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

Author: Mark Fletcher

Magazine brands driving consumers online

Magazine publishers are building extraordinary online traffic for established print brands.

Last year the Magazine Publishers of America published the Top 10 Websites Associated with Magazine Brands as collated by the Media Industry Newsletter. The growth experienced by some of these magazine websites is extraordinary. Take Vanity Fair – pageviews up 64% November 2006 over October 2006; unique visitors up by 65%. That’s extraordinary growth. Other magazines are experiencing similar: Premiere; Popular Science; Time; In Style; Men’s Health.

What’s interesting yet not unexpected is that many of the titles experiencing extraordinary growth in online traffic are experiencing flat or falling sales over the retail counter. Take Popular Science: 1,055,038 unique visitors. Great online growth while at retail the science category in retail is falling – down more than 10% in 2006.

Magazines are not dead. Many titles are using their online presence to stay in touch with readers as well as attract people new to the brand. Some categories are fading and the retailer challenge is to balance real-estate up to reflect this.

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magazines

Newspaper ditches newsprint

Wired has the story. Okay, it’s a small circulation title with legal listings. That does not diminish the significance of the move.

I first read this story about Sweden’s Post-och Inrikes Tidningar somewhere else last month and thought it was not worth blogging about. Then, today, I heard Cemeron Reilly of the Podcast Network and James Farmer, the online Community Editor for The Age debating the role of ‘citizen media with Jon Faine on ABC local radio in Melbourne. Farmer was talking down the impact of online on mainstream media. Reilly batted well for the disruptors. Farmer would have us believe that most blogs are a waste of time and irrelevant. Traffic says otherwise. Feedback at blogs says otherwise. Blogs provide a better opportunity for transparent democracy than mainstream media could ever offer.

Mainstream media has lost its monopoly on access to the masses and it’s struggling to come to grips with that.

How we consume media is changing. In a small way I’m covering some the change in this blog – in the context of change impacting Australian newsagencies. There is no point resisting such inevitable and good-for-the-community change. Indeed, we ought to embrace it. The challenge is how we in small business deal with this when our suppliers do not adjust their behaviour.

Take computer magazines. Sales in the category are in free-fall. The top selling titles are doing okay but outside these five or six titles, everything else is in trouble. Newsagents are still being supplied at quantities reminiscent of the halcyon days. This is sucking their businesses of cash. Fixing the problem is taking newsagents away from adjusting their businesses elsewhere to address the challenge of consumers accessing online what they used to buy in a newsagency.

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Newsagency challenges

Free WiFi at the newsagency

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We have changed approach to offering free WiFi in our newsagency, using now the calmer blue posters to skirt our main display window. The original posters were getting lost in the visual noise of the shop. Plus we felt that WiFi users are more likely to be people outside the shop than inside. These window posters are generating queries and that’s great.

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Web 2.0

Windows Vista titles slow to market

The launch of Windows Vista is not as well supported by magazine publishers as previous Microsoft Windows upgrades.

As of today, Australian newsstands have one dedicated Windows Vista title plus APC and PC Authority with good Windows Vista coverage.

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This lack of Vista product may be sue to delays in local distribution of overseas titles or due to the decline in the computer title category in favor of accessing more timely information online. If Vista rolls out like iTunes titles, we will have three or four in the next few months – too late to capitalize on the considerable interest today.

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magazines

Newspaper home delivery costs

In the 1990s Australian newsagents made, on average, 26% of the cover price per home delivered newspaper. This includes delivery fees. Today, based on data from a sample of newsagents in four states, the average gross profit has fallen to 21%. This has come about because home delivery relationships have moved from being between newsagent and consumer to publisher and consumer with the newsagent a hired delivery service provider.

While some newsagents have altered their businesses to cope with the revenue squeeze, many have not. In one state we are seeing GP as low as 11% on some newspaper offers. This does not cover the costs of managing, wrapping and delivering the product. There is no doubt that GP per titles delivered will fall further this year.

