Ashes Series Herald Sun Pins on eBay
Interesting to see the Ashes Action Pin Collection already listed at eBay even though we’re only two days into the Herald Sun promotion.
The Australia Post soft and fluffy lucky charm
This is the entrance to the Government owned Post Shop opposite my newsagency. To get to the line to buy stamps or post a parcel you first need to navigate the soft toy speed hump. It’s there right in the entrance. I have been thinking about these soft toys and how the executives at Australia Post con the government that they are somehow connected with providing postal services then it dawned on me – they are the their lucky charms. They bring luck to the house in which they live. By luck, I mean on time mail. Buy one of these Australia Post soft toys and your mail will be on time. This means Express Post will arrive the next day!
New Idea, WHO to publish features on Belinda Emmett tomorrow
WHO, out tomorrow, has a cover story about Belinda Emmett who lost her fight with cancer last weekend. The publishers have announced a donation of 10 cents from every copy to the McGrath Foundation. New Idea is publishing three days early and will be out tomorrow with a Belinda Emmett cover story and 10-page special tribute. Pacific Magazines, New Idea publisher, is donating $15,000 from the New Idea Breast Cancer Fund to the McGrath Foundation. From our newsagency we will be donating 25 cents from each copy of WHO and New Idea we sell to the McGrath Foundation – their focus is in raising funds to fund specialist breast care nurses primarily in rural areas without current access to them.
Is Sir Humphrey Appleby working for the Government?
On September 26 I wrote to, among others, Federal Minister for Small Business, Fran Bailey about Australia Post and the unfair advantage their Government-owned Australia Post stores had and how they were specifically targeting small businesses, specifically newsagencies. In my letter I said, in part:
When farmers talk of the impact of droughts the government steps in with assistance. When auto makers talk of the impact of cheap imports the government steps in and helps. When newsagents talk of the impact of Australia Post the government ignores us.
Australia Post is our drought. For many years now it has been draining newsagencies of revenue.
Yesterday, I received this reply from the Minister. While I appreciate the response, it is meaningless. The letter says, in part:
The Australian Government recognises the importance of newsagencies in our communities and is committed to creating a fair trading environment for all small businesses.
It also makes the claim that Australia Post is permitted to:
…carry on any business or activity that is incidental or relates to the supply of postal services.
This morning I have responded with this letter to the Minister. How can the Government consider Music CDs, Chess sets, Radios, Puzzles and Cookbooks to meet the criteria under the Act? Why will the Government not take steps to have the Australia Post breach of its obligations under the Act investigated?
The Government is conflicted beyond its ownership and regulation of Australia Post. As my letter to the Minister today says:
For decades, newsagents were profitable while they had a monopoly on the distribution of newspapers and magazines. In 1999 the Government facilitated the deregulation of the distribution of newspapers and magazines. As we have lost the benefits of exclusive traffic as a result of this deregulation, Australia Post has increased its range of newsagent type lines and thereby very successfully leveraged its continued exclusivity to more effectively compete with us.
I am not calling for a wind-back of newspaper and magazine deregulation. Rather, I am calling for the Government to get out of the business of competing with independent small business.
I was in a Government owned Post Office yesterday and was confronted with a big display of plush product – soft toys. Where in the Act are provisions permitting Australia Post to enter the soft toy space? Their entry into this category this Christmas season will affect sales in my newsagency.
I am disappointed that the Government will not even for a moment contemplate that they are wrong on this and that the actions of their Corporation are harming a small business channel which is vital to the community.
Yes, Sir Humphrey Appleby is alive and well and writing letters for the Government.
Flyer boosts magazine and scratch ticket sales
We sent this flyer out to 20,000 houses around of shopping centre as one part of our pre-Christmas marketing strategy. It was delivered with the local newspaper – ensuring it gets into letterboxes. It’s the first time we have promoted our Magazine Club Card promotion using anything other than our over-the-counter pitch. We had to do something since we closed our second outlet for a month while we moved and built an entirely new store. In addition to these flyers we are creating bolder in-store displays and undertaking several other initiatives to reinforce sales in our main shop.
The scratch ticket promotion on the second page of the brochure is working very well. Sales are up considerably. This is in part due to the flyers but more because our employees know they need to offer the up-sell otherwise we give away a free $1 ticket. There is no doubt that a low an up-sell at a newsagency counter costing no more than loose change works well. We tried this a few months ago with pens and also with chocolates. Each time it worked a treat.
