Further to my blog post this morning about News Limited’s T2020 newspaper distribution consolidation trial, News Limited published further information, in a letter today to newsagents. They have also published a Q&A document.
Tomorrow, a new website, www.news4newsagents.com.au, will be launched. It will be a forum for News to communicate with newsagents on a range of initiatives, and newsagents will be able to send their comments to us through a feedback form on the website. Newsagents also have access to direct email contact: newsagents@news.com.au.
Newsagents letter – tick
Q&A document – tick
New website tomorrow – tick
Newsagents direct email – tick
All sounds positive to me.
If there is one thing for sure and certain is that News Ltd have their shareholders interest first and themselves second. The newsagent is last in the pecking order.
I cannot believe that they continue to treat newsagents this flipantly for so long.
Most are husband and wife with some extra help for home delivery. They wake up at 3am to receive papers, work on dirty oily machines in dangerous conditions at risk of losing a finger (send in the AWU Bill Shorten); then drive in run down cars to deliver the paper in “hail, rain or shine”; then open the shop and wait for the phone to ring with a complaint for a “missed/stolen” paper, or wet paper or a paper with no tv guide. Then they have to pay News Ltd weekly, the driver weekly / fortnightly but wait for it, send out invoices at the end of the month hoping that they pay on time. Or even argue over cents with old men who only have time on their hands why one week is more / less than they other because of good friday or xmas day; whilst real customers are waiting at the counter. They are also providing a free/cheap call centre because the customer cannot get through to News Ltd. Then they have to also administer stops/starts for no extra fee, and no increase for fuel price fluctuations and insurance premiums.
It’s no wonder they are tired and can’t spend any time on their retail shop cleaning it, researching for new lines, marketing and finding out how to solve their costumer needs or what other competitors are doing.
They said under T2020 the new hub would be profitable from day one. Once they saw the real cost plus OH&S issues plus insurances they said these guys are up at 3am and we don’t have to pay Alan Jones or John Laws wages lets keep the gig going.
News Ltd are on a winner here its no wonder they abandoned T2020 when they saw the real costs.
Do what you think is right for your business because they are doing the same thing for theirs. Stop waiting for change or that they / the associations will negotiate a better deal for you the newsagent. Take control of your future and what you can control within the four corners of your shop.
This distribution model was ‘shoved’ onto newsagents by News Limited with an ultimatum of become part of a 10 000 paper delivery business or become a subagent.
I was at the meeting of the Northside (Brisbane)newsagents which Robert Rigby said ‘the T2020 will roll out no matter what’. ‘Northside to become ‘live’ June/July 2013′. ‘This will cost News Ltd. a lot money to roll out T2020 but we are committed to servicing our home delivery. People’s lives were turned upside down with this T2020 model.
Many newsagents (including us) have made decisions to implement the effect T2020 was to have had on their businesses which will now cost them financially. What financial cost have Southside (Brisbane) newsagents had to ‘wear’ by putting a tender together for T2020?
What went wrong?
News Ltd. believe in print with 11.5 million newspapers selling every week – they are happy with the figures.
We would continue to wrap papers in plastic and throw them over the customer’s fence – they are happy with that.
Newsagents to be in control of what they are paid -for their service -by way of tendering for the 10 000 paper delivery hub – that’s what went wrong (completely agree Clive).
Did News Ltd. employ the company that does the feasibility studies for the tunnels when the T2020 was costed?
Here is the ‘clanger’ – News Ltd. stated ‘Regrettably, overall the trial did not meet our expectations and as such News Ltd. has decided to discontinue the T2020 trial process’. News Ltd. also encourage ‘any agents who wish to come forward with viable consolidation models they wish to proceed with, in any jurisdiction, on a case by case basis, to now do so’.
For a major corporation, as is News Ltd, to ‘sweep this extensive and costly delivery model under the carpet’ and expect newsagents to waste more time and money ‘coming forward with viable consolidation models’ without a very detailed explanation of the collapse of T2020 is treating us once again as fools.