In a flat (decaying?) market, GP and therefore cost pressure will increase significantly. One way newsagents can make the relationship more profitable is to take it beyond newspaper home delivery. Successful newsagents regularly market to their home delivery customers and through this achieve good stationery and other sales; they are visible in providing the service – well branded vehicles and employees; they promote to acquire their own home delivery customers outside of what the publishers do; they focus on their own costs. Unsuccessful newsagents deliver the newspaper and that’s it. This is where decay in newspaper sales will hit the hardest.

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Newspapers

Ralph display causes a stir

ralph-feb07.JPGNewsagents across the country have setup feature displays for the latest issue of Ralph magazine as part of their commitment to in store promotions. Our display has offended some customers. If any more complain we’ll take it down. While we need to promote the diverse range of titles we carry, there is no point in getting our most regular and valuable customers, women 35 and older, offside. Part of the problem for us is that our feature display areas are right next to our women’s magazine area.

I was talking to the owner of a petrol outlet and asked why they don’t do displays like this. His answer was blunt: what and upset half my customers? No way. I suspect that the newsagent displays will hel;p boost sales in these non compliant petrol outlets.

I want to promote Ralph and other men’s titles – I’ll find a better wan to do this without our core customers.

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magazines

Shuffling magazines

As part of the magazine shuffle I blogged about yesterday was the move of Notebook and Real Living from the interiors area to the high traffic women’s area. These are hard titles to locate. Their covers suggest interiors but inside they cover a broad area. They are like several other new and refreshed titles which cross segments and make placement challenging.

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We’re not sure that this is the right location – only time and data will tell us if the move is right. The challenge is where do they belong if not here?

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magazines

Health magazines given greater prominence in layout change

Sales of health magazines are booming, growing more than 10% in 2006 compared to overall magazine category growth of just under 4%.

Responding to this growth and the opportunity of several new titles, we have broken with traditional newsagent magazine layout thinking and moved the Health category to better real-estate.

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Our health titles used to be wedged between wedding and children’s titles. Now they are located near the top of our busiest magazine aisle and next to the popular food section. The move helped us address a location dilemma – the placement of food titles which focus on health such as the Better Homes Diabetic Living.

A side benefit of the move is people finding new titles when they get to an area their favorite titles used to be. Given the frequency of customer visits many become store blind so changes in magazine locations can boost sales.

Newsagents tend to see magazines as set and forget products. In some respects, with 1,300+ titles in stock, moving categories can be too daunting to contemplate. Our simple move took two hours of researching and planning and another hour and a half to execute. It was like playing a puzzle game, moving block by block and sometimes going backward until the goal was achieved.

The move is less than a week old so it is too early to assess any impact. We’ll measure carefully and adjust as guided by sales data.

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magazines

Maxim launches Monkey – the world’s first weekly digital men’s mag

The World’s first weekly digital men’s magazine has arrived and it’s 100% FREE forever! Yes! Give us your email address and every Wednesday you’ll get a link to the latest issue of Monkey. It’s honestly the best way to break the back of your week!

That’s the pitch at the Monkey website. Monkey is from the UK publisher of Maxim. I signed up and checked out a copy online – the product looks well targeted. I bet it’s a success. Curiously there was no age check to access what some would consider soft porn.

The publisher has opted to replicate the print experience at the moment. I’d expect this to change with time given the facilities available online.

I bet the readers of Australia’s now defunct Explode magazine find their way to Monkey.

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Media disruption

Blogging for David Hicks

I am ashamed that my country is prepared to sit on its hands as the justice we claim to crave and fight for is trampled and human rights are ignored.

I don’t know what David Hicks did, if anything. I do know that he has been held prisoner and denied justice for more than five years. I also know that our Federal Government has seemed disinterested in pursuing justice for one of its citizens. The government’s inaction and ignorance on David Hicks’ situation appalls me.

We know from the prosecution that Hicks never shot or threatened anyone yet we there cases in Australia where someone is convicted of far worse and released from jail after two or three years. Our politicians have become paralysed by American insecurities. We have been caught in the web of fear which has, of itself, made America weaker.

