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

Author: Mark Fletcher

Being selfish about newspaper promotions

age_cards.JPGThe Age has a great promotion tomorrow – a park of 50 Epicure recipe cards. We received 200 packs, we’ll sell 160 copies of The Age – the 40 spares will be for home delivery customers – not just from our area but others. Being in a shopping centre we get many customers from other areas. The 40 packs will be gone by 10 am. Rather than eat into the allocation and satisfy home delivery customers we’re quarantining 160 for our retail customers. I know this will upset the folks at The Age but we have to put our direct customers first. Promotions like this, with a scale out lower than demand, damage the brand – hence our decision to be selfish and hold back enough to satisfy our customers.

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Newsagency challenges

Real estate agents to take on News and Fairfax?

The Australian yesterday reported that the Real Estate Institute of Australia is planning to launch a website to collate property sales data and, ultimately, compete with realestate.com.au, domain.com.au and the many others. It’s a move by independent real estate agents to take control back of a key traffic generator for their businesses – online advertising. While the move is likely to be too little too late, it’s the arrogance of a major competitor which caught my eye in the story:

Realestate.com.au chief executive Simon Baker said those price rises were justified because they corresponded with the much higher rises in site traffic and property listings.

Mr Baker said the group was not concerned about the prospect of an industry-led site because it was unlikely REIA would be able to obtain enough capital to adequately fund a new sales portal.

The Australian is published by News Limited which owns 53% of realestate.com.au. Baker is wrong to justify price rises of 10% a year on traffic generated by the site. The Internet is not a place where such old school justification of price rises is accepted. Online shoppers do so because online costs are less. Price rises ought to reflect real price rises experienced by the supplier and not what they think they can get away with.

By allowing online advertising sites to grow unchecked as they have, real estate agents have lost control of traffic to their doors and this makes them vulnerable. If Australia follows the US there will be a move to cut real estate agent commissions through better online functionality. Just as happened with online travel portals taking business form travel agents. Why will I be happy to love, say, $10,000 to a real estate agent when I can use an online ad portal to take care of the main work for less than 10% of that?

To compete with the power of realestate and domain, the agents need to offer new and exclusive functionality. It’s not just about price as the story in The Australian suggests – offering cheaper ads will not work. The agents need to leverage their intellectual property to their advantage.

The disruption faced by real estate agents is similar to that faced by newsagents. Both are old world bricks and mortar businesses made up of independent business people often too busy running their businesses to see the tsunami of online driven disruption which threatens to impact business as they know it. Good on the REIA for acting on this. It’s more than we are seeing from newsagents. However, their reaction will need to be faster and smarter than current reports suggest.

The challenge is that real estate agents and newsagents rely on long term big business partners who are no actively competing against them. This issue is the elephant in the room no one wants to talk about – how dare we speak ill of a supplier competing with us for fear they will go harder. The reality is that News and Fairfax are competing with real estate agents, they are a huge threat to the model real estate agents operate under. Likewise with newsagents. Fairfax and News will do what is right for their share price – meaning that newsagents and real estate agents must do only that which is right for their profitability.

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Media disruption

Virtual bumper sticker: I blog and I vote

Just as roads, water and electricity were hallmarks of a developed country last century, free wireless broadband is a key measurement this century. Access, price and speed of broadband are a barrier to the education, commerce and development of a country.

Australia risks Third World status when it comes to broadband access. Rupert Murdoch was right to blast the Government on this last month and Communications Minister Helen Coonan was wrong to criticise him. The Government sees the provision of this essential infrastructure as the responsibility of the telecommunication companies. I see the Government having a key role. This should drive the cost down and increase the roll-out speed. Like any essential infrastructure, the cost to the consumer ought to be tiny if not nothing. By leaving it up to the telcos, the Government is making our country poorer by world standards.

While Rupert Murdoch wants more ubiquitous and faster broadband for his businesses, I want it so more Australians are participating in the new world – more bloggers; better education; more competitive commerce; and, a more competitive country.

Having returned yesterday from LeWeb 3 in Paris, once again having to navigate no access or, often, poor quality wireless access, and reading more finger pointing on this I’m frustrated that the government does not get it. National broadband coverage (wireless or not) is essential. It’s not about whether a telco will make a profit or not. It’s about the citizens of the country being able to compete on the world stage – today, not in five or ten years. Today we need this coverage. We are being left behind.

