I am concerned about reports of newsagent requests to hand back newspaper home delivery runs being blocked by a publisher. How can a publisher force a newsagent to continue offering a loss making service?
Publishers control most business levers in the newspaper home delivery service: cover price, the delivery fee charged by newsagents, additional revenue opportunities with the newspaper home delivery and cash flow. Publishers, on the other hand, make most of their money from advertising revenue.
I am aware of newsagents with runs which lose in excess of $200 a week. This is not a new problem. Indeed, publishers have been talking about this with newsagent associations for most of this decade. To date, there has been little real progress from a newsagent perspective.
I am guessing that publishers block the handing back of some runs because they do not want to carry the loss. Yes, let’s rely on the contract we have with these families and force them carry the loss. They did sign the contract after all.
For the health of newspaper home delivery, something must give – especially in regional areas where merging home delivery runs is not practical. One solutions which I put to publishers years ago is to ensure fair compensation for the service offered. Newspaper subscribers have shown that they are prepared to pay a higher price for the newspaper on their doorstep yet publishers refuse to permit newsagents to do this.
Blocking newsagents from charging a fair price for an excellent service is a factor in some good newsagents exiting our channel.
Unless the issue of fair compensation for newspaper home delivery is resolved in the next few months, the world’s best newspaper home delivery model will break up.
Politicians played a role in creating the current situation, maybe they could play a role in helping thousands of families across the country achieve an equitable outcome.