The reason we closed our second shop is so we could make way for our new card and gifts shop. Considering margin and the mix of products in our centre we feel we will be better served with a differently branded card and gift shop on the lower level of the centre rather than a smaller version of our newsagency. There will be a short term loss of magazine and newspaper sales – but this flyer campaign and related activity should address that. The move is about the long term of the business.
Story of a newsstand closure
Via the New York Times comes this story about the closure of a newsstand in Seattle in submission “to the anonymous forces of the Internet and soul-less chain stores”.
Media disruption forecast in 1931
Thanks to Rob Curley, speaking at the Beyond the Printed Word conference in Vienna last week, I discovered this quote from William Allen White, Pulitzer Prize-winning editor and publisher, in 1931:
“Of course as long as man lives someone will have to fill the herald’s place. Someone will have to do the bellringer’s work. Someone will have to tell the story of the day’s news and the year’s happenings. A reporter is perennial under many names and will persist with humanity. But whether the reporter’s story will be printed in types upon a press, I don’t know. I seriously doubt it. I think most of the machinery now employed in printing the day’s, the week’s, or the month’s doings will be junked by the end of this century and will be as archaic as the bellringer’s bell, or the herald’s trumpet. New methods of communication I think will supercede the old.â€
William Allen White, April 21, 1931
in a personal letter to Lyman B. Kellogg
White is right. How we access news and information will change. That it is published will not. This is why the goals of publishers do not match those of their distribution network. We are in different businesses. We must understand that if we, newsagents, are to make our own future. Not today or tomorrow but sometime soon our network will lose its value and, I suspect, be cut loose. We must pursue new customer traffic generating models for the future while ensuring the maximum return from the newspaper generated traffic we enjoy in the meantime.
The best connection I can see with the next generation of news and information distribution is through mobile access recharge. These are transactions of fractional value compared to newspaper sales. Today, we make between 18% and 25% on the sale of a newspaper and 5% on the sale of mobile device recharge. I’d expect the mobile device recharge to fall to 3% within the next year. While recharge generates traffic such customers are not loyal and we cannot therefore rely on them for traffic. So, in reality, mobile recharge is no replacement for newspapers.
Core to our challenge is that our channel was created by publishers. For our entire history we have looked to publishers to lead us by providing new products and partnering with us in their own innovations. This cannot continue given that mobile and other non-print distribution models do not require out network. Hence our need to find our own future.
I’ll have more to say on this at a future time. For now, I wanted to share the prescient quote from William Allen White.
Source: Rob Curley, VP New Products development, Washington Post, Newsweek Interactive.
New Woman buckles under weight
Is this a promotion gone wrong or what? The sunglasses attached to the cover of this month’s New Woman fall off. You put them back on. They fall off again. Soon they crack under the weight of a misplaced shoe or shopping trolley. The only way to hold the sunglasses in place is with some decent tape but the glasses are so heavy they make the magazine lean forward. I love promotions which add value to a product but not when they lead to a negative customer experience. While the sunglasses themselves might be a good idea either they need better glue or they need to make it a counter redemption offer – even though they have a different set of challenges.
Online ink and toner sales boost retail store sales
Inkfast, our online ink and toner business, is now fifteen months old and consistently generates more sales than we achieve through the entire stationery department of our retail business. For the last two months we have operated profitably without Google or Yahoo paid advertising campaigns – demonstrating that we have, in the fifteen months, created a sustainable ink and toner business. The benefits for our retail business are: better buying – thanks to Inkfast volume; better time management – it is easier to schedule order fulfillment from an online business than retail sales; spreading the risk – by moving from a pure retail play in stationery to an online/retail mix we are growing the overall category thanks to our new online customers.
While not all newsagents can move online as easy as us – since I also own a software company – they can play through the likes of online auction and classified sites. Given the growth of online sales – reports says it has doubled in the last six months – retailers not online are missing out.
Christmas starting earlier, card sales up
Newsagents usually see Christmas sales of cards and related items kick in early in ember. This year, based on data from several stores in three different states, Christmas seems to have started earlier. Cards are the best indicator and in my own shop Christmas card sales are up 35% on the same time last year and we are down one outlet (our second shop is closed – moving to a new location and underground a complete re-fit). The newsagencies I have spoken with are early-adopters – they have seen the commercial by the majors and went out early with Christmas to capitalise on the market awareness. Sales results prose the early (for newsagents) move to be worthwhile.