It is time for Australia to stand up for itself and for one of its own.

I hope that this blog entry in some small way adds to the voice online about the injustice meted out against David Hicks at Guantanamo Bay every day. It joins 680,000 Google references to David Hicks.

Bring him home.

Resources:
Wikipedia
Fair Go For David
The President Versus David Hicks
David Hicks campaign site
Latest coverage from The Age newspaper
Michelle Grattan commentary

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Uncategorized

Howard Government small business scandal

Four months ago I wrote to Senator Coonan, Minister for Communications (Minister responsible for Australia Post) presenting evidence which I claim shows Australia Post breaching the Act under which it operates. I’m still waiting for a reply. Well, I have received a reply but when you lay it next to my letter it does not address even remotely any of my concerns. It’s an off the shelf document right out of Yes Minister. The Minister’s office promised in a letter six weeks ago that I would receive a reply. So far, nothing. In the meantime Australia Post pursues newsagents and other small businesses relentlessly through its government owned stores.

Tired of waiting to hear from the Minister, I sent this letter yesterday. Here’s one paragraph from the letter which sums up my position:

In that past, correspondence from your office and others in the Federal Government shows you hiding behind the Act. If you are right and the Act permits Australia Post to sell non postal related items in greater numbers, the Act must be changed. A government established and owned enterprise with monopoly core products and services such as Australia Post ought not be permitted to use its monopoly supported brand to compete against small businesses, especially when the government has stripped those small businesses of any monopoly products and services they had.

The treatment of newsagents by the Howard Government is a scandal. That the government profits through its protected 863 retail stores competing with newsagents ought to shame it. Without media coverage, people won’t know the harm being done to small business.

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Australia Post

Kmart closes, customer traffic falls

kmart-closed.JPGKmart has been a key traffic generator for all the businesses on level 2 at Forest Hill Chase for 18 years. It’s closure on Jan. 31 has delivered an immediate drop in traffic past our door. It is too early to assess the sales impact. It will be at least 9 months before a new Target opens.

We knew the Kmart closure was coming but have felt somewhat paralysed as to what to do in advance. Only time will reveal the impact. In the meantime, it is driving us to work harder on the business, ensuring that our offering is the best it can be and that we’re driving good word of mouth.

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Newsagency challenges

Lottery petition draws early success

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Our petition has been out for less that a day and customers are registering their opposition to any move by the State Government which would see scratch ticket lottery products available in supermarkets such as Coles and Safeway / Woolworths. They are also writing comments which make it clear they think that the two major supermarket companies have too much power.

We’re not promoting the petition – it’s on a clipboard on the counter without any other material – making this early response most encouraging.

Here is the petition people are putting their name to:

We, the undersigned, are concerned citizens who urge the State Government of Victoria to ensure that lottery ticket and scratchie games are sold only in independent small businesses in Victoria to protect jobs.

The Bracks Labor Government and Intralot would do well to consult Victorians before they seal a deal to put scratch ticket lottery products in supermarkets.

Name and address details have been covered for privacy reasons.

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Lotteries

Managing history at Fairfax

Interesting to see the public gnashing of teeth by here and here Fairfax over Fred Hilmer’s book about his time as CEO of the publisher. While these attempts to control history may be important to the players, they weaken the public perception of Fairfax which ought only focus on today’s proposition and not yesterday’s opportunities.

Newsagents today are missing opportunities as Hilmer did in his time as CEO of Fairfax. While there is considerable activity impacting the core products on which newsagents rely, they (we) are not sufficiently engaged about their future. Opportunities abound for bright lateral thinkers to reinvent the newsagent offering. This is one reason I thing newsagent businesses will continue to sell – to those who will drive consolidation and evolution.

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Media disruption

Time makes a move

Time Inc. has announced That its Sports Illustrated Group has signed an agreement to buy sports enthusiast Web site FanNation.com. Read more at MediaPost. Watch for more moves by magazine publishers connecting their established print brands with high traffic online brands through acquisition. Such acquisitions have been very successful for newspaper companies in the last two years.

