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

Author: Mark Fletcher

I am not a bully, I am a newsagent

Since I published this item about shoplifting here last week, Crikey.com.au has run two stories about my report the theft of a TV Guide newspaper insert in our shop and ABC 702 has run an interview with me on the subject. That’s the public stuff. Privately I’ve received emails slamming me decision to publish the footage. Not one of these correspondents has identified themselves. They say I am a “vigilante”, a “bully” and “disreputable”. They are entitled to their views.

The fact is that the woman in question stole the TV Guide, not only on the day filmed but others. The best way to stop being featured in the video footage is for her not to steal.

By publishing the image I am drawing attention to the high cost of theft in independently owned businesses like by newsagency. Hopefully this will make would be crooks think again before they steal the newspaper, magazine or greeting card. My preference is that I don’t have to resort to publicly shaming people but I’ll do it again if I get video footage of theft.

It is nonsense to label me a bully. I am reasonably protecting my business, my employees and my customers from the risks of this type of theft.

The message for all shoplifters is that more and more stores have camera systems and more business owners like me will publish faces of people caught red-handed.

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Newsagency challenges

Father’s Day sales up 61%

cards-blog.JPGFather’s Day is usually one of the softest of the major seasons in newsagencies: Christmas, Back to School, Valentine’s Day, Easter, Mother’s Day and Father’s Day. This year our card sales are up 61% on last year. I’d say this is due to our moving of cards from the traditional card aisle approach you see in most newsagencies to the front of the store. Our sales data shows a flow on across other departments – all thanks to the card display.

What surprises me about Father’s Day is the lack of significant promotional activity through magazine titles. At Mother’s Day there are all manner of features. This helps sell gift packs and annual subscriptions. At Father’s Day – very little activity.

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Newsagency challenges

Poor magazine distributor decisions (part 2)

mag-blog.JPGWe received four copies of this title. It’s not a magazine yet some bright spark working for a magazine distributor thought we should carry it. Why not – it’s not his/her cash at risk. $19.95 is the cover price. Our GP if it sells is 25% – $4.98. This odd size publication should never have been distributed to newsagents yet it has been. Some will sell and some will be stolen. The problem is that the publisher and distributor have compliant newsagents who take the title, pay for it, carry it for a few months and, some time later, return unsold stock. In the meantime, newsagents lose shelf space and cash. It is a flaw of the magazine distribution system that a title like this gets through and wastes my money and shelf space.

This item and my earlier blog entry from today are but two of many from yesterday’s magazines deliveries which I could complain about. The magazine supply model is sick. Many titles get through and take cash and newsagent attention from the top performing titles. This disadvantages newsagents. The long tail is killing us.

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magazines

Poor magazine distributor decisions (part 1)

calendar-blog.JPGWe received a ton of these calendars from a magazine distributor yesterday. RRP – $9.95. Wholesale – 40% off. The trouble is that we already have stock direct from the calendar company. Wholesale – 60% off. Magazine distributors have enough trouble getting magazine supply right – they ought to not rip cash-flow out of the newsagent channel through flawed calendar scale out. The calendar company gives me longer to pay than the magazine disgtributor. The magazine distributor gives me 30 days.

[Footnote] 04/04/06 My earlier posting noted an incorrect commission and payment timing to the magazine distributor.

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Newsagency challenges

Is this how Australia Post squashes the competition?

I’m reliably informed that Australia Post has told at least one Licenced Post Office operator that their $60.00 a month Australia Post terminal fee will jump to $1060.00 a month if the LPO operator continues to offer the services of Post BillPay competitor Bill Express from the same business.

If the small business owner gives into the Australia Post threat they will lose access to better eftpos and other rates they gain through the Bill Express relationship.

If the story put to me is true, it is another example of conflict for the Federal Government and its ownership of Australia Post. Australia Post, through its 865 corporate stores, is hurting independent small businesses Through it’s LPO network is pressures other small businesses on fees and on taking cheap stationery product imported from China.

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Bill Express

Fairfax CEO says all is well with newspapers?

