Newspaper home delivery is on the move with more newsagents selling, merging or walking away from their newspaper distribution territories. While I do not have accurate data, there is no doubt, based on newsagents I have directly spoken with, that movement around distribution businesses has picked up pace this year.
I suspect that the surge in movement is due to new contracts from News and Fairfax which are expected to further challenge the model, a model which the publishers themselves created and which they have controlled since its inception.
It is interesting seeing more corporate distribution businesses emerge through this period of disruption and consolidation. There appears to be more activity in Victoria in this area than any other state from what I can tell.
While the challenge for newspaper distribution businesses remains, the larger businesses do have more opportunities for leveraging scale to their advantage. They can achieve this by reducing management and other overheads.
That said, the newspaper home delivery model is a problem which needs attention.
A model where you cannot set your sell price, cannot reasonably control your costs, cannot leverage ‘your’ customer base for other revenue and have to lower margins when your supplier discounts their product is a difficult model in which to grow outside of acquisition and this has its own costs.
You are right Mark newsagents have lost control of costs and their busineses because publishers are only interested in home delivery customers getting cheep subscriptions. The latest promotion with woolies petrol shows the disregard they have for newsagents
Double fee = happy newsagent
still cheaper than fuel required to jump in car to pick up paper
For those not in NSW the promotion with Woolworths Petrol is spend min $5.00 and receive a FREE Telegraph – promo goes for 2 weeks ! N/A still gets 12.5% but who knows what Customers we loose, and also what % Woolworths receives ! Perhaps News Ltd can get Woolworths to do their deliveries- if they think so much of them !
This happens about every 3 months with Franklins stores in NSW. I was (and still am) anti the concept because it effectively devalues the newspaper and deprograms the customers in the long term. I have a subscriber who has opted NOT to renew his paper for at least 4 weeks, because he knows he can get a free one with a few groceries each day!!However, another long term observation is that it seems to make very little difference to our shop sales (maybe 10%). We appear to have mostly loyal (anti Supermarket) customers!! And the commission on the give-aways is nice and more than compensates for the few sales that we lose. But I still think Fairfax is destroying their long term customer base with these short term freebies and low cost offers.
Just recieved the fax.
1 cent a day increase……….
The notification we have to send to the customers will cost 10 times more than this increase.
Do we need better representatives?
Wow! You’re lucky – Our rises are usually 1c a week! 😀