For location of free WiFi hubs the government could look no further than newsagents. There are 4,600 retail locations across the country. They are already hubs in their communities for other services. I am certain newsagents would gladly play a role in free WiFi access and help the government take Australia out of third world broadband access status.

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Blogging

UK newsagents seek competition review

The UK National Federation of Retail Newsagents this week made an unexpected formal application to Office of Fair Trading (OFT) for a full review of the newspaper and magazine supply chain. The newspaper and magazine supply model has been subject to OFT consideration over the last two years with OFT positions being advisory. The review sought by newsagents, if granted, could result in changes being imposed on the channel by the OFT.

The distribution of newspapers and magazines in Australia was deregulated by the Federal Government in 1999. No review on the impact of this deregulation has been conducted. Many newsagents contend that deregulation has seen them severely disadvantaged in that new competitors to newsagents get to choose the magazines they stock and only take the top 50 or so titles – leaving newsagents, who have little control over what they stock, to carry more than 2,000 less-popular titles which account for less than 25% of retail sales.

Given the Federal Government’s involvement in driving the deregulation in 1999 I would have thought that a Productivity Commission Inquiry would be an appropriate forum in which to assess the impact on the community, small business newsagents and small publishers of the government policy change.

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magazines

FHM closes in the US

Emap has closed the US edition of FHM magazine as a result of falling sales. The Mediaweek report has this telling quote:

“With conditions in the U.S. worsening, we have decided to focus our resources elsewhere on faster growth platforms,” said statement, Emap Consumer Media CEO Paul Keenan.

Sales in the ‘lads mags’ category is okay from the newsagent data I see but not strong. Lads mags suffer from second rate location in many newsagencies because of content. They also suffer because their target readers can find equivalent free content online.

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magazines

More abuse of newspaper mastheads by Fairfax

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Advertising people at The Age continue to treat the masthead as if it’s a web page with pop-up like post-it ads. Customers hate these. Editors and designers who put their heart into creating the front page must hate them too. What does it say about the publisher’s view of their product that it is desecrated like happened on Tuesday this week (above).

afr4.JPGWhile the advertising folks at the Financial Review don’t get to cover the masthead, they do get to cover front page stories as this photo from Tuesday’s AFR shows.

These post-it ads must be worth it otherwise Fairfax would not un them. I wonder if their increased use reflect lesser respect within Fairfax for their printed product. Would the editors and publishers of, say, twenty or ten years ago have agreed to these ads? I suspect not.

Am I alone in thinking this?

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Uncategorized

Is Fairfax about to launch online news dailies in three states?

Crikey published this story today (sourced back to The Australian) – suggesting that Fairfax is about to do in Brisbane, Adelaide and Perth what News did earlier this year in Perth with it’s online Perth Now news site. Such a move by Fairfax into capital cities where it does not publish today makes sense, unfortunately for newsagents.

We have been insulated from the print media disruption seen in the US and Europe because of our strong home delivery position. This play by Fairfax and the earlier by News will take the shackles off and speed up disruption.

It all comes down to monetisation. The publishers can see the income stream. Fairfax Editor in Chief of Online Mike van Niekerk said as much in his presentation entitled Cashing in on Digital Success at the Beyond the Printed Word conference I attended in Vienna last month. Fairfax has optimised its sites for financial return. They know what they will make with local editions in these new states.

News will respond to the Fairfax move into these new markets. The more the publishers compete online the less they will focus offline. They’d disagree with this if you ask them but it’s true – you only have to see what has played out overseas to see what will happen here.

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Media disruption

Coke muscles in on Christmas card business

Webpronews reports that Coke and YouTube are collaborating on a Christmas greeting card play. The second paragraph of the article stabs at greeting card retailers and publishers:

Sure paper Christmas cards look nice sitting on a mantle, but what else do they do? While they are thoughtful, they cannot actually convey emotion the way that spoken words can. What better way to say Merry Christmas, Happy Hanukah, or Kwanzaa than with a customized holiday video card from Coke and YouTube?

