A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Print declining, online video soaring

Read this story from Editors weblog. It quotes Laurent Rich Fine, respected newspaper analyst at Merrill Lynch & Co. This story supports why I see newsagent revenue per home delivered product falling, why publishers want their products in as many retail outlets as possible and, why retail newsagents need to revisit capital investment in print media product. Here’s a taste of the article:

“Interest in news is greater today than it’s ever been,” said Fine. Yet newspaper companies shouldn’t cling to profit margins and models that don’t work anymore. “There’s no way to go back to where the industry has come from,” she added.

So don’t waste time in nostalgic reminiscence, especially as newspapers are experimenting with online features that are proving to draw readers and money.

Fine does believe that large newspapers will continue to strive, as well as local ones. “I think there’s an enormous, unsated appetite for really local news,” she said. Thus the overlying uncertainty concerns midsize metropolitan dailies.

According to her, newspapers can’t operate on the same business model, can’t expect similar profit margins, and should expect their print products to lose in importance.

Newsagents can’t operate on the same business model, can’t expect similar profit margins, and should expect print products to lose in importance.

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Media disruption

State by state differences in lottery offerings

How can it be that the state owned NSW Lotteries can offer lottery retailers free promotional product while Tattersalls in Victoria offers nothing?

In NSW on Feb. 23 and 24 if you buy a 30 game Megapick in draw 2671 you get eight standard Autopick games of Monday and Wednesday free. The seller gets commission on the paid for and free product.

This is a good deal for the consumer and for the lottery agent.

There are similar deals for Powerball, 6 from 38 Pools and instants.

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Lotteries

Comparing newsagencies by crossword titles

I have been working in six different newsagencies in the last few days on magazine layouts and related matters and have been surprised at the differences I am seeing. I expected four of the six newsagencies to have a demographic similar to that of my newsagency based on the ratio of sales of several niche categories to women’s weeklies. That anticipated similarity is not reflected in magazine range. In these four of the six they each had no more than six crossword titles on the shelves. Here’s our crossword category as photographed yesterday:

crosswords.JPG

Okay, we made a decision some time ago to use the crossword category to declare a point of difference. We did this because crossword customers are loyal to a retailer with a good range, they are regular and they buy other products. In fact, crossword titles are among the most efficient magazines – that is, sales with crossword titles have more items and are worth more based on the data I see.

So back to these other four newsagencies. With only a few titles on the shelf the crossword is not a section. You can barely find it. So, these newsagencies need to either get more stock or get out of the category. The challenge is that if they ask for more stock, what other supply situations are they likely to unlock for their businesses? There is huge mistrust among newsagents about the magazine supply model and no wonder based on common behaviour.

It’s easier and probably safer for the four to leave things as they are and concentrate of more successful categories – they are the low-hanging fruit magazine growth opportunities. Taking a tiny category in pursuit of growth takes capital, space and time – three things newsagents scrounge for.

The question I have is: how did this happen? In my mind every newsagency ought to have a strong crossword category because no other retailer will. It’s a significant point of difference we can embrace. So, how did the category fade and in how many stores?

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magazines

WSJ sets stories free

Stories want to be free. Free of newspapers, magazines and websites which restrict access. They want to spread virally and without shackles tying them to the publisher.

The people at Wall Street Journal have made it very easy to embed their video content in other sites such as this blog. Okay, they wrap their ads around the content but that’s okay if the story is worthwhile. Below is a story about online dating sites and social media in general.

Andy Plesser at Beet.tv had this to say about the WSJ move:

This is a very important development. As far as I know, no major newspaper publisher is allowing its videos to be shared this way. I know a big concern is having advertising surrounding the clips appear on sites outside of a media plan.

The WSJ move is clever because it sets their brand and content free while maintaining control over look and feel. It’s further evidence that the story is the thing. By setting stories free like this and enabling them to be shared so freely, WSJ is acknowledging that stories have their own life outside of the newspaper, magazine or website.

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Media disruption

Free magazine receipt pitch

This is the other receipt coupon we’re about to try. This one will print on all other receipts. It promotes our magazine club card and pitches the proposition of a free magazine.

mag-card-receipt.JPG

The beauty of receipt promotions is that they turn a business document into a marketing tool. For Tower Newsagents wanting to use this facility please see Advice Sheet #42.