David Kirk’s speech earlier this week to the Annual Pacific Area Newspaper Publishers Association (PANPA) conference has, as is usual for Australian newspaper executives, a bet each way. One the one hand he says their newspapers are very strong and are here to stay, on the other hand he outlines plans for further investment online. The speech has, in my view, not added much to the conversation about the future of newspapers. I found this week’s article in The Economist on a similar topic more enlightening. Kirk’s claim that Fairfax content sets the agenda is a bit of a stretch. I would like to see independent research on this given agenda setting by leading bloggers in Australia and overseas. Indeed, many stories have been broken online in the last year which newspapers either ignored or missed altogether.

Reading the Kirk speech I feel no better informed. I wish a publishing executive in this country would have the balls to tell it like it is, warts and all – but that might being mean making us too informed.

I am a retail newsagent and the success of newspapers is important to my business. I accept that publishers like Fairfax will pursue opportunities online. I wish they would include their retail network in this journey rather than cutting them out entirely as they have done. I also wish they would be more open about projections for paid newspapers in the future. Events in the US, UK and Europe suggest we’re in for a rough ride. If only similar disruption would pass this country by. The reality is it will not. Publishers and their distribution network need to work closer together on the changes to minimise impact and develop other uses for the valuable resource.

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Newspapers

Caught!

caught.JPGJust over an hour ago our TV Guide thief was back in the shop and stealing the TV Guide from the Herald Sun. Thanks sharp work from our team and video footage from last week we caught her. The thief paid for last week’s paper and returned the insert from today. It was clear from the discussion this is not recent activity for her. She had all sorts of excuses as to why she was taking the TV Guide. None made any sense.

You really have to wonder why people risk their reputation by stealing a newspaper insert.

Every newsagent should be on the lookout next Wednesday for this woman.

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Newsagency challenges

Do you know this woman stealing from us?

fhnvideo.JPGClick on the image and watch this lady walk down the card aisle with a copy of the Herald Sun, remove the TV guide and place it in her bag before returning the rest of the newspaper to the stand and walking out of the shop. This happened in our shop on Wednesday last week. We’re expecting her back today. This time we will be ready thanks to the footage from our security system. (The original we have is much better quality.)

Customer theft is a high cost problem in newsagencies so if you can catch and humiliate someone it is satisfying.

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Newsagency challenges

Emap cuts US FHM staff

Mediaweek reports that Emap has cut staff from its US operation. The story has this telling paragraph:

Insiders say FHM has been putting more resources toward its Internet property, having recently hired four more staffers to support its Web site. At the same time the magazine has been pulling away from its fashion coverage; last year it shut down FHM Collections.

Many magazines will find ways to more valuably engage with their readers online. This will lead to bean-counter comparison of the value of an online reader versus a print copy reader. Some titles will do much better in an online only form. While, overall, I am okay with that, the magazine retail channel needs depth to be of interest to consumers. Too many titles in any category retreating to online only could kill off the category for retail.

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Media disruption

eBay under the pump on price increase

Check out the eBay user forum to see customer responses to their price changes. It’s good eBay provides this level of transparency. It will be interesting to see if they revise their pricing. The Find It classified site which we are launching through newsagents will offer free ads to most of those affected as our pricing is product based and anything under $500 will be free.

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Media disruption

A tale of two magazine categories

I’ve been looking at magazine sales data from newsagencies for many years and have a few stores which act as good indicators of what is happening more widely in the channel. Based on these few stores, the category ascending is Crosswords – by between 10% and 15% same store year on year to July 31. Photography magazines are down 35% in the same period. The trouble is, new photography related titles arrive weekly.

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magazines

The Media Shift and newsagents

I’m pleased to have contributed to this discussion at PBS about the old ways of doing things in media compared with the new ways being discussed/explored. The discussion came as a result of Mark Glaser’s Oldthink vs. Newthink post at his PBS Media Shift blog.

