Light blogging this week
I am in London on business and then to Vienna later in the week for the IFRA Beyond the Printed Word Conference.
Drowning in porn magazines
I’m helping a newsagent chase down a cash-flow problem and have identified porn magazines as part of the cause. Titles such as Club International, Exotic Asian Pack, Playboy, Men Only, Weird Sex Letters and Best of Readers Wives are cash-flow negative for as far back as I can see.
Blind freddy knows that the printed porn market is in rapid decline, everyone it would seem except the publishers and distributors who use the low/no cost newsagent network to promote their brands.
I’m not a prude, far from it – these titles have to go. The data shows that newsagents are oversupplied with porn titles. This same data is available to the magazine distributors. There is no justification for the quantity or range currently supplied to all but a few newsagencies.
The flip side of the cash-flow work for the newsagent I am working with the extraordinary contribution of the major titles: Woman’s Day, New Idea, Better Homes and Gardens, NW, Australian Women’s Weekly, Who, TV Week. This is where is makes his money on magazines yet it is the non top sellers which drain labour, real-estate and cash.
Sensis launches Autotrader classifieds title nationally – chasing browsers or buyers?
I am curious about the move by Telstra owned Sensis to bring their West Australian title, Autotrader, to the rest of the country. When sales of other classifieds magazines are in deep decline and the Sensis flagship print title Trading Post is flat in some areas and in free fall in others why bring another print classifieds product in? Given the focus on dealer ads, I don’t see this as a print only play. Autotrader is more likely to be an extra value offer to online advertisers. List in Yellow Pages and other Sensis online properties and get into Autotrader as part of the deal. It makes sense to me – being online and in print.
For newsagents Autotrader is grabbing space on crammed shelves and using the low cost newsagent channel to give the title retail presence. I suspect that Sensis knows what newsagents know – the vehicle section of a newsagency is the most popular for browsers. Blokes spend anything from ten minutes to an hour browsing the magazines – classifieds magazines especially. You see them look through and note down contact details for cars which interest them.
The cynic in me says this is a browser play by Sensis – a shopper browser play. Getting into newsagencies they get Autotrader browsed. I doubt you’ll see Autotrader in petrol, convenience and supermarket outlets because in those places people don’t browse magazines.
Newsagents ought to be paid for real-estate and labour invested in titles which do not generate a profitable return. Sensis ought to compensate newsagents for making their advertising successful without the need for a punter to purchase the title.
Newsagents allow this situation by not being commercial and placing a value on their real-estate and labour. Good luck to Sensis for exploiting this.
Flooding in communication
Adding up faxes, emails, phone calls and visits, more than seventy unexpected unscheduled time consuming requests of this newsagent this week. Seventy. On top of that is the usual work central to being a good newsagent. The requests ranged from a request to do a special display to a request for complex data. Every one took time which, generally speaking, was not allowed for in the staff roster.
While I am happy to support any supplier supporting my business, it is imperitive that ad hoc requests are more structured and and made with consideration for the time being invested in newsagencies across the country.
Newsagents need strong open and effective leadership
Crikey yesterday carried more of my earlier story here about the mess going on within the state and national newsagent associations. The battle between the states and the national body is part personal between a few men, part about leadership and part about good governance and transparency.
Newsagents have the structure and leadership they have voted for (or not as the case may be). The reality is that unless all parties find a way to work together and demonstrate respect for each other, the channel will be lost as there will be no national voice on the issues that matter and that will eliminate the strength of any state based voice.
Newsagent associations Boards agreed on a national unity strategy just a few months ago. All Directors would be well advised to revisit what they agreed to and to reaffirm their support for this. This means putting the personality politics aside and focusing on the needs of the newsagents in the trenches doing it tough every day. Good leadership is what is really needed and that will only come with fresh blood at the Board table.
UPDATE: (9:15PM) The ANF announced this afternoon that it has withdrawn from the agreed co-existence model with the state associations in NSW and QLD. The challenge is how all stakeholders react from here. Newsagents need strong visionary leadership. They have not had this to this point.
Newspapers and magazines in India
Good story in Time Magazine about newspapers and magazines in India.
