From Mediaweek today, Are Media CEO Brendan Hill on a move that will harm newsagents.
Hill revealed that the business has been working on expanding its retail partnerships. “We have just done a deal with Australia Post to trial magazines after all the foot traffic increase from people picking up parcels. We have also done a deal with Aldi to sell the kids’ magazine Bluey. It’s the first time Aldi has sold a magazine and hopefully it might be the start of further opportunities with them.”
Here’s what we know, magazine sales are in decline. While there was a Covid bump, it is shown to be over in states where there are minimal movement restrictions. Last year, unit sales of magazines over the counter in newsagencies were down around 12%. We know from Ovato’s annual report that the decline was considerable across all magazine retailers.
Outside of Covid, based on current basket data, magazine sales will decline this year too.
Newsagents were essential, remained open all through, serving magazine customers and publishers. Many remained open and losing money. The timing of Are Media bringing on yet more retail outlets is disappointing.
Newsagents have put up with years of minimal change to magazine cover prices, meaning that the real GP contribution from magazines has been falling even more than the decline in unit sales.
But that has not stopped the experts at Are Media from thinking magazines should be in more locations. This is a move that will harm newsagents no matter how the Are Media people try and spin it. It does not make sense to me.
Thanks for supporting local small business retailers in Australia Are Media!
Now we know where we stand.
Is it reasonable to wonder if the Australia Post move is the company considering a move away from our channel. I ask because we know that magazine distributor Ovato wants fewer accounts, not more.
Well surprise surprise. Newsagents have been screwed over by a magazine publisher. That’s a first. Nice one Are Media / Bauer / ACP. Some things never change.
Wow Mercury think there on a winner with Brendon
I don’t know why, but it never ceases to amaze me how these execs think that by diluting the sales per outlet on a low margin product is going to save them. Once AP work out they cannot make money from these titles ARE will get the boot from there as well. In the meantime they just alienate their most valuable, and most disrespected, route to market and more and more of us will continue to cut back on, or get rid of, magazines.
In my view, they are on the highway to oblivion, and all they have done is press the accelerator down just a bit harder.
Peak fuckedness here from Are Bauer. They are shitting on newsagents and I bet we complain a bit and then keep stocking their magazines.
Death by a thousand cuts.