Welcome to disruption on the greeting card space. MediaPost has more on the store here.

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Greeting Cards

Reflecting on LeWeb 3 in Paris: blogging, newsagents and our businesses

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LeWeb 3 has come to an end in Paris. It’s been an interesting and worthwhile conference. Here are my headline take-aways in my key areas of interest:

OVERALL
The world is flat.

Borders are not as important as they used to be.

Intellectual property developed in online start-ups could be more valuable to an economy than its natural resources. In Australia we’re not doing enough in this area – we’re too busy worrying about finite resources to understand that better policies can create value out of innovation.

BLOGGING AND BLOGGERS
We are behind in Australia. We need a more visible and robust fifth estate. Bloggers of Australia ought to unite and encourage more people to blog. No one else will talk up blogging if we don’t.

There is a vibrant, vocal and effective fifth estate in Europe and, to a lesser extent, the US. We have not found it yet in Australia. Here in Europe there are more bloggers per capita and they are fierce in blogging. They are using blogging to navigate to a more transparent democracy with more voices heard. In Australia we’re barely started on that journey.

Bloggers are constituency to politicians and garner respect – well during a campaign at least.

Blogging is not for geeks. Well, they do it, but so many others do and on all manner of topics. We’re not hearing these voices in Australia.

NEWSAGENTS AND THE MEDIA
The world as we know it has been disrupted. Our (newsagents) dominant traffic generator, newspapers, are not what they used to be. News is being delivered and consumed anywhere and at anytime. There is a movement to reduce filters, like mainstream media companies, and to provide more direct and diverse access to news and opinion.

Newsagents need to find relevance in this new world and find it fast. We need traffic and from that sustainable revenue.

The Internet is a supply chain game. Newsagencies were created by publishers to be a supply chain game. They need us for the next few years so they can access profits while people transition from over the counter to online access of news and information. My feeling is that there will be a tipping point, for newspapers sooner than later, where our model is no longer viable. We should see that before our suppliers.

FIND IT, 3LOVES AND OUR NEW ONLINE BUSINESSES
I won’t list all take-aways here because it suits me commercially not to.

In this conference on 1,000 delegates I heard about more than 150 Internet start-ups and I didn’t network that much. The start-up world is noisy, companies and countries are scrambling to build IP which will be the natural resource of the next generation. There is some very exciting innovation.

Web 2.0 is about social interaction. Games, virtual worlds and many other traction-gaining innovative online businesses are more about social contact than anything else. Social connection is the game in town.

The customers in control, genuinely in control. If you do not allow this they will not support your business.

Traffic must be two-way including in news and information models.

Free is the price point target if you’re building an online business.

My final take-away was not presented by anyone but it’s one which has grown with me over the last few months and hearing people talk so much about monetization over the last few days it became more important to me:

Our mission is more important than profit.

Our mission is to help individuals and businesses spend less on more effective advertising so that they can pass on the savings to consumers who can in turn use the savings to create a better world.

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Blogging

Oranges and lemons and poor wifi access

Orange provided the WiFi coverage at the LeWeb conference and turned what should have been a triumph into a mess. With more than 600 of the participants fighting for bandwidth, the network infrastructure was always going to be challenged. Based on the frustration expressed by some, I bet the folks at Orange wish they’d never agreed to provide WiFi coverage to LeWeb. Still, it’s better than WiFi access I see back in Australia. I’ve trued the Telstra PCMCIA card and gave up on that. Then I switched to the Optus PCMCIA card and it’s no better. In a world where we’re more and more needing to be always on wireless access has to be addressed – it’s a business requirement if Australian businesses are to remain competitive.

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Uncategorized

Second Life? I’m having enough challenges with this life!

second_life.JPGI’ve heard about Second Life and even checked it out but I never really got it. I mean, why spend hours every week creating a virtual life, which can never become real, when that investment in your real life could be more rewarding? What was I missing? Plenty it seems. Glenn Fisher CEO of Second Life dished our some amazing stats about the Second Life business at LeWeb 3 this afternoon:

1.6 million current registered residents. To reach 2 million in the next couple of weeks.

500,000 active residents.

10 million objects in the virtual world.

900 events each day.

