PMP, the owner of Gordon and Gotch, this morning announced to the ASX agreement with Bauer Media to distribute Bauer titles – subject to obligations Bauer has to consult with employees.
The PMP announcement is part of a planned move by Bauer Media to close their magazine distribution business Network Services in the coming months. Gordon and Gotch is taking on the distribution of Bauer Media titles and is expected to take on on many other titles currently distributed by Network Services.
The sky is not falling.
This is not a step closer to the end of print magazines.
Given the slim margins of magazine distribution and that Bauer is primarily a publisher in other marketplaces, the move makes sense.
The move should not alter the commitment of newsagents to magazines.
The closure of the Network business will most likely take some months. I expect it will be done in a structured way, taking into consideration all operational matters including returns processing and the handling of the bonds paid by newsagents and allowing the the complete handling of returns when due for Network titles in the system.
While newsagents may feel unsettled by the move, I do not. We will continue to have access to an excellent range of magazines as I expect many Network publishers to move to Gotch.
Take a moment to think about the publishers using Network, especially the small Australian publishers. Everyone working in these small publishing companies will feel disrupted by the move.
I urge newsagents to not change their behaviour because of the announcement. I urge you to NOT early return as doing this will only hurt the publishers of the products you early return.
Bauer Media is a massive business. There is no risk for newsagents. I am certain the structured closure of the business will be orderly and that newsagents will be respected. Bauer needs this for its future relationship with newsagents.
I anticipate a benefit for newsagents with one major distributor as one company will know the magazines newsagents are to receive whereas with two major distributors in would not know what the other was doing thereby making oversupply easier.
The pressure will be on Gotch to distribute in a sustainable way for newsagents, publishers and themselves. newsagents were not so much part of the equation previously because of there being the two major and competitive distributors. I hope it sees a stronger commitment from Goth to Australian titles and that these are distributed exclusively through our channel as we are the magazine specialists in Australia.
I also anticipate there to be a reconsideration of the magazine code of conduct that is currently under trial by the MPA with a small group of newsagents. I do think this move plays into some factors under consideration in the trial.
Interesting sentence in todays email from Bauer. “As this is simply a change of distribution service provider, your contract with Bauer Media will remain in place.” My interpretation of that is that Bauer has no intention of returning the newsagent bonds which they hold.
Steve, you didn’t read far enough.
“For newsagents with security deposits, this amount will be refunded in full along with any accrued interest. Bank guarantees and other financial guarantees will be released at the same time.”
Interesting development in the industry. Logically and assuming that G&G continues in the near term as the only major distributor, it will be much more straight forward for them to understand total supply and sales levels for all individual accounts and therefore better manage supply, thus avoiding oversupply and not burdening Newsagents’ cash flow with unnecessary stock levels.
Yeah, right!!
I just hope IPS do not gain any new accounts . There will be publishers out there that had previously left GG to move to NDC and now probably will not be happy about the move .
David
I admit I was wrong, I should read thing’s properly before I mouth off.
I have had better luck regulating my supply with G&G then Network.
Carol that is true and they are not as fussy when the receive the physical returns ,unlike NDC .
Just being able to courier my returns as one instead of split into 2 consignments for 2 distributors will save me about $300 a year, not to mention the time savings in processing returns as 1 without having to split them and then double check their in the right pile. Small things like that add up.
I was briefed on this in December and again following this through to the announcement earlier this month. For the record, there was no non disclosure agreement requested or signed. I have no idea what Bernie Zimmermann at POS Solutions is on about at his blog today.
Sad day for Gordon & Gotch returns warehouse in Noble Park. They are closing down & returns moving to Sydney