Many Australian mainstream media companies are embracing the shift in one way or another. Radio stations (led by the ABC) are aggressively playing with podcasting; newspapers are bringing more blogger content into their printed and online editions and most have reinvented their online presence; some magazines are leveraging exceptional value from their websites. TV is the slowest of the four media channels to undertake anything which could be called ‘newthink’ – announcing a link to more material at the end of a show is not ‘new’.

Newsagents are not embracing the Media Shift. While some are reinventing their businesses, the vast majority are not. They act more as servants of publishers than the entrepreneurs and business people they ought to be. The Media Shift is impacting newsagents. Newspapers are being sold in more locations, magazines are being sold in more locations, magazine subscription sales are increasing, more stationery is being purchased online.

In the spirit of Oldthink Vs. Newthink and in the context of newsagents I’d suggest, for starters:

Oldthink: Newsagents expect others to create their future.
Newthink: Newsagents take charge of their businesses.

Oldthink: Newsagents being rewarded for following publisher rules.
Newthink: Newsagents being rewarded for sales growth.

Oldthink: Newspapers at the front of the shop.
Newthink: Newspapers located where they sell the best.

Oldthink: Magazine supply being determined by magazine distributors.
Newthink: Newsagents only paying for magazines as they sell.

Oldthink: Newsagents carrying upwards of 5,000 stationery lines.
Newthink: Newsagents carry the top 750 sellers with a rapid fulfillment strategy for the long tail.

Oldthink: Newsagents let suppliers determine store layout rules.
Newthink: Newsagents take control of their own store layout.

Oldthink: Newsagents are paid for home delivery of newspapers according to publisher determined fees.
Newthink: Newsagents allowed to charge fees according to cost of service.

Oldthink: Newsagents manually process supplier accounts – costing on average 20 man-hours a month.
Newthink: Newsagents determine to only trade with suppliers who transact electronically.

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Newsagency challenges

ANF hurts newsagents with ozjobfindit spoiler

The Australian Newsagents’ Federation wrote to newsagents Friday night to clarify their support for the ozjobfindit free employment classified offering. Unfortunately they created more problems for themselves and further confused newsagents. They have not explained why they are promoting the “johnny come lately” ozjobfindit while ignoring our Find It online classifieds model for the last eight to ten weeks.

The ANF statement Friday suggests that Ozjobfindit has been in development for over a year. The reality is that they registered their domain name three weeks ago in the United States. Given our registration here of www.findit.com.au we suspect a registration of such a similar name would have failed. A check of the site suggests this is a quickly thrown together site without a content acquisition plan.

The ANF statement also says that Ozjobfindit Pty Limited is a company registered in Victoria. No such company is currently registered according to ASIC.

More than 1,000 newsagents have got behind the Find It brand and the soon to publicly launch free online classifieds website. That their one national association is part of an online model which confuses other newsagents and consumers is disappointing. One has to wonder about their motivation. One also has to wonder about the quality of due diligence when you consider the lack of company registration and confusion over actual ownership of what the ANF is promoting.

Newsagents are the losers in this. The association ought to spend its time representing newsagents on more important matters rather than trying to harm my Find It initiative for newsagents.

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Newsagency challenges

The Father’s Day window

father-blog.JPG

This is our window display for Father’s Day. There are many newsagencies with similarly professional window displays. I post it here to demonstrate to regulars that newsagents are pulling themselves out of the 1970s and 1980s and creating contemporary window displays for the seasons. When you are in a shopping centre like we are and competing with Australia Post, K-Mart, Big W and Harris Scarfe you have to spend money on visual merchandising.

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Newsagency challenges

Who killed the newspaper?

econ-blog.jpgThe Economist explores this question in its latest issue. It’s good coverage of the challenges newspapers face worldwide. Many will not resonate with Australian readers because our newspaper distribution model and therefore consumption practices are different than elsewhere. The fall in newspaper sales and relevance are not being experienced here on a scale equal to that being experiences overseas, particularly in the US.

While the disruption of the Internet, wireless access and mobile devices have impacted newspapers, one could say that the creation of these devices and the personal content/social media revolution are evidence of natural evolution at work. Maybe people are tired of being told what to think by overbearing publishers or poor quality stories coming from understaffed newsrooms. Maybe newspapers were better when they were run by journalists?