900,000 unique items traded or sold in October this year alone

The top ten businesses transact a real US$25,000 a month.

The next 100 businesses transact, on average, US$6,300 monthly.

Half of the time in Second life is spent by females, average age is 32.

55% of the residents live outside the US.

Most important of all was the realization that Second Life, for many inhabitants, is like a local café or pub or club. People go there to meet other people. It’s social. Sure it’s commercial for some, but for most, it’s social. The commercial operators are there to support those there for the interaction.

This new way to soclialise is a challenge for those of us with businesses involving social interaction and which rely solely on the bricks and mortar world. Fisher’s presentation today had some important takeaways for me and the Find It and related social media sites we’re developing but I’ll save those for a more private place. In the meantime, if you’ve never been to Second Life, go and see what close to 2 million residents see in this new world.

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Newsagency challenges

Politicians talk up the Internet at LeWeb 3 – because bloggers and their readers vote?

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Nicolas Sarkozy, a conservative candidate for the presidency and Minister for the Interior addressed LeWeb this afternoon. While I’m not sure about his politics, his comments about the Internet and the need for France, and any country for that matter, to foster online innovation made sense. He called for easier access, better tools, better education and government support for R&D.

What was important about Sarkozy and other politicians coming the LeWeb today is their understanding of the importance of the blogosphere and the risk to countries which do not innovate.

Back in Australia I am reminded of the debate about who pays for faster broadband and the lack of government support for web 2.0 and related start ups. All Australian Governments ought to be eliminating barriers to online access, they ought to be aggressively funding startup Web 2.0 innovators and they ought to foster a culture of genuine intellectual property development. This is the next natural resource and our Governments, State and federal, seem to engage in all buy lip service.

IP in Web 2.0 and beyond businesses could be our next export and we’re not even having a national public conversation about it. Not seriously. In Australia we need faster, better and cheaper access. We need to foster innovation. We need better tax breaks for this innovation. And, we need politicians who understand the flat earth, open and people driven of the Internet.

Here is Paris we’ve heard from two presidential candidates today who consider the matter so serious that they come and speak to 1,000 bloggers from 37 countries. That says something beyond the fact that there is an election next year. These two had passion and a grasp of what is happening online. They engaged beyond platitudes.

All that said, others were not happy that politicians got time at the conference. Dieter Rappold has some views worth reading as does Tom Morris and Tom Raftery and plenty of others. Do a Google search and you’ll see the blogosphere alight in anger at what many label as the conference being hijacked by the politicians.

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Uncategorized

LeWeb 3, politics and revolution

François Bayrou, a presidential candidate for UDF in the elections to be held here in France next year was welcomed to the stage with some delegates yelling out their displeasure at a political candidate interrupting the advertised program. I was inclined to agree but he soon won me over. Here was a candidate saying that mainstream media is not taking much notice of him and that blogs offered to drive democracy through greater transparency. He cited the Howard Dean campaign for US President in 2004. Maybe he should connect with Joe Trippi – the architect of the Dean online campaign. Of course at a bloggers conference this was what we wanted to hear – that blogs matter, that they are essential to democracy and that the filtering by some mainstream media organisations of news and opinion is unhealthy. The detractors seemed happy by the end of Bayrou’s conversation.

In this an other presentation I am asking myself: where are newsagents in this? Nowhere, not in the online world or the blogosphere. The world is in the middle of huge change in how we access and share information. Newsagents used to be at the hub of that. They (we) need to find a new traffic generator hub.

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Citizen Journalism

LeWeb 3: Shimon Peres calls us to blog for democracy

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Former Israeli Prime Minister and Nobel Peace Prize winner Shimon Peres spoke for an hour at LeWeb 3 this morning. 1,000 tech geeks and bloggers sat in silence as he shared his views about the world and, more specifically the Internet. He graciously answered questions from the audience.

I didn’t come to LeWeb 3 expecting to encounter a world leader like Peres and was surprised to hear yesterday that he would attend. Walking up to the venue today the consequences of his attendance were evident with police and security in strong attendance and a bag search before entry – yesterday there was none of this.

peres_2.JPGPeres surprised me. He was passionate, engaging and well informed. He came across as honest in his comments and answers – maybe they are traits of a politician out of office. He sees the blogosphere as vital for democracy and breaking down borders. He sees it as crucial to transparency and essential to a more peaceful world.

