In a statement on May 15, News Limited explained why they are introducing an 80 cent per copy surcharge (Monday to Friday) to the delivery of newspapers to newsagents in selected areas of South Australia. This statement included:
We aim to continue to deliver newspapers to all areas of South Australia. However, News Limited 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.
This statement is from a company that has for decades denied newsagents the right to charge an equitable price for the home delivery of newspapers. Despite irrefutable evidence that many newsagents lose money on home delivery, News has, for decades, denied increases in home delivery fees to a level that make them break even let alone profitable.
News has, through its denial of a fair fee for service, forced newsagents to subsidise the home delivery of its products through subsidisation by small business newsagents.
This is the double standard evident in the latest move in SA. The company says it needs to charge the fee to create for itself a sustainable model. If it’s good for the company why has it not been good enough for newsagents?
Okay, the T2020 sessions last year said the company got it and that it understood newsagents needed to be profitable. But what’s happened? How quickly is it moving? The best way it could show good faith with distribution newsagents would be to deliver an immediate increase in home delivery fees to an equitable level, so newsagents did not have to subsidise this activity from their own resources.
What are distribution newsagents doing about this?
Thanks to agitation from a local MP in SA this issue is gaining more attention in the media – including coverage by the ABC. I’ve just done a radio interview on SA radio about the topic. Hopefully, this attention will get News more fairly engaged with newsagents.
I know from prior contact that News would prefer me to raise the matters canvassed here with them and not here. I think the issues raised here are issues for all newsagents. They go back decades. The only solution is for News to immediately permit newsagents to do what it is doing itself – to charge a fee that reflects the actual cost to the business of providing a service.
why is it necessary for news to be involved with setting the delivery fee at all? They are not in a position to know what the actual costs are for each agent so should not be setting any fees.
Every delivery agent must have the right to manage their business as they see fit, market forces will dictate what is an acceptable fee to charge. It may well be possible that home delivery in regional Australia are uneconomic and unless subsidies from the publishers is forthcoming, should be discontinued.
Well said Rick. Delivery agents need to set their own fees as it is their business and they know their customers and the costs involved.
We went from a city newsagency with a profitable home delivery to a country newsagency with an unprofitable home delivery of half the papers to deliver but over twice the distant.
Petrol is dearer away from the city, roads are bad, wildlife damage to vehicles, the list of cost differences goes on but the delivery fee is the same.
They wouldn’t even need to charge the same fees for all customers. Pensioners could be charged less, more papers delivered fees are scaled down, charge more for out of area deliveries, leave it up to the individual newsagent to decide.
If they charge too much they will lose their home delivery business as customers will abandon them and buy their paper from the newsagency instead.
If they charge too little the newsagent will abandon home delivery, which is what’s been happening for years now.
If publishers can’t afford to subsidise loss making areas how do they expect small businesses to.
I have had the discussion (on numerous occasions with Advertiser management) relative to an increase in delivery fees as I am in a regional area but locked into rates as set for the metro. Guess what their answer is when I pose the question as to why? “You can’t charge more because we might lose customers” What a friggin’ joke when they consider it okay to whack an increase on like this. There are parts of my business that does not make as much as I would like, but I just have to grin and bear it. In view of their attitude I think I might increase my delivery fees and use the same standard. To use their words I have ‘been subsidising a number of loss-making route/s for many years’ This is typical of the ‘big bully boy’. DO AS I SAY, NOT AS I DO. Where is our ‘association’ on things like this. What has happened to the Advertiser logo “We’re for South Australia” I think you should amend it to “We’re for ourselves and South Australian newsagents will pay for it”
This is a disgraceful decision by News Ltd. from a diverse company with many different income streams, it is obvious that its print media division must produce the required profits or else.
The Advertiser are giving away papers during promotions ,yet on the other hand are passing costs on to country consumers. They are in reality challenging the consumer not to buy their newspaper
Newsagents and their representative Associations should have drawn a sand in the line a long time ago regarding delivery fees and margins .
Associations in the past have tried to keep both Newsagents and publishers happy this is not always the best way to negotiate the best outcomes for its members.
The old saying there is strength in numbers is relevant to our industry, but for one reason or another we have not been organised enough to use this to our advantage.