Russel well said .
i will be reviewing my delivery fee structure with a view to increasing it. News are quite welcome to come and do my deliveries for me if they have a problem with what i charge. Im the only newsagent in town.
Its time news got out of the way and let us run our businesses, if they want to sell subscription deals at below the cost of the service, they should also deliver the paper themselves.
Time for agents to collectively tell news to back off or find another outlet and distribution system. The banks might have me by the balls, but News does not.
Rick, we reviewed our delivery price just over 12 months ago and did not loose one of our customers and we doubled the fee.
I might be wrong, but if News are fairdinkim about supporting the newsagent channel the first think they should abandon is delivery cost for their subs tied in with the cover price, it should be a flat fee per paper, say 40c increasing with CPI annually. There should also be a kilometer allowance per run (we have to travel a 12k trip before we even deliver our first paper).
Get rid of some of stupid discounted subsciptions like the $1.30 for a Sunday paper or sell me the paper for that cost.
Just another dream i guess.
Clive and russell,
Bloody well said!!!
As a public corporation News must put its shareholders first. This is their legal obligation.
While newsagents can complain about what has happened so far, I suggest that to do so would be a waste of time. Focus on the future, your future. What do you want from your business.
T2020 tells newsagents that the future is theirs to make.While we make not like some decisions along the way, where we all end up will be 100% up to us.
Our respective futures will not be a function of suppliers telling us what to do.
Think about the alternatives.
Mark is 100% correct, News looks after itself and shareholders first and last so newsagents should do the same. First step would be to disconnect your delivery fee from the newspaper and charge what is viable for your business to be profitable, note I say profitable not just cover costs.
If that cost is 10c per paper per day then great if it is more then you need to charge more, it is simple as News has indicated in order to stay profitable not just cover costs.
i hear a lot of you say “but the contract states” I would say increase your delivery costs, test the contract and see if you even get a reaction from News.
When we sold our runs a few yrs ago we charge $2 per week per paper delivery no matter how many days so most people went weekly intead of only weekends and thse that only wanted weekends paid, and the current agent continues to do the same with nothing from New.
Your businesses need to make a profit not just survive or why are you getting out of bed
Customer surveys indicate they are prepared to pay a premium above cover price for the luxury of home delivery.
The challenge on the fee is that newsagents are the agent, providing delivery on a fee for service model. This is where the News limited migration project brings into focus the relationship between the newsagent and newspaper subscriber.
ive been tossing the idea of a flat weekly fee around for a while,, is anyone else charging a flat fee?
My husband has been harping on about delivery fees for years, it seems this is also a big issue with many other delivery newsagents.
We need to decide on our fee for our own businesses which we all can, but we can’t do anything about subsriptions – this is were News and Fairfax need to listen to newsagents and make changes. They increase their paper prices to keep their businesses profitable, we need to be able to do the same. It’s that simple.
And yes it is common knowledge that customers are prepared to pay more, if they weren’t then paper sales would have plummeted recently, ours certainly haven’t.
Mark, interested investors asking questions when time, effort and money has been put into a new business venture that has been planned, costed and rolled out by a major corporation and then goes ‘belly up’ are entitled to answers and so are the shareholdrers. Then to ask for ‘viable consolidation models’ to be put forward to this major corporation for consideration without knowing why T2020 went ‘belly up’ shows a lack of business sense for all concerned.
ok news might have to look after their share holders first but with out newsagenst selling papers well there is no share holders ., Stop selling newspapers just for 1 week and see how much they value newsagents then .
Russell I don’t necessarily disagree with you. It is what it is. Newsagents each need to decide their future and pursue it. They also need to use all avenues possible, on their own, to get what they want.
Shaun we all need to approach our future in a business-like manager. If newsagents strike they will lose.
Shauns, I wouldn’t do that to my customers or my staff.