Peres called on bloggers to blog for democracy. I took some of his comments as a criticism of mainstream media and the control they exert on what we know and what we ought to think.

Here are some quotes I found compelling from Shimon Peres speaking this morning:

Our task is to imagine and create, not so much to remember.

Young people have stopped reading the newspaper and stopped watching TV.

States, countries, borders and governments are no longer too important. They were important when we lived off the land. When science and technology took over and became the source of wealth why do we need borders? You can’t conquer wisdom.

You are so crazy to be popular that you forget why you became popular.

I cannot see a political solution to the Middle east. I can see an economic solution wich will drive a political solution.

We cannot live under one flag or one opinion.

Democracy is the right to be different, the right to make mistakes and the obligation to correct them.

If we spent what the war in Iraq costs in one month, US$30 billion, and spent that on commerce in Iraq, the outcome would be better.

Israel is going solar. It is better to hang on the sun than Saudi Arabia. The sun is more democratic.

Don’t look at the past, it’s a waste of time.

I have not taken much notice of Peres in the past except watching the occasional news report. The Middle East is a long way from Australia and, well, I tend to focus more on local stories and stories which directly affect me. I felt ignorant listening to him today. Ignorant that I had not taken more notice. I suspect others in the audience felt this as well.

peres_3.JPGAt the end of his time at LeWeb, Peres was delivered a spontaneous and long standing ovation. Delegates were honored to have him speak and moved by his words. His presence at a blogging conference adds to the credibility and importance of the blogosphere. He sees blogs as a legitimate – and two-way- communication channel.

Peres’ presence is like a hand of encouragement at the black of all 60 million bloggers around the world.

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Citizen Journalism

LeWeb 3: Is TV dead?

This panel was more direct. Yes, it’s dead – certainly for Gen. Y. They prefer less filtering and don’t like the restrictions of aggregators. Away from the panel, in the networking area, I was surprised at the number of startups in the IPTV online video space. This is powerful for program makers. Hitherto expensive and insurmountable barriers to getting documentary and fictional content to an audience are being eliminated. In Australia we’re not seeing much activity yet. Check out Bonjour America for a good French example of this new type of IPTV content. Check out xolo for a video blogging company which is making money from user generated content Euro500K since July.

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Media disruption

LeWeb 3: Is old media dead?

This roundtable discussion at LeWeb this morning was fascinating. I thought everyone on the panel would say yes with a cheer – it’s a bloggers conference after all. They said no, a resounding no. Bloggers and new media players are more respectful of old media than mainstream media executives are of bloggers. In Sydney at the Media Congress a few weeks ago folks from Fairfax and the new newspaper marketing group made fun of and disregarded the impact of blogging. Here in Paris, leading bloggers and online media startups see a merged world with blog and more traditional media content.

While one could argue that the new kids on the block (bloggers) would want to attach to old media to gain credibility. It’s not coming across from them that way. There is genuine respect for old media. Blogs and old media coverage of any issue combine to provide better coverage on all issues.

There is a consensus that old media is smart enough to morph to the new online world. What that means is that old (over the counter) as we know it is in decay. If the question was is old media as we have known it for the last 50 or so years dead?, the answer would be – maybe not yet but it’s dying.

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Newsagency challenges

Forbes doesn’t get Craigslist and labels it a newspaper killer

Craigslist President and Chief Executive Jim Buckmaster isn’t nuts. He just sounds that way, particularly to anyone who thinks that the point of running a business is, you know, to make money.

And that was enough to make his appearance last week at the UBS Global Media & Communications Conference feel like a dizzying trip through Lewis Carroll’s looking glass.

So opens Newspaper Killer, an article by Louis Hau at Forbes.com. Hau doesn’t get the Craigslist model and demonstrates this with the final sentence of his piece.

We now return you to your regularly scheduled reality, already in progress.

Craigslist is profitable. That it is not making every last dollar possible does not mean it is run by lunatics. Jim Buckmaster sums the model up well:

Ours is to try to be as philanthropic in our core business as we can be and leave all the money out there in the hands of users.