Leveraging the Lottery superdraw traffic boost
In the majority of newsagencies around the country traffic is up this week thanks to the $21 million superdraw. I know in my own situation, today will be up between 10% and 15% and tomorrow at least 20%. This is one of the six or seven planned superdraws each year, meaning that it would be easy for other suppliers to build offers around this traffic boost. That’s what I’d like to see in 2007 – other suppliers using knowledge of the superdraw dates to create additional revenue opportunities for themselves and newsagents. The bonus traffic is there so why not make use of it? We have offers ourselves but something driven by a publisher would be better as it connects more appropriately with the newsagent offering.
Nicole queen of the weeklies
Sales this week of New Idea and Woman’s Day shold confirm the pulling power of Nicole Kidman. While other celebs rise and fall in pulling power, there is nothing like a Nicole Kidman cover to deliver strong sales. It’s been a strong first four days of this week – especially people buying both titles.
Find It rated in Top Web Apps in Australia
Our Find It online classifieds offering is rated among the Top Web Applications in Australia in an article by Vishal Sharma. We’re in good company. I particularly like gnoos, The Podcast Network and Perth Norg. Perth Norg is a brilliant Perth based citizen journalism site.
Greeting card sale graphically highlights the successful categories
Our landlord gave us ten days to quit the temporary location of our second shop in advance of opening in a permanent location next month so we decided on a sale. Below is a picture of the main card aisle with one day to go. The image graphically illustrates the most sought after card categories. The empty pockets make me wonder about the cost of real-estate and stock on the pockets with stock remaining.
If cards are not selling when they have been discounted 30% and then 50% then one has to question whether we should have them in the first place. Of course, every retailer wants every item to be the fastest mover. I appreciate that is not practical. However, the many empty pockets in the women’s section versus almost no empty pockets in the men’s makes me want to cut back on men’s titles. Cards stock needs to turn at least three times a year in a shopping centre to pay for the real-estate. The titles left after steep discounts are the titles not performing.
Tattersalls pushes online sales over its retail network again
Received this in an email from Tattersalls today promoting their online network ahead of their retail network for this week’s $21 million draw. I would prefer that I could click a link in the email to find the nearest outlet.
Talking newspapers down
Courtesy of Romenesko is this exchange between Matt Lauer of NBC’s Today show and Jack Welch, discussing a possible purchase of the Boston Globe. The emphasis is mine.
Matt Lauer: “Newspaper sales are down 2.8%, the end of September, according to the latest study, and yet the word out on the street is that Jack Welch wants to buy the Boston Globe. Isn’t that like buying an Edsel factory right now?”
Welch: “It’s one way of looking at it, but we don’t see it that way. We see all kinds of opportunity. But look, we’re in the very early stages. Matt, if we were going to buy a factory at that price, we wouldn’t have all this ink. If you fool around in the media, the ink gets (exposed).”
While it’s a good answer from Welch, it’s Lauer’s question which gets the attention. Newspaper executives will be angry and frustrated at the Edsel comparison. In isolation it could be ignored. But it’s not an isolated view. Outside of Australia many are asking questions about the future of newspapers – not suggesting they will disappear but that the model will radically change. Take the story Newspapers, Nor or Never by Dave Morgan at MediaPost. The opening paragraph sets the tone:
IT’S MAKE-OR-BREAK TIME FOR NEWSPAPERS. Over the last couple of months, I’ve spent a lot of time talking to newspaper companies about their digital futures, particularly when it comes to advertising. While I’ve had these kinds of discussions with them for many, many years, the current plight facing the industry has made these discussions take on an immediacy that I have never seen at any point in the past 15 years. They know that their future is now and that they had better figure it out fast. They know that their chance to dominate local online advertising as they have dominated local offline advertising is looking slimmer and slimmer. Google, Yahoo and Microsoft (GYM) are all lining up to take a piece of the $100+ billion local ad market as much of it shifts online.
We’re insulated here in Australia because of tight media ownership and because of a historically strong newspaper distribution network through newsagents. The distribution network is consolidating and along with that customer ‘ownership’ is moving from the newsagent to the publisher, from a local connect to a faceless call-centre connect. This will, in my view, make customers more fickle and put us close to the US situation – hence the value in understanding the challenges newspaper publishers in the US face today.
