator manages 2,500+ home deliveries a day out of a warehouse that they can start to make progress on their net return.
I’d be surprised if the newspaper publishers – Fairfax and News – are not concerned about this trend. As these distribution businesses become bigger and stronger they will be more demanding of the publishers. The publishers must also be concerned about their fading connect with retail newsagents. In fact, the situation is so dynamic at present that I would suggest it is time for a forum where newsagents openly discuss the various models. One was held over a year ago – the world has changed considerably since then.