On the issue of newsagents achieving better margin on magazines, I appreciate there are some newsagents who think there is no hope, that things will never change. I’m an optimist and think that there are enough magazine publishers who value the role we play in putting their titles in front of new eyeballs for them to want / need to engage with us in a discussion about viability.
With the majority of newsagents losing money on magazines something has to change.
There is no doubt that the current model, as I wrote earlier this week, is not financially viable for newsagents, especially those paying shopping mall rent of $1,250 per square meter a year and more. Even allowing the traffic magazines generate there is a live question about viability. That question goes to the future of the channel as it is seen today.
One alternative is that magazine publishers pursue alternative channels. No single channel can be as valuable as the newsagency channel. We’re known and, for the most part, engaged. We are also well located and locally connected.
The other alternative is they sell more through other channels they have already such as supermarkets, convenience and petrol. But these channels have space challenges and engagement costs.
I think the newsagency channel continues to be the most economically viable for magazine publishers, even at a higher margin for newsagents of, say, 40%.
I am confident that with as higher margin we as a channel would see magazines differently and engage with them as something as more valuable than agency business.
Newsagents are challenged by disorganisation and lack of national leadership. While the ANF directors and staff will say they provide good leadership, the proof they do not is lack of engagement by newsagents. Leaders have followers. The ANF has failed newsagents on matters like magazines and spent too much time on questionable commercial offers.
But back to my topic – what if publishers do not engage and provide newsagents with better margin, what then? The obvious option is to get out of magazines. Do you have the guts to do that, to quit magazines? Think about it, look at your data, what would your business look like.
Another option is to quit one of the major distributors in return for the other major distributor offering better terms. This could work if the better terms are seriously good and if they included control over stock received. Imaging the seismic shift in distributor use if this happened and newsagents started carrying titles from only one distributor.
Another option is to keep cutting range. The problem with that is that you no longer satisfy browser interest and you lose that traffic and that plays out into declines in other categories.
The fourth option is that you say bugger it yes we are treated poorly but I will prey on other newsagents cutting their magazines ranges and increase mine and become the go to newsagent for magazines. This is an interesting option, making your shop mor of a destination. But you are stuck, probably with the current terms.
There are other options too. Newsagents need to think about this, they need to explore what they could do and would do if they do not achieve more equitable terms for magazines.
To the magazine publishers reading this – take the concern seriously. The current arrangements cannot continue.
A survey of 163 newsagents last week through this blog elected a result of 85.89% of respondents indicating that they would hire more staff if weekend penalty rates were eliminated. While the sample size is small, I am confident that a more comprehensive study would reveal a similar result.
83.33% of newsagents responding to the survey said they would work less hours themselves. I am surprised at this – I expected a lower percentage, maybe half the result. If this happened,if newsagents worked less, imagine the improvement in their quality of life and that of their families. What a terrific outcome!
144 of the respondents said they had discussed the topic with their employees. This is terrific. Of those who had discussed the topic with employees, 65.97% said their employees had indicated they would be happy to continue working for the business if weekend penalty rates were cut. This is a good number.