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Media disruption

Great Valentine’s Day display

This is the window display at my local chocolate shop. It’s inspirational – the photo does not do it justice.

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Newsagencies take on a new excitement over the next two weeks as love comes to town. Many do amazing displays like this chocolate shop in Brighton and sell plenty of cards, plush, chocolates and other gifts. Valentine’s Day is a great opportunity to relax and enjoy retailing.

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Uncategorized

Steve Irwin tribute title attracts strong interest

steveirwin.JPGThis display by Jane and the team at our shop is drawing good interest from people looking for a keepsake tribute to Steve Irwin.

We will use this opportunity to remind people of his Wildlife Warriors legacy and how people can support their work.

I’m often critical of one off titles but not this time. This tribute is timely and connects well with the community.

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magazines

And the winner is…

NDD is the worst magazine distributor from a newsagent cash flow perspective according to the 2006 magazine sell through rate data I have sitting on my desk. I’ve been trawling through this data from many newsagencies seeking a fair and accurate subset to share with the Australian Newsagents Federation for use in their representations to government and for another project within my software company. Across the board in 2006, NDD magazine sell through rates were lower than those for Network and Gotch. This means that NDD is tying up more newsagent cash as a percentage of its total newsagent billings than any other company.

In most newsagencies I have data for, the NDD sell through rate is below 50% for the whole year across all categories. This is unacceptable for a company with exceptional IT systems and a wealth of sales data from newsagents which can guide it to provide more equitable scale out to newsagents.

NDD clearly does not respect the newsagent channel otherwise it’s sell through rate average would be significantly better.

To the NDD folk reading this and angry at what you will again claim is my ‘bashing’ of NDD. Treat newsagents with commercial respect and you won’t be embarrassed by the harm you are doing to the small business newsagency channel.

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magazines

Petition to protect small business and stop Intralot

I have created a petition for Victorian newsagents wanting to collect expressions of support from their customers for submission to the Bracks Labor Government while it considers whether to award a lottery licence to the Greek Intralot company. Waiting until a decision is announced by the government is too late. Newsagents concerned that Coles and Safeway / Woolworths may get scratch ticket product need to act now.

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Lotteries

Brisbane getting a free daily newspaper

My understanding is that News Ltd is to launch a Brisbane edition of their popular MX free daily. MX is a good product as it’s better than expected success in Melbourne and Sydney attests. I understand the importance of free dailies to publishers. My only hope is that they do not leave their current focus on major city transit locations and start to locate product in retail channels. This would hurt newsagents.

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Newspaper marketing

Intralot Supermarket scratch ticket push a done deal?

Following my post yesterday about Intralot chasing a licence to sell scratch tickets lottery games in Victoria, I received an anonymous call from a silent number claiming the decision was made by the Victorian Government and that Coles and Safeway will have scratch tickets available at their checkout by Christmas.

While I don’t know if the rumor is true, research online confirms Intralot’s plans for placing scratch ticket products in supermarkets in Victoria.

Coles and Safeway are too big already. They do not need scratch tickets. Their products will tempt people to use change to chase luck. Some of this change will be money from the Government Baby bonus and social welfare payments. By keeing lottery products away from supermarkets at least separates essential purchases from non essentials such as lotteries.

It would be socially irresponsible for the Steve Bracks Labour Government in Victoria to break a system which is socially responsible and has been generous to them for so many years.

While Tattersalls may have issues, at least their profits stay here. Intralot is a Greek company. We should not be shipping profits offshore when a local company serves us well.

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Lotteries

Supanews takes over franchisee store

This may be late news for some: Supanews corporate (not sure whether it’s the old Gaskin controlled entity or the new Angus & Robertson / Gaskin / PEP Supanews Retail group) took over the Bayside Frankston store two weeks ago. I’m not sure how this has happened since Tattersalls has a stringent process for appointing Accredited Representatives. This takeover seems to have happened faster than regular purchases can be processed.

I doubt this is the end of the dispute between franchisee and franchisor.

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Newsagency challenges