News and Fairfax contemplate sharing logistics and more
On the surface it makes sense, Fairfax and News sharing trucks for newspaper distribution. It would be good if newsagents could unlock similar rationalisation so that they too could drive costs down and thereby achieve a better return. For example, it would be good is the rules of the newspaper distribution system allowed newsagents to include other products in a bag delivered to a doorstep with a newspaper.
Newsagents in some states have just been permitted their first delivery fee increase in years – these fees are set by publishers. Data suggests that in real terms newsagent compensation for each newspaper home delivered is considerably lower today than prior to deregulation. With newspaper cover prices – a key determinant of newsagent revenue – showing less than CPI increases, newsagents scramble to make more than a meager income from the delivery of newspapers. Hence the need to unlock their local distribution network for the delivery of other products at the same time as delivering the newspaper. The lack of return is one reason more newsagents are exiting from home delivery than at any time in the past.
It would be appropriate, if the discussions between Fairfax and News proceed further, that the ACCC considers the proposal at the same time as conducting a review of the impact of the 1999 deregulation of the distribution of newspapers and magazines overseen by the ACCC at the behest of the Federal Government.
Prior to deregulation, newsagents operated under a territorial system. Deregulation took that away and while we have an appropriately more competitive environment, newsagents ought to have been compensated by the Government for having their exclusivity unilaterally taken from them.
If newsagents were auto workers, farmers or chemists, the Government would most likely have thrown millions their way as it has done regularly to those industries to facilitate restructuring.
While not wanting necessarily to reopen the deregulation can of worms, there is no denying that newsagents did have something valuable taken from them by Government action without compensation.
Magazine & newspaper theft prevented with lockable boxes
Missing parcels of newspapers and magazines is expensive. Here’s how they fix it in Vienna – lockable boxes which drivers and store owners have access to by way of a key. Some are title specific and others for general use. The Kronen Zeitung (large daily newspaper) box was supplied by the publisher. These two are not the biggest I saw it the city. I’m told it addressed the theft of parcels delivered overnight.
Fairfax cashing in on digital success
Mike van Niekerk, Editor in Chief Online of Fairfax Media, delivered an impressive presentation called Cashing in on Digital Success at the Beyond the Printed Word conference in Vienna which ended Friday. It was impressive not only in demonstrating how to leverage excellent revenue from a popular and respected news site but also in the numbers presented as the table on the left shows. The full slideshow presentation is available online at the conference website. Van Niekerk demonstrated the many ways Fairfax is able to generate revenue beyond the traditional banner ads. He listed examples of rich media, over the page, half page, leader board, TVCs and sponsored links and went on to say that their problem was lack of inventory.
What I would like to see from Fairfax and the other publishers who presented at the conference is the income and net return per employee and by capital compared to the print operation. Given that publishers must be driven by share price it is the return which will guide them to the tipping point where the success of the online model, with a lower cost base, forces significant contraction of the print model. Please don’t misunderstand my interest – I am not wanting to talk newspapers down but rather have a better “heads up†when considering capital expenditure related to the sale and distribution of newspapers.
As publishers like Fairfax continue to drive their online operations, newsagents, too, must aggressively pursue new traffic and revenue opportunities. Every day we continue to perform the same tasks with the same revenue model is another day lost to the changing world and to our more forward thinking competitors.
Publishers plan for life after newspapers, so should newsagents
As the IFRA Beyond the Printed Word conference wound to an end this afternoon in Vienna I was left with more questions than when the conference began. Publishers I talked with see a rapidly approaching cliff in terms of print sales and ad revenue and some are rushing to find replacement revenue. Some openly say that the paid (over the counter or subscription) newspaper as we know it will be dead, in Europe at least, in a matter of years and will be replaced with an entirely new premium print model. They are the early adopters of new models. They are balanced with others who are yet to treat an online presence other than a poor cousin to the print edition.
Back to the questions I arrived with: Is there a common strategy being adopted by publishers to find sustainable online revenue? Who is doing it well? Will online provide the revenue the shareholders in publishing firms are used to? Do the publishers get it that they are no longer newspaper publishers but, rather, media companies? Is there a place for the current distribution system (newsagents) in their thinking about the future? Do publishers really understand the Internet? Is there a revenue model which can work?
In hindsight the questions were naive in that this is all very new and publishers are learning as they go.