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magazines

Receipt marketing at point of sale

How’s this for cool receipt marketing? The customer buys printer ink and an offer prints automatically with their receipt. The discount is effectively on the third item purchased. We’re not sure if we will run with 25% or a bit less – we’re still working on that. While we have done receipt marketing before, we are now targeting more carefully. For us it’s free ad real-estate.

receipt.JPG

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marketing

Dumbo Feather, pass…

Dumbo Feather is the kind of title I like to carry as an example of the point of difference between my newsagency and other magazine outlets like supermarkets and the like.  It appeals to a certain cconsumer, one which is hard to attract and maintain in this marketplace.  I like the title a lot.

The challenge for the title is the long on-sale.  For a niche title not easily displayed and located, this is a big challenge indeed.If the publisher wants Dumbo Feather to remain on the maybe they could consider delayed billing and/or funding newsagent costs – but they’re a small operation and unlikely to be able to afford this.

Magazine distributors would know that to continue to distribute a long shelf-life and expensive title which achieves a sub-50% sell through rate to newsagents is unfair because they are guaranteed to be loss making. As newsagents become smarter at identifying these loss making titles, Dumbo Feather and similar titles will be under more pressure.

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magazines

English garden magazines not drought friendly

eng-garden.JPGThere’s something almost offensive about English garden magazines being sold in Australia in the middle of a severe drought. While the magazines are excellent quality, they are pitching a gardener’s dream which is unattainable here. But then so do fashion magazines I guess. And there is nothing wrong with looking. Right now I’d prefer top see more garden titles which are relevant to local circumstances. Australians like to support causes and there’s an opportunity to make sustainable gardening a cause.

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magazines

Web 2.0: teaching the machine, us

If you are wondering what Web 2.0 is or can be and where you sit or may sit within it, a video by Michael Wesch, Assistant Professor of Cultural Anthropology at Kansas State University, is a must see. In a few minutes Wesch takes the viewer further than a two hour powerpoint driven presentation ever could.

Source: Neil Sanderson.

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Media disruption

Newsagent unity offer

The state newsagent associations in New South Wales and Queensland have written to the national ANF with a proposal aimed at resolving the current disunity which is weakening newsagent representation to suppliers and government.

Both sides have faults and both sides need to give some so that newsagents, the only stakeholders who matter in this bitter dispute, benefit from robust, independent and transparent representation.

As I understand it, the ANF has not yet responded to the letter which was sent almost three weeks ago.

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Newsagency challenges

Online classifieds pitch on campus

Here’s the poster for a university campaign we launch for our online classified site, Find It, this week.

sell_your.JPG

We’re looking to connect with people who would use eBay – the Find It pitch is that we’re free. Even when we do charge our prices will be a fraction of the eBay fees and Find It profits stay in Australia.

Newsagents can sign up for free to partner with Find It nd therefore access profit share.

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Online classifieds

PDF magazines take off

pdf-mags.com provides links to pdf (design and art mainly) magazines available online and not in retail. It’s a great resource for designers. In retail, this category is delivering falling sales and it’s understandable. With so many free and low cost online titles now available and the image quality so good, why buy a print edition?

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magazines

Newsagents and the Fairfax half yearly results

Why newsagents need to cut home delivery costs and look for new revenue opportunities.

I’ve had some time to digest the Fairfax half yearly results and comments by some reading this site and what the share some more observations.

Fairfax interests me because it is Australia’s largest locally owned newspaper publisher; their deliberations from recent years have been exposed through the recent book by former CEO Fred Hilmer; and, because of their considerable success at monetising their brand online.

THE AGE
Circulation Monday to Friday is up 4.5%; Saturday down 3% and Sunday up 11%. Circulation income is up 0.3% – interesting compared to the circulation numbers. I’ve mentioned problems with Saturday sales here before for The Age and the Sydney Morning Herald. Over the counter feedback is that the papers are too big for what people want in a weekend paper now. But I’m sure Fairfax have their own more scientific research on this. Whatever the reason, action is needed.

The difference in circulation revenue compared to actual circulation supports my concerns for newsagents who provide home delivery services. The pressure will be on them to take a ‘pay’ cut and deliver for less. They can’t afford to do this yet can’t afford not to, so they will – an economic consequence for newsagents of deregulation

DIGITAL
Revenue is up 43.7% and profit up 41.8%. Take a look at Digital profit contribution over the last three years

While these are exceptional numbers, they are not sufficient to replace the loss of advertising revenue if newspaper sales and ad revenue fall as has happened in the US. Their decision to promote more aggressively into other markets such as Adelaide where they do not publish a daily should boost revenue.

The pressure old media companies such as Fairfax is under was the subject of this story in The Australia last Thursday.

