January data, for the month so far, in my newsagency is showing year on year sales growth for daily newspapers (The Age, Herald Sun, The Australian, Australian Financial Review) of 16%. During the same period I am seeing the Trading Post down 15%. The conclusion I draw from that is that, yes, print classifieds are dying rapidly whereas print news, in my part of the world, is strong. The strong sales are due, in part, to people not traveling this holiday period.
The holidays are over and magazines are back in business. This week’s New Idea and Woamn’s Day have Princess Mary covers again. There is no doubt she is the new Diana. My sense is that Mary on both covers will push sales of both products – more so than single copy sales. That is people who would usually buy one of the titles will buy the two. More Mary covers please!
Go here and you can see images and specifications for the Sony Reader referred to in my last post. It’s a sexy looking device … one which Sony hopes will take off for books like the iPod did for music.
The world of publishing stands on the cusp of the greatest innovation since Gutenberg. With cheap, portable electronic readers just around the corner, what is the future of the printed book?
So opens E-read all about it at Guardian Unlimited. It’s an excellent article about where e-book technology is at today and where it is likely to be in the near term. Fascinating reading – especially in the context of recent e-paper developments and other technologies challenging the more traditional news and information distribution model.
Booksellers have to be looking at what has happened to music and is happening now to books. Manufacturers (publishers) need to cut costs out of the supply chain to stay competitive and that’s what is at the heart of this technology. Middlemen like retailers are an overhead to be avoided.
Check out eBay Australia and item 7001746442. This is a current issue magazine which newsagents received a few days ago. It has a sell price of $9.95 in our stores. The eBay seller listed the product at a starting price of $4.95 and it’s currently being bid at $10.00 plus postage.
I am curious as to how this seller, located in South Australia, is able to offer a current issue magazine for less than the newsagent pays at wholesale; how they are able to get their hands on current issue magazine stock; and, whether they have more than one copy of this magazine for sale.
Valentine’s Day has traditionally been a season ‘owned’ by newsagents, card shops, chocolate shops and florists. Sure it’s commercial. But it’s also about love and romance. I was surprised to see that the government owned Australia Post is getting in on Valentine’s Day with a promotion. The details are on their website. While there’s no law against it, I don’t need the Federal Government muscling in on a promotion previously owned mainly by independently owned small businesses like mine.
The other aspect of this promotion which irks me is that it is in conjunction with That’s Life magazine. Australia Post does not sell That’s Life in its corporate stores. Magazines are only sold in newsagencies which are Licenced Post Offices. So what gives? I know Australia Post wants magazines for its stores. Is this indicative of a move in that direction or am I jumping at shadows? regardless, I don’t see how Australia Post can justify this activity in the context of the Act under which they operate.
Do a Technorati search for newsagents and all manner of things come up. Unfortunately, close to home I found two blog entries from the last 24 hours bagging newsagents.
Melissa, 37, Brisbane Australia tells us, in part: For two days we couldn’t find any A4 64 page books. That was fun. Visiting K-mart, Big W, Woolworths and Sollies.. to find they had massive stocks of everything else .. except the 35 cent books they had on sale…. The newsagents however are willing to sell them too me for almost $3 each. We will keep walking!
Then I find an entry from De-Anne, 14, Brisbane Australia which says, in part: “omg yeterday was ssoooooo boring i went school book shopping for my brother. we had to go all the way into the city cause no stupid newsagents had the books he needed. normally we get them through the school but when mum went to hand it in they wouldn’t accept it, (long story)â€
What is annoying is that Melissa is wrong and De-Anne is inarticulate. Newsagents are matching Big-W, K-Mart etc on price on most school items. I cannot find exercise books of the sort described for ten times the price at newsagencies. With De-Anne I’d suggest they were looking for something more specialist which a newsagent would only order in as a special order.
While I respect the right of people to blog whatever they like, including junk like this in a Technorati search is unfortunate because you have to wade through a fair chunk of MSN and MySpace hosted crap to get to the better quality material.