I saw heard about some excellent initiatives – Naples News is one, demonstrating what a newspaper with a circulation of 50,000 can achieve. What they are dong is way advanced on any Australian news site. They created this within a year. Core to their success was them taking the online move seriously from the top down and driving change. Check out their restaurant reviews and sports scores – yeah, the sports side of the side is truly amazing. The power available to the reader makes them the expert thanks to smart organisation of data.
The conference is proof that publishers the world over are taking the online challenge seriously and that print circulation marketing today is more about delaying rapid decline than achieving growth. I know there are publisher executives in Australia who disagree with me. Let’s check in in a year, two years and five years and see if I am right. If we follow the US and European examples sales will fall. However, I accept that our marketplace is different so who really knows when the inevitable change will hit. The keys are broadband take up, lower cost wireless devices and peer pressure. My plea to Australian newspaper publisher executives is – don’t get newsagents investing beyond what is absolutely necessary in and chasing paid circulation growth. Newsagents themselves need to ensure that every capital investment is for their future and not just to help publishers tread water.
Newsagents are middlemen. This makes us servants. We are not part of any publisher’s online strategy. I’m okay with that. Publishers need to do what is right for their shareholders. For our part, newsagents need to see the future and act now. We need to break out of being middlemen. We need to get smart about online. We need new revenue streams and they need this now for it will take years to change the habits of consumers.
Just as publishers have come to conferences like Beyond the Printed Word, so, too, should newsagents congregate and discuss their life after print. This is the biggest challenge in the 120 years our channel has existed.
While I am leaving the conference with more questions than when I arrived I have a better understanding of how publishers see the online opportunity and some of the strategies being employed and for that I am grateful.
What do 16 year olds think of online newspaper sites?
It’s a brave conference which gets 16 year olds on stage to critique newspaper websites. That’s what happened this morning at the Beyond the Printed Word conference in Vienna. This team of bright 16 years shared their views, warts and all. Here is a selection of their comments:
Ads get in the way of content. They don’t like clicking on a video and having to watch an ad before the video. (You could hear the gasp when they said this.)
Pop up ads are annoying.
Most banner ads are not appealing.
They don’t like sites with too much colour, too much animation or swirling fonts.
Sites need to be easier to navigate.
It is frustrating having to register to get the content you need.
As soon as you are sent to another site, when you click a link, they quit.
Having a dating service on a news site is degrading. It’s useless.
They have a preference for proper news sites as opposed to citizen journalism.
Sites chasing young people should be designed by young people – they can tell when a 40 year old is trying to design young.
Not much interest in using mobile phones to access news. (more mutterings from the audience given many are playing in this space.)
I can’t do the hour long presentation justice here.
Some key take-aways for me were that peer pressure drives site traffic. When asked if they would switch to another social media site most of the 16 year old panel said no unless their friends switched. The big surprise was their strong reaction of advertising and their dislike for paying for anything. This is a huge challenge for any online content site chasing this demographic.
How does this connect with Australian newsagents? Well, we’re chasing this market and since they are buying fewer newspapers than the generation before them, their insights will help determine what we need to do in-store to be attractive to them.
This was an excellent session, most invaluable.
Newspaper publishers chasing web 2.0 and a revenue model
I’m at the Beyond the Printed Word conference in Vienna along with 450 representatives of newspaper publishers from 41 countries. Everyone is here to talk about how newspapers can make money from online plays and retain (and even grow) shareholder value in this rapidly changing world.
Day one has been kind of a show-and-tell event with publishers presenting what they have done. For me, the most interesting presentation today was by Mikal Rohde of Schibsted Sok AS in Norway. In just over a year the Sesam search engine developed and launched by this publisher has become the hit of Norway. In a globalisation sense it gives me heart that there are some who can beat giants. They are playing in a space few other publishers play in yet it is a logical place for a publisher because what is a search engine but an aggregator of content?
From an Australian newsagent perspective, what is most important about day one is what has not been discussed that much – that print is old news. Some people on the floor talk as if print is already buried. No, it won’t go away but, boy, will it go through some changes. Everyone at the conference is focused on moving the publisher brands born in print to the online world and while many speakers discuss how their online strategy is supporting their print model, the reality is that profit will determine how this plays out.
Newsagents need to understand that newspapers will not be the traffic driver to our retail businesses in five years that they are today and even less so in ten years. This is why what we spend on our infrastructure must change not only to draw new traffic but also to de-emphasise newspapers and to not provide them the most expensive real-estate in our stores.