I have even seen over the years some Newsagents siding with The Advertisers policies when clearly these policies have not been in the best interests of fellow Newsagents. I find this attitude very un- Australian and weak
So what will newsagents do about it? Act!
Through the many daily interactions and our regular association discussions, News Limited understands that there are frustrations amongst the newsagent community for many reasons. News is working hard to do its part in addressing some of the challenges facing newsagents. With the rapidly changing dynamics of the industry many of these challenges are not easy to resolve, however it is in our interest as much as the newsagent channel to get clarity as soon as is practically possible.
In line with our Mar 7 announcement, we are conducting a holistic review of remuneration. Amongst other factors, the principles of T2020 remain important to our decision criteria:
1. Separating distribution and retail services
2. Consolidating distribution territories
3. Remuneration structure for distribution that is aligned with the effort involved and the commercial realities of the territory
We have committed to announcing the outcome of our review in the coming months.
WHAT A LOAD OF CRAP NEWS LIMITEDl HAS JUST SPUN At the last GNS FAIR in Melbourne I had a meeting with Stephen Kaye about home deliveries charges. The out come was to give him 2 weeks and he would look into our situation and get something resolved . Out of it all NEWS has done nothing no call, no visit.Being treated like a mushroom is a great way to treat someone in a so called PARTNERSHIP. Their policy is hurry up and do nothing it might cost a DOLLAR
News Limited @ 6
“News Limited”. How long do you think you can keep on feeding us this crap.
Many of these so called ‘rapidly changing’ dynamics have been evident for years. Your terminology of ‘clarity as soon as is practically possible’ is the type of cheap rhetoric we have come to expect from our politicians. It is another useless open ended statement.
T2020 I have on fairly good authority (from News ltd personnel) for all intents and purposes has been shelved as an un-workable proposition. The question of remuneration for newsagents has also been a hot topic of discussion for years with virtually nothing eventuating. News limited has been promising ‘an outcome’ from these so called ‘reviews’ for months if not years.
Let me help you out with some advice as to one of your major conundrums: Ask most distribution newsagents what is their major drawback with newspaper distribution. I’ll give you a hint as to the answer. It’s a four letter word beginning with ‘F’ (fees). You don’t need an association to solve that problem. ‘Fee for service’ and other forms of remuneration have supposedly been discussed for at least two years with no result. Promise lots – deliver nothing.
Your last paragraph says it all. ‘Outcome of review in coming months’ is just another statement of which we can give no credence. Give us a break. With due respect your entire blog is just BS. Do something to prove me wrong.
We’ve been in the business for 3 years and researching it’s potential for the previous 2.
All we have ever heard from News Ltd is review, wait, hold, review, wait, hold, blah, blah, blah.
There’s never any action. This company is run by an 83 year old man. The fish rots from the head down.
We were part of a group who formed a consortium to merge territories. We were given every encouragement to proceed, then suddenly we were asked to hold and wait while News Ltd conducted a trial in Queensland.
Despite the encouraging platitudes of the Mar 7 annnouncement regarding voluntary consolidation they still haven’t progressed. They are still reviewing, holding, waiting, blah, blah, blah.
Don’t worry about associations or what other newsagents do or don’t do.
Just do what you need to run your business, if you bend a few rules so be it.
” so what will newsagent do about it.
ACT. I fear not. Those with runs that lose
money will some how justify in there own
minds that things will get better.
Imagin if in the next 30 days 1000 loss
making runs are handed back Australia wide. It could be the start of the revolution.
News Limited, you have not addressed the two core issues in this blog post:
1. Your inconsistent application of this approach of charging what it costs you to deliver. Why just this region in SA?
2. Why you have one rule for yourself on charging what it costs while not allowing distribution newsagents to do this?
You do not need to review newsagent remuneration. You have the data. Every day you force many newsagents to lose money on delivering your product is another day of failure to be true to your word.
So, News and Fairfax, no more reviews. Act. Show that the trust and faith you asked of us was justified.
I wonder who News Limited actually is ?
News Limited // May 24, 2013 at 3:47 PM
“We have committed to announcing the outcome of our review in the coming months.”……………………………………….Why does this review take months ?
Do you not have enough data to carry out a relevant review ?
How can Newsagents help you in this process of data collection ?
Any further response likely in this area ?
Lets us not forget Fairfax has cut our commission.
Doesn`t anyone actually charge what News tells us to.I don`t.