It is appropriate the newspaper publishers urgently source revenue online. Likewise, newsagents need to source traffic and revenue from non traditional sources. They can no longer rely on guaranteed traffic from newspaper sales.
Is Lauer’s question valid? Is a newspaper company like an Edsel factory? No, not if they are racing online. Newsagencies, on the other hand … now that’s a different question.
The Age masthead defaced, defiled and demeaned again
The Age today has another stuck on ad. This means more trash in the streets, more trash at newsagent sales counters and more copies of the paper being ripped when part of the front page comes off with the stuck on ad. I wonder if any of the resulting frustration translates to frustration toward Hewlett Packard, today’s advertiser?
Local news and how Australia is behind in the game
Great story in Fast Company about Rob Curley and his leadership in the hyper-local news stakes. Curly understands what local communities want and is using the Internet to deliver on that. He is makes content which is indispensable to its community – like any local newspaper. I reckon that local news is fading in Australia with centralised newsrooms and fewer resources closer to the action to report local events from a local perspective. Compared to what Curley is doing local newspapers in Australia are dinosaurs. The Fast Company article is well worth reading.
Government disgrace over Australia Post and small busines policy
I’ve seen a letter from Communications Minister Helen Coonan to a colleague last week in which ducks and weaves about the impact the Australia Post is having on small business. When queried about the impact of the 850 or so Government owned stores, Coonan talks about Australia Post’s 3000 licenced owned post offices and completely ignores the government owned stores.
The government hides constantly behind the privately owned LPOs which it is the government owned stores which pull in the big dollars. It is the government owned stores which are sucking millions of dollars away from the newsagent channel. My own store is a perfect example. The government competes with me for the sale of stationery, calendars, greeting cards, ink and toner – none of which relates to, in my view, products and services allowed under the Act.
This government needs to wake up to itself. Australia Post is using the respected Australia Post brand and its government ownership to steal business from small businesses like mine. My profits are down as a result. This impacts the tax I pay. It impacts how many people I can employ.
The lack of interest by the Government on this matter is a disgrace.
Selling the newsagency after just three months
I was talking yesterday with a newsagent who has decided to sell their business. Nothing odd about that except that they have been in the business for three months. They say that the lack of control they have over their business is the reason. While I have seen this before, this instance is surprising. This person has successfully owned and operated retail businesses previously. They’re cashed up. They’re pro-active. It’s what they say are uncompetitive magazine rules and lack of control over core business activity which they hate.
Their newsagency competes with five magazine outlets nearby – three petrol/convenience and two supermarket outlets taking just the top selling magazines. He’s cool with competition but would prefer fair competition where he can choose his range as easily as his competitors. While he has sought to cull magazine titles to a more viable level he feels helpless to effect fair change in the supply model. Hence the decision to leave.
Any assessment of the magazine supply model would say that newsagents are disadvantaged. We need an easier way to control what we receive. We need more accurate scale out of new titles. We need fairer financial terms for titles which are to stay on the shelf for more than a month.
Unless the magazine supply model changes, more new newsagents will exit early and the channel will be the loser.
I appreciate that the supply problem is not just to do with magazines, however, magazines soak up the majority of the cash – I write cheques for more than $40,000 a month for magazines and half that is for product I return. Fix the cash-flow crisis and you create happier and more business focused newsagents.
Newsagents eat their own again
Just a few months after signing agreements to unify newsagent associations, the national body, the Australian Newsagents’ Federation, had done a dummy spit and told newsagents in NSW and QLD to quit the state bodies and join the national body. The ANF says the NSW and QLD State Associations are duds. I’d copy the dummy spit email here if it were not, in my view, defamatory. In the same email, the ANF announces that ANF CEO, Rayma Creswell has resigned because of “her inability to continue to work with industry Associations representing NSW and Qld”.
The road to unified national representation of newsagents has been long and rocky. Every day the national and state associations continue brawling is another day of opportunity to those who compete with newsagents. The communication from the ANF could have been more professionally written and therefore more likely to be read and digested.