I was surprised at what some companies have achieved with very small teams. Some excellent sites and services have been established with teams of ten or less – in businesses employing thousands in their print operation. I was also surprised that most of the companies so far are talking about almost single online strategies. Okay, these single sites have depth. I would have thought that is they were looking to replace a significant portion of print revenue they would need many online strategies. Connecting with an online consumer is not a once a day event to get the purchase and leave them be as is the case with a newspaper. For many, online consumption is 24/7 while with others it is many times a day through many channels – hence the need for publishers to break out from behind the masthead and connect through these channels.
Back to Norway, I like that Schibsted has created their own search engine. The control this provides will prove invaluable to their future.
Live coverage is available in part as a demonstration of some of the technologies on show.
Higher margin on magazines for newsagents in Australia
I was talking with the owner of another newspaper / magazine shop here in Vienna today and I uncovered more of their story. First up, they’re on a lower commission. He wouldn’t say but did say he would be very very happy with 25%. I am guessing they are on 15%, maybe a little more. He saw lower commission as a price to pay for better control over the stock he gets. His biggest problem is not getting enough stock of top selling titles. Yeah, I understand that!
In more of the stores today I say the same horizontal layering of magazines with full-face display for only the very top sellers.
Talking with the owner of one store today about our lack of control over what we carry, he ordered Australian newsagents to “get organised, form a union, take control”. For us to do that we have to believe in ourselves, all of us. Getting 4,500 CEOs on the same page is the biggest challenge newsagents have faced and will always face. I can, however, see it happening with a smaller group.
Austrian Post is no Australia Post
I’ve been into a five post offices today in Vienna and found businesses focused on postal and related products and services. More than 50% of available floor space relates directly to postal products and services. Even their retail products relate – packaging, a small range of cards, envelopes, pens and some writing pads. They look nothing like Post Shops we have in Australia. Queues were not long – the most was four during the lunch rush – and service seemed fast. In two outlets they had some CDs and DVDs but even then the range was very limited – nothing like the 90% floor space for non postal items I see in some Australian Post Shops.
One argument used by Australia Post and its apologists in the Government is that Australia Post needs to sell the non post related items to make ends meet. If that’s the case how is it that Austrian Post is doing very well, according to their Annual Report, without taking business away from independent retailers in the stationery, greeting card and magazine space?
Before a Public Offering in May of this year, Austrian Post was wholly owned by the Austrian privatisation agency ÖIAG. Now, OIAG owns 51%. A full breakdown of the ownership structure is at their website. They have with 1,338 “company owned” branches and 612 “third-party outlets”.
The government has the power to rein in Australia Post but does not. They could provide clarity in defining what Australia Post can do but they do not. They could prove their small business credentials and stop Australia Post turning its stores into newsagencies (with poor service) but they do not. There is a lot the government could learn from a visit to Austrian Post.
Magazine publishers and distributors abuse Australian newsagents
Newsstands like this are dotted around Vienna. Further out of the city they become more traditional shops but all carry a similar range of products: newspapers, magazines, confectionery and cigarettes. Usually, only the top ten titles are displayed full face – the rest are fanned along shelves, almost on top of each other with two or three centimeters of the cover showing. Many are displayed this way behind the counter. One news vendor told me this was the tradition. People know what they want and if they don’t he finds it for them. When I asked about browsing he exclaimed – “this is a shop!”.
The newsstand in the photo carries around 750 titles. He chooses what he carries and reviews new titles before deciding if he wants them. He can cut a title at any time. Being in the city with many tourists means a broader range suits him.
Range is a critical issue for Australian newsagents – our lack (or perceived lack) of choice in the magazine titles we carry. We have been conned with a half pregnant deregulation and have not been smart on how to deal with such a biased and broken system. Magazines in the top 100 are fine, I am happy with them and my cut from the cover price. My issue is with titles outside the top 100. Like these newsstands in Austria we need the right to choose the titles we carry. Magazine distributors need to advise details of new titles before they are shipped and we need the ability to set our own supply level. The alternative I see to this is that newsagents charge a weekly flat fee for handling titles, based on the quantity of a title received, for each week of the on-sale period. Of course, we could consider a higher margin for low volume titles but I’d rather see the margin remain the same and us compensated for the assets we bring to the table regardless of sales success.
Every minute and every dollar newsagents spend on titles outside the top 100 – many of which have a sell through of 40% or less – is a minute and a dollar less available for the top selling titles, the titles delivering customers to the shop and good sales growth.