We chose to be in this industry, and it does need some changes, hopefully with the collapse of T2020 publishers will now be much more aware of costs involved in newspaper home delivery and do somethng positive for us.
Jenny, if we take what News and fairfax started saying publicly from mid 2012 then they do understand the costs. The suspension of the t2020 trial is not about costs but about process.
My understanding is that the News Limited position on costs has not changed. They have said and continue to say that they accept that distribution agents need to be compensated fairly for their work and that they understand this means compensation needs to improve.
The next steps are all about newsagents working out how consolidation looks for them. Urgently.
My thing is that unless i have missed an email or a letter maybe even a fax News have not even botherd to say why they have aborted the T2020 project and to me that is pathetic , still no dates that anything will be done by . Jenny you may not want to do that to your customers and that is fair enough but News would do it to you with out even giving it a second thought .News comes to the table and says we will only give you 5% for now on and thats it you would have to accept it without any negotiations at all and thats how they operate because they know newsagtents are a weak group
Shaun they had said that the approach followed in the trial was not working.
Newsagents can keep saying what News will do. No one knows until someone goes to them with a territory consolidation proposal for an area. Until then, there is no point in complaining about what might be.
Mark why was it not working pretty simple question . Did newsagents want to much money to deliver ? was 10000 way to much to handle . Why have they not come to the table with what they would give retail newsagents ? The old model will be replaced ,well with what and when .
The letter has your answers Shaun. The market wants something different than what was being trialled and News wants to move faster than the trial. It’s all there.
VANA, among others, lobbied hard for it to be a free market approach.
Mark, I’m sure that they understand costs, they have been increasing their cover prices which I think is great, though unfortunately for us Fairfax has decreased our commission.
My only gripe is home delivery fee, but if they don’t increase fees for subscriptions we will just have to wear it.
Shauns, News haven’t told me why T2020 was aborted, but at this stage it wasn’t affecting me so I don’t really need to know even though I’m as curious as you are. Hopefully they told the newsagents involved, and hopefully they compensate anyone whose business was badly affected by this.
News were supportive of us when we consolidated 4 runs several years ago and they are supportive of us now. It’s a two way street.
I certainly don’t think we are a weak group, I do know it’s a lot tougher for some newsagents than others, but every one’s circumstances are different.
once again news has handled this badly, and in doing so have further alienated the majority of newsagents. the level of mistrust in news is very evident from the comments on here. this will be a major hurdle going forward and i can well imagine the number of runs being handed back will increase, the very thing news was trying to counter. i personally would not want to be spending a lot of time and resources on comming up with a model that news can just reject out of hand. this may not be the case as they see it, but seems to be the perception from my side of the fence. if news stepped aside and stopped selling subscriptions that includes uneconomical delivery, and allowed the market to set the delivery fee (ie what the customer is prepared to pay for a service) then these runs would once again have a value that could be brought and sold if progressive agents wanted to grow their distribution side of the business. while news continues to artificially sets the revenue stream for distribution agents, it will be very difficult for a viable business model to put together.
news has done a tremendous amount of work with T2020 to date and they need to make the information readily available otherwise people will continue to question the real intention of news in this whole sorry saga.
Great comments Clive and Russell.
It was particularly important to hear from Russell to get the facts from a participating agent in T2020.
I think the time has come for newsagents to simply charge their own fee. Who cares what News Ltd or Fairfax say. They will threaten breaches, sure, but newsagents have relied for too long for this to be handled by people higher up. It’s time the little guys made their own rules!
Jenny I am sure they understand the costs too. I’ve not said otherwise. Indeed, the publishers have known the costs since extensive research a decade ago.
News started consolidation 15 years ago in Melbourne and they should have continued with that uniquely Victorian approach.
Rick I am not sure what else they could have done other than to say, as soon as they formed the view, that the plan as it was for the trial was not working.
The core challenge here is that many small businesses need to be consolidated into one mid-size business. It’s a tough ask for all involved.
