News Limited approached me earlier this week following my post about their imposition of a new freight charge in some parts of South Australia. They provided a press release / statement on their position. I did not publish it here as it did not add to the situation and I didn’t want to put their case. The ANF in SA has published the News statement, unfortunately.
My view is that what News is doing is wrong. They are passing on freight costs selectively. Also, they are not communicating clearly and do not appear to be communicating with customers – but that may come with time. The ANF should be as clear on its position.
News should apply freight to all non suburban deliveries – user pays right?! Their selective approach is problematic for them. They could also have produced advice for newsagents to place with the products. Finally, they could have a cover price for the affected areas – to show it’s a News charge and not a newsagent charge.
There are times when publishers treat newsagents as agents and other times when they treat newsagents as retailers. They can’t have it both ways.
Hi, this is Dan Demaria from News Limited here. I head up marketing and circulation for News in SA. Unfortunately there are a few errors in Marks blog which I’d like to correct –
News Limited is “not communicating clearly” – this is incorrect. We are in market this week communicating face to face with all directly affected newsagents. This will take a week or so to get around to all newsagents in these rural and regional areas. It wasn’t our intention for news of this to go public until these affected newsagents heard from us first and in person.
News Limited “do not appear to be communicating with customers” – this will happen in the correct order as planned and after all affected agents are notified in person first.
“News should apply freight to all non-suburban deliveries – user pays right?! Their selective approach is problematic for them” – A freight surcharge is already in place for SA product into Broken Hill as are other News Limited and competitor product around the country; other SA country areas are under review according to the relative costs of delivering to these areas.
“They could also have produced advice for newsagents to place with the products. Finally, they could have a cover price for the affected areas – to show it’s a News charge and not a newsagent charge”. – This will happen, as planned, by mid-June. We are only a few days into telling affected agents and not close to execution of the freight surcharge.
There are times when publishers treat newsagents as agents and other times when they treat newsagents as retailers. They can’t have it both ways. – In rural areas of SA, newsagents are both agents and retailers
If any newsagents have any concerns please do contact me at circfeedback@news.com.au
Dan, thanks for responding here. Too often suppliers send me corrections or their position on something and want me to publish it. Some say commenting here legitimises the place. So, thanks for putting the News position on this.
On my agents / retailers comment – I think you have missed the point. This is your problem / challenge to resolve, not your agent’s.
Since Dan has been so open in his comments, I wonder if he could divulge some answers to the following queries which I am sure most agents would be eager to know:
* Is it legal to impose a freight charge under the current contracts these newsagents have signed. It would seem a distinct and costly variation of the contract.
* will this type of charge be implemented into other states.
* will such agents themselves also be able to charge higher delivery fees as their is obviously a higher expense involved in these regions for the distribution of newspapers than in other regions.
(why else would a freight charge be introduced)
Look forward to your response Dan.
There certainly is a challenge Mark – News Ltd has been subsidising a number of loss-making routes for many years. For our West Coast and Kangaroo Island routes, we now lose a significant amount of money on every paper we sell. This has become unsustainable and so in order to continue to deliver our newspapers when and where our consumers want them, we have been obliged to add a freight surcharge. No doubt this will be on-passed to customers who aren’t strangers to goods and services costing more the further away from their source of production. We are still committed to deliver to as much of the state who want to read us but it is obviously not sustainable to do when a loss is made on each sale. This is the best resolution we have to this challenge. We always welcome better ideas though.
Dan my experience is that News does not welcome alternative ideas. Also, it currently subsidises delivery to many areas.
Dan then why can we not charge extras for our home delivery customers if we are running at a loss .news can do it but yet we cannot . We are suppose to deliver for peanuts but you guys charge what ever you need to to turn a profit
Its an interesting dilemma that Dan outlines. Most (if not all) home delivery agents (metro and country) lose money on every paper they throw over the fence. Sadly its not only rural and remote customers that require a delivery surcharge, it basically every home delivery customer. When everyone from the publisher down to the customer recognises that 17 cents aint in the delivery cost ball park, and even the commission on the sale doesn’t bring it up to the actual cost of delivery, then we can get to the point where the customer pays the real cost of the home delivery service. In this day and age where a single cigarette costs 75 cents, and a bottle of water is $3.50, 17 cents to have a paper wrapped and delivered on your front lawn before 6am doesn’t quite cut it.
Good points james and Shaun. However, this is about delivery to the agent. That’s what News will say.
It’s time the company gave its agents the same commercial levers it has for itself.
If I was a distribution agent today with a run I could not easily quit I’d charge y own price and stuff the consequences.
gree more News , are not interested in alternate ideas on anything. Also, they couldn’t care less about delivery times to transport and agents, plus they dont like to commonicate, it all appears a big secret.
mark, previous blog should have started—–
Mark I couldn’t agree more News etc etc.
It is about 12 years since we started charging our customers an amount for home delivery that reflected our costs plus
an amount to make it worth our while. We have had one or two tiny squeaks over the years from a rare city, but it has all gone down smoothly, we still deliver, we still have customers.
in the last year our deliveries have grown, and we are in a mature market (no new home expansion etc).
Charge for your services !
Delivery newsagents are running a business not a service, I’d be amazed if any newsagent still charges only what the publishers tell them to.
Next month News Corporation will spin off it’s publishing arm from it’s vastly more profitable entertainment business.
“The impending split means it can no longer support massive losses on some of its print
titles by ignoring costs and offering content from its most popular mastheads free online”.
I’m no expert, but I would imagine these sort of extra delivery charges are just the tip of the iceberg in an effort to reign in costs.
Right now, some South Australian newsagents are experiencing the challenges of this move by News. They need our support.
I might misunderstand the terms of my News contract, but Im of a view that the rates are not what News are telling me to deliver at, its what Ive contractually agreed to do them for. And certainly News and Fairfax are only reimbursing me the contracted delivery rates on direct subscribers. Jenny and h, I assume you are in breach of your contract or have you reached some agreed variation to your contract.
Almost every single home delivery I do for News is to a customer that I also deliver the local paper to. Hence, I charge to deliver the local paper. I am not in SA, but I am quite a ways from a Capital City, and I havn’t seen a News rep in yonks, they know not what I do
To Editor of News Limited. Resident of Tumby Bay Eyre Peninsula. We travel 14kl on muddy or dusty roads to get our paper. No trams/buses/trains/taxis to get us to or from work of social activity. We pay a River Murray support levy and yet do not get River Murray water. We collectively do this to help other people in our State including residents of Adelaide. Why then could you not increase the cost of papers say 20 cents to everyone across the State and everyone would be happy and you would still achieve your desired outcome of covering costs. Do you want everyone to get news online and “stuff” the poor country areas?? What about the elderly citizens who do not have a computer? Get real News Limited it is about time you gave equality to your readers and those who advertise with you. Yes that is right, you do get income from your advertising fraternity. Why don’t you increase that by 60% and see what hits the fan. Think about your readers instead of how you make your bottom line. You can and will make a better decision because I know you can.
Well said Wayne
Yes, Wayne this decision is typical of the ‘bully boy’ thinking. It just goes to show that they don’t give a stuff about their customers, contrary to what they say. Remember their new logo : “WE’RE FOR SOUTH AUSTRALIA” Their actions seem to throw some doubt on that, don’t they.