Newsagents are kidding themselves with the current system. We are being abused by some publishers and compliant magazine distributors who often get paid regardless of whether a title sells. The sooner we take control of our magazine real-estate and labour assets and run them like a business the better. The sooner we manage the range in our stores the sooner we will start to increase magazine sales.
My friend in Vienna was surprised to hear how many newsagents there are in Australia and how the magazine supply model works. He laughed at how easy it was for publishers to get “rubbish” into the shops. As I walked away I thought he was probably laughing at me too.
Newspapers and news in Vienna
Even though I don’t read German I picked up a cross-section of local newspapers from Vienna and neighboring European countries. The difference between these and newspapers I saw in London is stark. More news focus. No giveaways, today at least. Less entertainment coverage. I was talking with concierge at the hotel about it and his comment said it all – Newspapers are supposed to be about news aren’t they? yes they are.
Smart stationery retailing in London
While newsagents are retreating from the high street, stationery outlets are strong. Take Ryman for example. They have an excellent range, well laid out and provide a clear value proposition, a mix of price and service, to the browser. Sure they are part of a big group. It doesn’t feel like it in the store. For example, I visited at least ten WH Smith stores (newspapers, magazines, greeting cards, books and stationery) and received consistently mediocre service. The employees looked unhappy and acted unhappy. (I stood in a line for 5 minutes, got to the counter and was greeted with yes please – geez, no smile, no greeting). I visited three Ryman stores and found the opposite. Happy employees who seem to actually want to serve you.
Standing in one of the Ryman stores I got to thinking about how we do stationery in my newsagency and many of Australia’s newsagencies. At Ryman I feel better serviced through range and price. The store encourages browsing. Yet it’s small – certainly the ones I went to. Their Christmas display was bold and enjoyable. Then I think of stationery in my shop – it’s cold, unappealing and reminiscent of work. The Ryman approach makes stationery, work, enjoyable. This is what got me browsing the store. I walked out and sat in a coffee shop (drinking bad London coffee) and made notes, plenty of notes.
Many newsagents are getting stationery wrong, me included. We get it wrong on range, theatre and the value proposition. Even though stationery is one department newsagents fully control, few of us exert that control. It’s the poor cousin to newspapers, lotteries, magazines and greeting cards. In many newsagencies the range and merchandising approach has not changed in more than 20 years. We need to be proud and bold stationers. We need to leverage our geographic asset better than we do today.
These Ryman stores are a real eye-opener. They have demonstrated how to do stationery well in a small space.
The Age goes tabloid, for the Melbourne Cup
I’ve heard that The Age today came out inside a tabloid wraparound for the Melbourne Cup – confusing many customers. Luke from my newsagency tells me:
Dozens (literally) of customers have been confused by this and have been ready to walk out of the shop thinking that there are no Ages. Everyone is confusing them for the Sun and being disappointed. Vice versa, a lot of people are throwing $1.10 at the counter and walking out with Ages.
Some people are excited that The Age has gone tabloid, then disappointed when they open it and it is still broadsheet.
I suspect the reaction encountered at my shop is not dissimilar to elsewhere. It sounds like a Melbourne Cup promotion gone wrong. Newspaper customers are habitual, they like their newspaper just so every day. The Age pushes the envelope – today with the tabloid wrap-around look and other days with their awful post-it type note ads in the middle of the masthead.
Independent newsagents have all but given up in London
I am surprised at the difference in London newspapers today compared to yesterday. Today they are normal compared to yesterday’s bloated and gimmick based products. The only exception is The Times – every copy comes with a book. At Starbucks it was a children’s book. At WH Smith it was a book about houses and working out their history.
It seems that the independent newsagents have all but given up. James News, shown in the photo, is the best I have seen out of 30 or 40 in the last two days in terms of branding. Most allow newspaper publishers to control the branding putting mastheads ahead of the store’s brand and or value proposition. At least James News shows their name. I am surprised that all these independents have not at least got together to trade under a common brand of some sort. Without the profile of a common brand they will continue to face.
On the outside independent newsagents look nondescript. Inside they many feel like a mausoleum. Shelves are barely stocked, ranges are poor. If they sell cards they are cheap. Most have 50 or 100 magazine titles. Snack foods and drinks dominate. I appreciate it’s different out of the City, but it’s still not a patch on what we have back in Australia.
