While I accept subscriptions are important to the sale and distribution mix of magazine publishers, sometimes they go too far, abusing our low cost retail channel for completely selfish gains. Take the latest issue of Men’s Muscle & Health. The issue has a card inserted which partially covers the title in the pocket behind. On this car they pitch a subscriptions deal and a digital product which I suspect is their long term game. Either way, it’s not a card I’d leave in the magazine if I had it on the shelves.
I find it so wrong that the publishers expect the newsagency to sell their product then try to take away the business by offering subscriptions in the magazine!!!! They are effectively using the newsagencies as their avenue to promote subscriptions….so wrong…
David I understand the role subscriptions play and that they are not a major part of sales for many titles. There are some titles, though, where this is not the case and we are utterly disrespected.
Mark if they were not a big part of sales then why is there websites such as iSubscribe which offer massive discounts beyond the commission levels newsagents receive?
It is naive to think that newsagents do not fund a magazines ability to discount so heavily it’s subscriptions through a third party.
Newsagents do this by accepting 25% commission.
If WHO magazine can offer subscriptions through a third party website for over 60% off the retail price, then quite simply newsagents are being ripped off.
Accepting 25% these days is outrageous.
Amanda I agree 25% is inadequate. The challenge is that it’s a similar percentage for retail around the world. The low margin in part reflects the costs of the retail channel to publishers.
A couple of years ago I drilled down into the subscription issue with several Australian magazine publishers and they each said subscriptions accounted for less than a quarter of sales.
Maybe I am naive but I do not think what we do funds subscription offers.
We need to watch the space and factor it into our own planning around our businesses.
The bigger challenge to us is growth in sales in other retail channels.
“Accepting 25% these days is outrageous”
Yes it is.
Bauer, Gotch and Publishers are milking the Newsagency channel for all it’s worth and while they still can. Once WW, Coles, P&C’s etc reverse the 60/40% position where Newsagents currently hold the upper hand, then it will be pretty much game over for major distributors and a lot of Publishers as the controlling duopoly and others do what they have always done, to suppliers, when they have the upper hand.
So this short-sighted strategy by the major distributors of favourable treatment to the duopoly is not really doing the job of looking after their shareholders as they think it is.
A better long term strategy would be to look after the channel that clearly gives Publishers and the major distributors a better go.
So how do they look after that channel, well 12.50% for Distribution Newsagents doesn’t cut it. If wages are being paid, there is no profit in it. No amount of tinkering around the edges (eg 3 delivery days to 2) makes enough difference in respect of sustainability.
The minimum for Distribution Newsagents needs to be 20% as I see it. How long has it been 12.5% ffs.
A newsagent (25+ years) said to me the other day that National Newsagent has had the same stories about the major distributors ever since he started and nothing much ever changes.
In terms of Industry Association relevance that Mark mentions in numerous posts, I agree with what he says.
In addition, my own take on it is the Newsagency channel seems to have been forever supporting a never-ending supply of well-meaning Association people who have the same story to tell. This story is repeated over and over again by the new folks who jump on this wagon. So the people churn over, but the story always remains the same. The fact that they continue to survive with the same in-effectual story truly amazes me.
So to be balanced, over the years, there have clearly been advances made in efficiencies by tinkering around the edges, but it’s simply not enough.
“quite simply newsagents are being ripped off” yes they are and there are enough examples about that tell us there is room for a margin increase.
I don’t think the major distributors movers and shakers, nor Publishers realise the precarious position they have placed themselves in by allowing WW/Coles to dictate terms.