The ANF and state associations have signed agreements which lay out how they are to co-exist. Newsagents would be well served if all parties adhered to the agreements. In the meantime, the ANF Board could consider hiring a CEO with solid national association experience.
OK missteps in launch
It’s the second week of OK! in its weekly format and if other newsagents are like me the magazine arrived without posters. This means we won’t allocate promotional real-estate to push the title. Compare this to Famous, the Pacific Magazines weekly – this week, as usual, I received 6 posters, enabling my team to build a good display for the product.
Halloween now an ‘official’ season
A year ago at newsXpress we decided to invest in Halloween this year in terms of marketing collateral for our stores. Some people thought we were nuts and that our planned group-wide $25,000 – $35,000 investment in marketing collateral was nuts.
Patting ourselves on our backs it’s pleasing to see activity at Movie World on the Gold Coast, Australia ZOO and in Better Homes and Gardens in a Halloween feature. The newsagent connect is that we sell materials for decorating the home, school or workplace and we have a range of Halloween products such as cards that light up, severed hands, candy baskets, cobwebs, witches brooms and face masks. In my own shop we have not encountered one negative customer comment.
Disclosure: I an a Director of newsXpress, a national group with 95 newsagent locations.
Abusing the end of the month
I have now seen data from enough newsagents know that we are overloaded in the last week of the month with magazine stock. In one case, one supplier provided 37% of all stock in the last week. The problem with this is that the newsagent had no idea this was coming because titles were either one-shots or imported. The newsagent turns up to work last Wednesday, sees the problem for the first time. They have 30 days to pay for this stock bonanza. What other business operates like this – hitting small business within five days of the end of the month, all so conveniently within the billing cycle.
Newsagents are in the middle of a cash crisis and unless there is fundamental change in the magazine supply model – such as loading the last week of the month – more newsagents will close or exit the channel early.
Through my software company we have given newsagents a reporting tool to track the cost of end of month overloading. Hopefully some will use this to prove the behavior I have described.
We turned away 50 customers today
The Herald Sun is running an excellent CD promotion over five or six weeks. Today, due to lack of supply of the promotional CDs 50 customers who came into our shop wanting to buy the CD turned and walked out. It’s the first thing they ask. We know from experience that if we say yes, at least half grab the CD and make other purchases. The knock on effect of lack of supply is significant. Beyond the 50 lost customers another 60 ordered the CD on backorder. This takes a couple of minutes per order – another significant cost for micro margin product.
I love the promotion. Blind freddy would have known that it would be exceptionally successful. I wish the scale out was more appropriate to need. In my case, being open all weekend, I need more than a high street newsagency.
Halloween a great success
Halloween has worked exceptionally well for us. Three days to go and we’re out of all but a few items. We have used the promotion to broadern our offering in toys and allied items. What’s made it easy for us is the marketing material from newsXpress. Wandering through my centre today and with a fair perspective, ours is the best display – the photo only shows part of the story. There is no doubt that the theatre of Halloween works in retail.
Is POS Solutions the leader in magazine management facilities for newsagents?
POS Solutions, in marketing material to newsagents last week, claims that their POS Browser software is “a leader in magazine management”. I am not sure how they measure leadership. To me it means providing state of the art facilities which help newsagents achieve better commercial results from their magazine category. This means better supplier interfaces, better stock control, better over and under supply warning facilities and better business performance tracking. Oh, and being first to market.
Newsagents switching to my company, Tower Systems, tell me they switched because they want better magazine management facilities than they had in POS Browser.
POS has only recently passed industry compliance tests – two years after their competitors. Sadly, they have left, by my estimation, 70% of their users behind since the cost of moving from the POS DOS software to the POS Windows software is prohibitive.
Are the POS claims to be “a leader in magazine management” accurate. In my view they are not. POS Solutions is not a leader in this or any other area of newsagent operation.
POS Solutions names newsagents in their brochure – I wonder how they feel about the software they use? How do they feel that they have been held back for more than a year from sending magazine returns data electronically? I know from my own newsagency that this alone delivers hundreds of dollars in benefits a month.
Disclosure: I own Tower Systems.