The best way to test the intention is to develop a plan that serves customers and is equitable for the newsagents and take it to News.
Amanda I am not aware of any breaches threatened in relation to T2020 or consolidation. Let’s stick to the facts.
I am no apologist for News. I, however, do want to see the facts be the focus. What is crucial is what newsagents do next. I expect the first proposals to be from Victorian newsagencies.
Well said Clive and Russell.
Whilst I can’t comment on what News Ltd did/how they handled south side Brisbane, if I stick to the facts in relation to what I was told by News Ltd regarding T2020, the overriding message that remains in my mind is “we don’t know what will happen in the future (re T2020) until after the review is completed in Brisbane”. OR “We can’t/won’t make a comment on what you should do in relation to” the future of ………,(whatever future aspect of T2020/new model outcomes was being discussed at the time, “until after the review SSB is completed”. That message was put out there, probably a minimum of 15-20 times in the space of a 90 minute meeting.
So the message I received in Adelaide on the 6th September 2012 was entirely accurate in terms of what to expect from T2020 going forward. So the situation I find myself in today does not feel uncomfortable, just honest relief that I didn’t have to go through what would have been considerable stress for all stakeholders in south side brisbane trial, coupled with an uncertain degree of disappointment it’s not proceeding.
If I start surmising what went wrong, one could imagine the serious spend involved in just the cost (to News Ltd) of implementing the change in the manner proposed across the whole country. ie driven by News Ltd. Plus how long would it take doing it that way?, And with all the retrenchments going on, would there be anyone left on NL staff to carry out the job of implementating this massive industry change T2020 style? so is it really a surprise that at review stage NL leaders said nah, lets put it back on the Newsagents – there’s enough of them champing at the bit to do it their way and we can get a Global size bonus in savings on Administering the implementation T2020 style. Why wouldn’t you want to suspend it, if it was that bad.
Who knows, maybe the above and maybe a million other things that went wrong (tendering process wrong choice etc) all added up to……… Nah, we’ve sucked it and we’ve seen it and we don’t like it.
So News Ltd have been straight with me, for others it may well be different.
The only thing I am dissappointed with is the comment made in the recent letter which in part says “On a case by case basis, News Limited will consider proposals for consolidation of distribution
territories from interested newsagents, across all states and territories.
If approved, we will offer new
agreements for servicing the consolidated territory on the same terms as our standard distribution agency agreement in the relevant state or territory including as to term and termination.
Even though they have said that in the coming months there will be a “complete review of the monies paid for
distribution services (including home delivery fees) across all states and territories.”, I think they should be undertaking to agree to a T2020 style remuneration package for those Newsagents who have already done some consolidation work or those that put up proposals to do so. I don’t think more of the same commissions and fees is encouragement enough to drive the change through.
Of course if it was the ‘cover costs and then some’ package that blew SSB out of the water, then the future for the whole shootin match will look a fair bit bleaker.
Dennis
Dennis do you have plans for what you might propose. I think what newsagents need to hear from their colleagues is what they will propose. This is where the conversation needs to turn.
i have already consolidated as much as can be done, im the only one left in town after i spend money buying out the other agent, what i propose is that i be allowed to charge a fee that will enable me to get a fair return on investment. i propose news stop offering subscriptions deals in my area, or at least do not include delivery as part of the deal. im sure news bean counters understand ROI. if the market will not pay that fee, then its time to consider whether a home delivery service can be offered. needs to come down to the basics of dollars and cents. country and regional areas need to be looked at differently as we dont have access to the volumes metro distribution agents do.
Investors into this new business venture did what they were required to do by way of tendering. They (and future investors) need to know from News Ltd if the tenders put forward had any influence on their decision to suspend the T2020. If not then a detailed report from News Ltd why the T2020 was suspended before Investors can be assured that they have direction to put forward proposals and work in a partnership with News Ltd to come up with a home delivery model.