If News or Fairfax has a problem with this they can start delivering tomorrow
The question that I think needs to be resolved before a course of action can be determined is:
Does the good will and the desire to have an ongoing relationship negotiated in good faith still exist between Publishers and Newsagents.
Once we come to terms with the answer to that question, we can determine an appropriate course of action.
In my opinion there is a gap between the rhetoric and the actions of publishers, and hence Newsagents and their representative bodies need to look long and hard at the above question.
An example of the credibility gap. News Corp from the CEO down have enunciated a commitment to print and the Newsagency channel. Flow through investment…….nil. Urgency to act……non existent.
Im not sure what the cost of a full colour add on page 2 or 3 of a major metro Sunday newspaper is but Id suggest its not cheap. When I saw the double page full colour adds on page 2 and 3 of last weeks Sunday Herald Sun spruiking the News+ digital offer, it confirmed in my mind that News have abandoned print to wither on the vine, and all of the effort and investment is going into the digital side of the business. I mean they had the adds and marketing campaign up and executed within days of the announcement from the CEO.
Forget the rhetoric. The actions of News point clearly to the importance of the level of the Newsagency channel in the planning……and that is there is none.
Sadly I feel a Paul Howes moment coming on.
If I had a dollar for everytime I heard “News is working hard to…..”
or “we are conducting a review of blah blah blah” then I would have enough cash to buy the whole damn company.
However has Kim Williams as a home delivery customer should stop throwing his Age subscription 🙂
Just a thought but if News and Fairfax are on a money saving exercise how about stopping cheap subscriptions. eg Daily Tele 7 days retail is $10 yet you can subscibe for a home delivery for $6.95 how can this be sustainable in the long turn. Just let the Newsagent handle all subscriptions and we can determine quantities required for retail and delivery and what is an acceptable price for delivery, as every run will be different. Semi rural runs like mine travel lots klm with a lot less throws per klm’s than a city run.
i still don’t get why news has to set a delivery fee?? they don’t deliver it!!!! They can sell all the subscriptions they like but it would exclude the delivery fee, that’s up to me, because im the one that incurs the cost of delivery. What’s so hard about that???
The rest of the talk is basically crap to keep stringing us along until digital makes us pretty much redundant to them. They need to be very careful as I think there may be a big move against them before they are ready to ditch us. Don’t tell the ACCC but id join a group action to stop home delivery until they came to the negotiating table in good faith. But my stance is very clear, I don’t want to negotiate a new delivery fee, that’s not on the table, I will set my own fees.
The rumbles have been happening for a long time now. Newsagents have had enough of being told what to charge for a service that they are providing, News Ltd & Fairfax do not provide the delivery service – NEWSAGENTS DO! A run in metro has totally different costs to a rural or semi rural distribution area, but to News & Fairfax we are all the same. Its a no brainer that Newsagents should be setting their own delivery fees. Maybe its time for us to stand up for ourselves, no-one else is going to. A “No delivery day” would be a good start. I’m sure that a whole lot of us would be prepared to join the fight.
Annette, unfortunately I think a “no delivery day” would only hurt our customers, our staff and delivery agents that are already struggling.
I don’t know if you were affected last year when Fairfax had problems (about 3 days in total) when we didn’t receive any papers at all, but it was hell for all involved and there is no way I would want put any of us through that again.
Just set your own fees, it may or may not cause you any problems.
why not just charge what ever you want , a lot of us by the sounds of it do it already anyway . I have 3 or 4 direct customers that you cannot do anything about but the rest are all mine to do with as i please .
charge what it takes to make a profit there is no point in delivery papers for the fun of it at 3 in the morning.
the problem arises with subscriptions, has build in delivery fee. I already do set my own fees for normal home deliveries.
Newsagents in various states have state based forums through which they could seek a remedy to the situation relating to newspaper home delivery fees.
Mark, re post 25 ROFL !
Dave I was meaning external forums like CTTT, VCAT and Small Business Commissioners.
We just had another full fee customer taken off us by news ltd to go on a new subscription at 9c per day including delivery. How does this tie in to their statement of no longer subsidising loss making deliveries to country areas?
Where is the fairness of News Ltd saying they will charge more to stop losing money yet they refuse to let us charge more to stop losing money? It’s disgusting.
Jeff there is no fairness. Whay are you going to do about it?