One reason women’s weekly magazine sales are strong is that they are true to their mission. Newspapers have strayed wide from their mission in the last ten to fifteen years and this makes it easier for consumers to look elsewhere.

The Economist report is well worth reading.

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Newspapers

Newsagent association white-ants online ads initiative

ozjfi.JPG

In the nine weeks our Find It online classified offering to newsagents the Australian Newsagents’ Federation has remained silent. Their silence has not stopped newsagents signing on to represent Find In their communities – we now have more than 1,000 newsagents signed up, making Find It the fastest uptake of a commercial initiative by newsagents. The ANF yesterday started promoting what could only be considered a spoiler operation – Ozjobfindit. A smart person would know that promoting Ozjobfindit to newsagents would confuse with the Find It business I have been promoting. Hmmm.

There are some problems with the ANF promoted business: The name the ANF promote in their announcement, Ozjobfindit Pty Limited, is not registered with ASIC; the website, www.ozjobfindit.com, would not pass registration in Australia because of its similarity to our domain name – www.findit.com.au.

The ANF has told newsagents that Ozjobfindit is “a fully owned subsidiary of the Barrington Group of Companies”. The Barrington website does not provide AC N or ABN details to research. A Google search took us to the National Training Information Service and lists an ACN which is not a valid number.

I originally offered the ANF all intellectual property of Find It back in mid 2004, long before any launch to newsagents. The offer was for all IP at no cost – a gift to the industry. The ANF did not act on the offer and in early 2005 I withdrew and further developed the business myself. The ANF could have owned a unique online classified website for newsagents and created what we are seeking to create today.

For newsagents, Find It is a traffic and revenue stream as customers will visit to pay for and even place ads. We treat newsagents as stakeholders by providing profit share and trail commission for customers they win. Ads by newsagents for their business and family can be posted at Find It at no cost.

It is disappointing that the ANF, of which I am a member through my newsXpress Forest Hill business, has been, at best sloppy, or at worst deliberately destructive in an effort to harm my Find It business.

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Newsagency challenges

NSW Government facilitates newsagent rip-off

There was a time newsagents used to get 6% commission for selling transport tickets for the NSW Government. That dropped to 3% a couple of years ago. The new commission for NSW transport tickets is set to be .5% – half of one percent. While there is no stock to carry for the new product, with a transaction taking around 60 seconds to complete, the government and their commercial partners reckon newsagents deserve just a couple of cents for their effort in selling, say, a $4.00 ticket. Not good form from a government trying to demonstrate its small business credentials.

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Newsagency challenges

The planagram kills magazine sales

It’s been two years since a certain group of petrol outlets came under the control of a planagram for magazines. I am told that magazine sales In one of the outlets are down more than $50,000 year on year. This is due to lack of range and some special interest weak titles from one publisher taking space which used to be occupied stronger titles in the same category from another publisher.

The newsagent who used to service the outlet has lost more than $80,000 a year in cash flow. Had the old arrangement been kept, based on the numbers I have seen, all publishers would have sold more than the planagrams deal done at the Head Office.

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magazines

Deadline With Destiny: Newspaper Industry Faces $20 Billion Gap

Ken Doctor of research and advisory firm Outsell has written a research paper, Deadline With Destiny: Newspaper Industry Faces $20 Billion Gap, which analyses the challenges newspaper publishers face thanks to the impact of online and sharp declines in sales due to generational change. Check out the description:

In this HotTopics, Outsell predicts that the newspaper industry faces a $20 billion revenue shortfall over the next five years due to print circulation decline, pressures on print advertising and pricing, and rapid growth of lower-revenue-producing online news media. Outsell believes the industry has less than five years to remake its future.

Across at his Chew Shop blog, newspaper executive Brad Robertson provides a deeper insight into Doctor’s paper:

The biggest change agent for newspapers, of course, is the march of online services. As print declines, online has assumed its position as the fastest growing business in newspaper portfolios, with annual growth rates typically more than 30 percent.

and…

Going forward, as online becomes more dominant, the challenge is for newspapers to use online to make up for their inevitable print losses. That’s easier said than done.