MASTHEAD VALUE
For months I have complained here about Fairfax newspapers, specifically The Age and the Sydney Morning Herald, abusing their masthead with post-it style stuck on ads. The accounts report intangibles representing 123% of net assets. Most of this would be mastheads. So, why what an ad on top of the masthead? The longer term damage is not worth the short-lived thrill from ad revenue.

I am sure that the half year results unlock more valuable information than I have covered here.

Key messages for newsagents are that Fairfax is pushing hard to replace old (newspaper) revenue with new (online) revenue and that while they do this they will be looking to cut costs associated with old media products. Newsagents need to make similar adjustments in their businesses.

It bothers me that newsagents are not being fed current information about these challenges.

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Newsagency challenges

SA Life magazine makes newsagents happy

sa-life.JPGI’m in Adelaide and every newsagent I visit here tells me that SA Life is the best magazine they have. Since it’s launch, sales have been strong, especially in more affluent demographics. Here’s a locally published magazine aimed only at the local market and it’s outselling all other monthlies. Mention SA Life and newsagents here smile: great sales, good cover price and, most important, local. Parochial sells.

SA Life (distributed by NDD) is a great story beyond its own success in some newsagencies where they use the title as a ‘magnet’ to draw attention to other titles and try and grow the category.

Even though it’s not national, its stellar success demands SA Life is considered for the newsagent voted magazine of the year awards.

UPDATE 17/2: SA Life has two sister publications: Highlife Magazine in Bowral, NSW, and, Tasmanian Life.

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magazines

jmag music magazine goes monthly

jmag.JPGI’m surprised that jmag is going monthly. The music category is as challenged in the magazine space as it is for over the counter CDs. Music retailers are scrambling to find products to cover the collapse of CDs. In the magazine space, general titles (Rolling Stone, Q, MoJo and Uncut) sales are down while some specialist titles are holding stead. The challenge of the re-launch for newsagents is making a noise in a stale category for such a launch – we’ll have to reconfigure to re-attract people to that space. Of course, the re-launch may product a title with a broader base than at present and that would be welcome.

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magazines

Classified ad syndication

Over of the side ==> we’ve added a syndication box providing access from here to Find It online classified ads. From the Find It site itself we’ve made syndication very easy. It’s the same for finding newsagents – allowing access from any site which wants to trawl our database.

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Uncategorized

Are newsagents apathetic about the future?

Supermarkets could wrest instant lottery products from apathetic newsagents.

As I’ve written here recently Victorian newsagents risk losing scratch ticket product if Greek company Intralot is successful in the bid they have before the State Government of Victoria. Intralot has said that they plan to sell instant games through supermarkets if successful.

In the absence of any apparent prctical activity by newsagent and lottery associations I created a petition. The Victorian newsagent association, VANA, belatedly endorsed the petition and asked its members to get behind it. So far 154 have signed the petition – the majority are not newsagents. I know of 20 newsagents who are collecting signatures over the counter.

This is a pathetic response by newsagents. Talk to the industry associations and they will tell you it’s normal – newsagents rarely respond in a practical way on issues which affect them.

Newsagents will scream if/when Coles and Safeway get instant scratch tickets at the counter. By then it will be too late but they will scream and blame everyone but themselves for the loss of instant lottery product.

Now is the time to act on this matter. The petition is designed to create noise to enable representations to the Government and raise awareness on the issue. Other action is necessary if newsagents are to ensure that instant lottery product remains with small business. There should be letters to local members, flyers handed out to customers and, maybe, a protest rally on the steps of parliament.

If newsagents want to stop Coles and Safeway getting 10% of their lottery sales they need to act now.

Maybe I shouldn’t whinge about newsagents – they’re important to my business and I shouldn’t get them offside. I’ve worked with them for twenty-six years, I care about them. I care about their investment, their work ethic and what they get through day in day out. Their lack of entrepreneurial spirit is frustrating as is their victim mentality when issues like Intralot come along.

The Intralot fight is one of several newsagents ought to be politically active on. No one will take their case on for them. It’s up to every newsagent to engage for their business and for the channel as a whole. Either that or roll over and die.

My answer to the question in the headline – yes.

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Newsagency challenges

Alpha drops curves for sports

alpha-mar07.JPGBlokes will be happy to see the cover of Alpha is back to its very successful roots with the latest issue. Even though last month’s curvey issue sold well, there were enough comments to suggest guys prefer a sports magazine which looks like a sports magazine.