We’re lucky to have newsagencies in Australia. They are unique. Consumers have access to a range or magazines and event stationery it’s hard to find elsewhere. Publishers and other suppliers have access to a traffic-rich and low cost to access retail network with reasonable compliance. We’re clearly doing something right in Australia to have the network we have. Let’s not kill it.
Free newspapers in London make selling newspapers tougher
It’s hard to walk any of London’s major streets in the afternoon without being offered a copy of the london paper – the free newspaper launched by News International eight weeks ago. Strategically located distributors (often outside a supermarket or convenience store) stand next to the trademark purple umbrella and thrust the newspaper in front of anyone walking within a few feet of their position. Today’s 40 page edition feels nothing like the free commuter papers I am used to – MX in Melbourne and Sydney. Indeed, comparing it page by page with the Evening Standard (50 pence) it’s a very competitive offering. Sure it provides more celebrity and fashion coverage than hard news but the key news stories are well covered. Mind you, the Standard had its fare share of celebrity coverage.
I also picked up a copy of London Lite, a free daily launched ten weeks ago by Associated Newspapers and distributed throughout the City. It’s from the publishers of the Evening Standard. London Lite today is 48 pages long. It shares key stories with the Standard and in a couple of instances today, provided more detail than its paid for stable-mate. Maybe I am missing something but I don’t get the strategy of giving away a product which is 75% of your paid-for product – unless it’s an advertising play, assuring advertisers of a certain number of eyeballs you can only deliver through a free version. London Lite is playing in the user generated content space and carries some content provided by readers.
These free London newspapers are very different to MX, the only capital city free daily in Australia. They read as if they are targeting a broader demographic than that of MX.
By creating such good free offerings, publishers are presenting a product which must cannibalise the market for newspapers with a cover price.
As one who relies on consumer habits to purchase newspapers I’d be unhappy if free newspapers like these two from London came to Australia. However, I suspect it is only a matter of time. People don’t have the time for bigger newspapers. When sales are flat or fall I am sure publishers will use the learnings from London and the many other cities where free daily newspapers are a key part of their consumer offering.
Newsagents I talk to are not concerned about MX. They see it as not competing with anything they offer. The two free newspapers in London which I have seen today would compete and that’s what newsagents need to be aware of and, maybe, plan for.
London’s overweight and addicted newspapers would be unrecognizable to their founders
I am amazed at how fat London newspapers are on a Saturday and Sunday. Have they been to the McDonalds management school of bigger is better? It’s not, of course. These bulging newspapers are packed with too many sections, recycled content and ads, for my liking – too many ads. A good newspaper does not need to be supersized. A good newspaper needs good news coverage. The London newspapers I have seen seem to think that size does matter.
They are drug addicted as well. Hooked into giveaways because they cannot get the desired circulation without a bribe. The addiction I saw when here a year ago is as evident today. The Mail gave me a DVD of Mrs Santa Claus, The Sunday Times gave me a CD-ROM Family Tree Maker, The Daily Express gave me free Christmas Cards (but I had to go to Superdrug to redeem those) and The Sunday Telegraph gave me free Hybrid Tea Roses – if I send in a coupon and pay the postage.
Yesterday (Saturday) The Times gave me a DVD – Who Do You Think You Are – an episode of the BBC series of the same name.
Tomorrow, the Daily Mail starts a part series of Disney PC Games. How this works is that you buy the newspaper anywhere but can only redeem the coupon for the 12 parts at WH Smith or Eason stores. Given the UK market I can understand publishers limiting redemption to selected branded stores. Looking at this campaign, and considering all the others, one has to acknowledge the deep addiction of publishers to these giveaways in an effort to attract sales. My question is – who is going to stage an intervention and break the habit of the publishers? Certainly in Australia, unless the scale out model of the giveaways gets smarter, intervention to kill the addiction is essential because poor scale out is losing customers, not gaining them. Here in London the problem is more serious – these aren’t newspapers. There are advertising wrap-arounds. If I were a regular consumer I’d avoid them – their covers have little or no news appeal.
But back to London. The newspapers seem to have lost their way, lost their purpose as a respected source of news and analysis. Sure, news and analysis are still there, but in the background.
My simple view is that newspaper publishers need to learn that size does not matter, they need to drop these supersized editions. Smart advertisers will be telling them this anyway. Newspaper publishers ought to consider on working on the product to lure customers rather than negotiating a bribe. Yeah, it’s the hard road. But aren’t they the most rewarding?