Robertson’s blog is a must read for newsagents and anyone who makes a living off newspapers. I’d suggest the report is worth reading as well but I’m not paying the US$495.00 to read what I know – that newspaper sales will be flat at best for the next three years before they start to seriously fall. Okay, it may take a little longer in Australia because of our useless broadband/wireless coverage we have but it will happen. Newsagents and others need to take this into account in their business planning today.

This report from Ken Doctor is another weather forecast. There is a storm coming. It’s big. It will hit. There is time to be ready, time to lock in customer traffic with other products and even by embracing. This is one reason we are launching our Find It online classified business and why we are partnering with newsagents as our shop front.

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Media disruption

AWW road block success

Our sales for Australian Women’s Weekly yesterday were more than 50% up on our usual first day of sale. We’d like to think it’s because of our road black strategy. See my previous post.

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magazines

Our Australian Women’s Weekly road block strategy

aww-blog3.JPGA check of this month’s AWW shows an improvement over recent issues. It’s reminiscent of content dept from the past. We decided to really push the issue with a table-top display right next to (almost blocking but don’tt tell Tattersalls) the lottery counter. While the display is not as pretty as the pros might like, I bet this works a treat. Early customer feedback suggests that our locally printed A3 draws them in more than the glossy poster since newsagencies always have such posters for magazines.

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magazines

Not another renovation magazine!

Yesterday’s Australian Financial Review ran a story about Sensis’ launch of HomeAtYellow, a website covering all things relating to home renovation. Neil Shoebridge’s article said that Sensis was considering producing a magazine covering the same area. Please no! The last thing Australia needs is another magazine aimed at renovators. The market is well covered by titles specifically aimed at this market and other titles which cross-over into this area.

The AFR article said the magazine would be 164 pages and have a cover price of $8.95. On these numbers and based on an average scale out of five copies – anything less would be useless – the title would be loss making for newsagents. We would make $2.24 per issue sold. However, the size of the magazine would mean that I have to commit two pockets for display. This and the labour involved mean the title would have operational costs of over $6.00 per month. So, we would need to sell three copies to be profitable.

Newsagents provide a low cost distribution channel for magazines, especially new magazines which seek to trade off our exceptional traffic in search of a market. I’d be happ to support new titles but for a premium. For example, if HomeAtYellow does launch as a magazine, newsagents ought to receive 75% of the cover price for the first three issues and 50% for the next nine. This would provide the incentive necessary for our investment in real-estate and labour.

The current commission structure for newsagents provides magazine publisher access to our real-estate, in many cases, on a below costs basis.

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magazines

We are runner-up ACP Magazines’ Newsagent of the Year

excellence award - small.jpgHow proud are we! Our newsagency, newsXpress Forest Hill, was second place in the ACP Magazines Newsagent of the Year Awards last week. We received the award at a dinner for Australia’s top newsagents at the Twin Waters Resort in Queensland. First Place went to Yarrawonga Newsagency in Victoria. Third place wan won by newsXpress Gympie. Williams’ Newsagency and Griffith Newsagency filled out the elite group of five finalists for these national awards.

We were thrilled with our second place, having never won anything for our newsagency business previously. In our decaying shopping centre we reckon we’re doing well with our 22% lottery sales growth, 25% magazine sales growth and 10% newspaper growth. The ACP magazines award is well deserved acknowledgement for our team.

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magazines

Newsagents their own worst enemy

At the annual newsagent trade show in NSW, the state and national associations, which signed a Memorandum of Understanding to jointly represent newsagents a couple of months ago, had separate stands. If the associations cannot unite at something as simple as a trade show, what hope is there for unity at a deeper level? It is no wonder that less than 20% of all newsagents are represented by an industry association. Egos are the barrier between real unity breaking out across the newsagency channel, as it has been for many years.

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Newsagency challenges