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magazines

Water saving tips for gardeners

water-wise.jpgGardening Australia has a great and practical feature in its latest issue (out yesterday) on water saving tips so we’ve done this display next to our busiest register. It more titles arrive with water saving tips we’ll add them to the display.

We are thinking of finding space in-store for people to add water saving tips of their own – to make for a more interactive experience with the title and our shop. That’s a project for another day.

I went to the Gardening Australia website expecting to find this opportunity but instead it’s a pretty static ad with no reader interaction. Disappointing, but the magazine rocks!

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magazines

Anna Nicole not big news in Oz

NW and Famous have Anna Nicole Smith cover stories this week and sales are average. Given the TV and newspaper coverage I expected to see spikes for both titles but it’s not happening. It could have something to do with the nature of the story – it is changing so fast that consumers know that the magazine stories will be out of date already. I am surprised that neither title has updated the story on their website since Feb. 9.

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magazines

IDG shifts focus to online

To drive this change and to focus on online revenue we’ve changed the business mission of our organization away from print. Going forward IDG Communications will define itself as a web centric information company complemented by expos, events and print publications.

This is from a blog blog post by Colin Crawford, Senior Vice President of Online at IDG Publications. It’s a post everyone involved in publishing from editorial through to newsagents ought to read. He steps us through why they have adjusted their mission, shifting focus to online first.

In the US, our online revenue now accounts for over 35% of our total US publishing revenues. Next year, for many brands online revenues will be greater than print revenues, if fact they already are at some of our key brands and by 2009 – approximately 50% of IDG’s US revenues will come from online.

Crawford writes positively about the opportunity of online for the publications in the IDG stable. IT titles are experiencing double-digit sales falls at retail. Consumers are showing from their retail and online behaviour how they want to access IT news and information. IDG saw that and adjusted their mission accordingly.

Unfortunately some publishers are not acting like IDG. Newsagents continue to receive IT titles in quantities as if there has been no downturn. Magazine distributors have an obligation to pull back on these titles regardless of the money they make from the distribution process.

For their part, newsagents need to learn from the IDG approach and adjust their mission to reflect the changing marketplace. This means reducing magazine display space, cutting dead titles and moving into new product categories which drive traffic and sales.

More good writing on this topic:
Louis Gray.
Jeff Jarvis at BuzzMachine.
Juha Saarinen.

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magazines

Boring lottery marketing

Wanted: Division 1 Winner. Apply Within.

I have seen a sign with this text in at least ten newsagent windows in the last week. It’s usually printed in black on colour paper and laminated. No sales pitch, no connection with the dream other than some lame text.

This is very poor marketing and I doubt it generates any interest. I suspect the newsagents are all being trained or motivated by the same person or organisation.

Lottery products need to be marketed with flair and in a way which connects with aspirations. We use in house syndicate posters, self made t-shirts, mock-ups of oversize cheques from past winnings and bright balloon arch displays to have fun and draw attention to the lottery offering. Others are brilliant at newsletters to customers in their area. Others do great themed window displays. These are all low cost high energy marketing ideas – far better than a boring old window sign from the 1960s.

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Lotteries

Calendar offering unlocks better returns for newsagents

calendarXpress offers individual newsagents a competitive edge.

I often write here about the need for newsagents to pursue new traffic generators and basket builders for their businesses. One such area is calendars. While newsagents carry calendars now they are either from magazine distributors on poor terms or from other suppliers on terms which are not as competitive as they could be.

Through the newsXpress group we have put together a compelling calendar offer for any newsagent – not just newsXpress members. The enquiry form can be downloaded here.

Late last year we embraced calendarXpress ranging guidelines in my shop and achieved an excellent return – far better than we achieved the year earlier when we went it alone. It’s having access to smart category management resources which delivered success for us. Achieving a better return from a traditional newsagent range is what our channel needs to do.

Below is a flyer sent by fax to newsagents promoting the calendarXpress offering.

cx-flyer.jpg

calendarXpress unlocks better margins and a better range of calendars for newsagents.

DISCLOSURE: I am a shareholder in newsXpress Pty Ltd, the company behind calendarXpress.

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Calendars

Drowing in magazines

kitch-mag.JPGWe’re drowning in Kitchen magazines with six current titles. This title came in today and the distributor, NDD, expects us to hold the stock for a year. Considering the sell price, the cost of the real-estate and our sales history for the title, it’s yet another magazine from NDD on which we will lose money. Newsagents need a central authority approving access to our retail network for titles. Without this we will continue to be over serviced in categories such as kitchens. This is draining millions of dollars from our businesses.

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magazines