We have borrowed heavily from the Craigslist model in developing Find It. Our plan is that at least 60% of our ad categories will be free and by the time we launch it may be more. Find It is a private company so growing shareholder value is not that big a deal. Our pricing aims to help our advertisers keep their prices lower.

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Online classifieds

LeWeb 3: newspapers in passing

The conference started with a conversation between host Loic LeMeur of Six Apart and Skype’s Founder Niklas Zennström. It was a valuable 20 minutes about Internet businesses. What I’ll comment here about is a question put by LeMeur. He asked whether the newspaper was dead after Zennström said that anything that can become digitised will become digitised. Zennström said no, the newspaper is not dead. LeMeur asked if he read the newspaper. Pause. Sometimes Zennström said. Around me, in the body of the hall, several delegates said they can’t remember the last time they read a printed newspaper. And a few second later it was forgotten as if it were yesterday’s news.

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Newsagency challenges

LeWeb 3: blogging credibility

leweb_3.jpgDave Sifry from Technorati presented some excellent stats illustrating how fast the blogosphere continues to grow and how bloggers are gaining more links and references than much older commercial news sites. These links demonstrate credibility. Alexis Helcmanocki of IPSOS, France followed with very recent research in Europe illustrating how consumers rate blog content about products compared to sources such as newspapers and company websites. Both presentations reinforced the power of the blog.

Blogging is important. Of course I’d say that, I blog. It is important and here’s my view on why: anyone can do it; it’s free; people take notice; it makes the world smaller; blogging ignores economic status. It is the ultimate – by today’s standards – globalisation tool.

By blogging here about issues affecting my newsagency I have been able to achieve outcomes which eluded me when I used regular channels of communication. Companies notice when you blog about them and, often, they don’t like it. I had one supplier who had been ignoring an issue so I blogged about it. They responded within hours of the blog post. Then they asked me to take the blog entry down. I refused but added a footnote.

Blogging gives me the ability to bring matters of concern direct to the attention of some who would otherwise remain ignorant of the issues.

While companies respond to blog posts, it’s my experience that Government Ministers do not. I have outed Communications Minister Helen Coonan and Small Business Minister Fran Bailey here as being rubber stamp ministers and not caring about small business. It seems that no matter what I write they do not engage. Formal letters get impersonal off the shelf letters and blog posts are ignored. I’d rate government engagement through blogging as a failure at the moment.

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Le Web

LeWeb 3: Trade journals disappearing thanks to blogs

Dave Sifry, founder of Technorati, told LeWeb 3 participants today that trade journals were dying thanks to blogging. He said blogging about specialist topics was more economically feasible than publishing a magazine. I agree and would go further: blogging is more immediate and less influenced by advertisers. I have a real gripe with trade journals which give over editorial control (or at least part of it) to advertisers. Through blogging industry participants have a better chance of getting accurate and more timely reporting of a situation.

Sifry’s comments also relate to niche publishing. In Australia I would consider around 300 titles in an average retail newsagency to be niche titles. If retail newsagents charged a fair price for their real-estate and labour currently supporting these niche titles, they would quickly move online. While I like that only newsagencies have these niche titles, they are not economic and the sooner we put them to rest the better. We are deluding ourselves if we think having uneconomic niche titles makes for a good business plan.

What newsagents could consider doing is somehow leveraging their connection with readers of these niche titles through a blog based forum so that the connection made in the newsagency is taken online. The payoff for newsagents of doing this could be advertising. Creating such a blog or other type of forum would be easy.

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Le Web

Le Web 3, newsagents and finding a future online

leweb1.JPGTake 1,000 IT people involved in online businesses from around the world – from developers to venture capitalists – and you’re bound to get reality checks on a range of fronts. Le Web 3 brings these people together in formal conference sessions, informalk networking and a fascinating, compelling and intimidating start-up room. I’m here learning for the Find It online classifieds business being rolled out in partnership with newsagents. But there are more take aways than those which relate to Find It. Here is a summary of my key take-aways today.

First up, every second attendee is sitting in the conference hall laptop open and reading and writing during the sessions. More male than female. I’d guess the average age at early 30s.

Newsagents are getting left behind. I know I go on here like a cracked record about this but you onle have to come to a conference like Le Web and see how disconnected we are with the new worl in our bricks and mortar businesses. We must get this to survive.

They are generating content as they go – participating in live and relevant polls which speakers comment on from the stage.

Newsagents have no conection with the world of user generated content.

We’re hearing that user generated content is key. Quality content. A chap from yahoo said driving quality content was the holy grail. But then he said that while there;’s crap at YouTube, that there is some quality makes the site compelling.

The newspapers and magazines we sell in newsagencies deliver, in the main, quality content. There’s some, short term, comfort in that.

There was talk of a big impact of Web 2.0 on middlemen and in particular TV networks. IPTV is about connecting content producers with consumers. The TV stations are the losers in this. Consumers are proving they want content where and when they want. TB networks work against this. In an IPTV world the TV program is replaced by an a la carte menu.

Newsagents are middlemen for the most part. We make money from selling product people can get individually elsewhere. We need our own reasons to exist.

Free is the game in town. Free broadband. Free online software. Free content. Monetisation comes from advertising and other less obvious revenue models.

If you look at the change in newspaper cover prices in Australia over the last ten years compared to the change in advertising rates over the same period and you can see that publishers agree. In real terms, Australian newspapers sold in newsagencies are closer to being free today than ten years ago. Niche titles – foreign language newspapers – price their product as if the content is valuable.

More than this has been covered so far but I’m not about to blog about take-aways which will benefit Find It and my other businesses.

So far Le Web 3 has been exciting, challenging and very enjoyable.

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Citizen Journalism

Displaying newspapers to sell.

foreign_papers.JPGOne other surprise today looking at how newspapers and magazines are sold in Paris is the lack of rules. Here’s a foreign newspaper stand at one of the Presse kiosks – it’s easy to browse. The local dailies are close to the counter with the full cover viewable. Back in Australia we have all sorts of rules – how close to the front of the shop, the type of stand to use, the amount of space to give etc. Sometimes these rules get in the way of our customers. Here, with newspapers especially, it’s about easy access.

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Uncategorized

Paris observed

pharmacie.JPGHere are some random retail-related observations from a day wandering around Paris.

Pharmacies are everywhere and well branded.

Starbucks is almost non-existent.

McDonalds is almost non-existent.

I don’t think the French send greeting cards – I could not find one card shop and I sure covered some ground.

Stationery is also hard to find – I saw two bookshops with reasonable ranges.

Shops are closed on Sunday. So much for us thinking the world will come to an end of we don’t open on Sundays.

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Uncategorized

Is greed killing us?

presse_2.JPGThese are the most common ‘newsagencies’ on the streets of Paris and suburbs from what I have seen today. These ‘kiosks’ are efficient – they allow for the display, Parisien style, of 250 magazine titles, all major dailies and another 20 or so imported newspapers. They also offer tobacco, candy and, in some cases, calling cards. Newspapers, magazines and tobacco products account for 80% of all sales. High street newsagencies have not been forced to retreat to these kiosks – I’ve been told this is how it’s always been for the sale of newspapers and magazines. It’s certainly efficient. These Presse kiosks are everywhere.

Seeing so many Presse kiosks today made me wonder if we (newsagents) have got too greedy. Have we taken on operational costs which in turn have forced us to broaden our product range – for which we take on more costs? By staying small these French ‘newsagencies’ have contained costs and remained at the hub of street traffic.

By pursuing a shopping centre tenancy for a newsagency we immediately fix the business with a $200,000+ annual rental cost. Add labour of between $150,000 and $200,000 and you have a newsagency with some challenges. I wonder whether a kiosk selling the top 200 magazines, newspapers and some candy would be more profitable. Of course, landlords will have none of that. They want newsagencies as in-line tenancies to draw traffic for other stores nearby. Unfortunately, they are not offering rental terms which respect our tighter margin compared to others. So, if we are greedy in chasing revenue it’s because the circumstances demand it of us.

The other party in our size is magazine publishers and distributors. They created our channel in the 1800s and for the years since have relied on us to provide a cost effective distribution channel and free retail real-estate. They’d choke if we said we would only stock the top 200. The reality is this will happen unless we are paid to carry titles outside the top 200 which do not pay their way.

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