On another level, newsagents are being bagged out here unfairly. However, they will not respond. If this were Coca Cola, Pepsi, General Motors, McDonalds or some other major corporation they would be on to these two bloggers in an attempt to get a more accurate spin. Newsagents, being small business and independent will not respond and these blog entries only serve to further pitch that we’re not relevant and we’re expensive.
Even though each of our 4,600 newsagencies in independent we need to respond corporately to blog entries like these and get our spin out there. We are not expensive. We have an excellent range. Customers purchasing Back To School product from newsagencies are doing more for the economy than buying from K-Mart or Big W.
Jeff Jarvis today at his blog, BuzzMachine, deconstructs the newspaper, section by section. He post is an excellent contribution to the debate about the future of newspapers. While it’s written from a US perspective, here in Australia the newspaper sections are the same and the challenges very similar but I suspect our newspaper publishers do not feel the pressure being felt in the US. We are insulated by the size of our marketplace and the lack of true head to head competition. That is not a reason to ignore Jarvis’ opinion or the opinion of other equally eloquent and knowledgeable commentators such as Tim Porter.
In Jarvis’ own words: The point of this exercise is to peel away the layers of the onion that a newspaper no longer needs so it can get to the core of what it really is, what it does best, what it must be to survive and prosper. You can pose the question one of two ways: What do we kill to save money, or what do we kill so we can shift resources to more important things? Whichever, you can’t stay the same and certainly can’t develop new features until you cut the fat and flesh.
Jarvis argues that publishers need to drive newspaper readers online and to reconfigure their print product in terms of content so it is more relevant and cost model so it is a sustainable medium. Once you read the whole blog entry be sure to read the comments.
I wish we were having this conversation about Australian newspapers and that the conversation included newsagents. While News Ltd is in the final weeks of completing its review of newspaper distribution in Australia I’d prefer they put this project aside and engage in a robust review of the future of their newspaper products. Such a review should also include newsagents – the 4,600 small business operators created solely to distribute and retail, newspapers.
The games on competitions, DVDs, CDs, Calendars, Wrapping Paper and every other device being used to gain single copy sales does nothing to address the core issue of relevance which is central to the Jarvis analysis. As one who sells the product and relies of newspaper sales for a key part of traffic to my store, I crave a more relevant product. It goes to the heart of the future of my business and the relevance o the retail channel to which I belong.
Editor and Publisher is also reporting on the Jarvis post.
So, News Corp. and Sensis (Yellow Pages – Telstra) are to duke it out for directory business in Australia. These business partners (in Foxtel pay TV) are going head to head according to reports out this morning. Both rely heavily on their print businesses for revenue. Their customers are more wedded to their print product and, at the moment, so are consumers. But that will change. By taking on Sensis, News is speeding up the migration of directory related business online.
The not unexpected move by News demonstrates that News sees an end to classified revenue from newspapers. It also presents a face of competition while maintaining the status quo on advertising costs. I do not expect News to aggressively pursue Sensis on advertising rates and doing so would not make sense. News wants premium advertising rates as much as Sensis. Only an outsider could upset the directory and online classified business. Remember air travel up until the arrival of Virgin Blue. Despite all the bluster about competition, in terms of ticket prices travelers did not see it. I’d suggest the same will be true here with News and Sensis and directory business. Neither company has the slim operating costs necessary to genuinely bring the cost of directory and classified advertising down significantly.
More generally on the move, News is doing here in Australia what it has been doing globally for the last year – making sure its brand has the necessary presence and access points in the mobile online world.
Reports about the move: The Australian (A News Corp. newspaper)
We have three LCD screens running advertisements in our shop. Many newsagents have at least one. Newsagents do not control this media.
To control the key message I want my customers to see we have installed a huge LCD display (in portrait mode) to display content we create. We’ll feature new magazine arrivals by day and focus on promoting higher margin products which represent a point of difference for us.
Here’s how the unit looks with three of the current ads showing.
While it’s not new for retailers of all sizes to use LCD displays at the counter to promote products, few use a display as large as ours. Already we’re getting customer reaction.
It’s important for retailers to control as much of their leased area as possible and while it’s a low cost to give space to suppliers to fill with their displays, it’s not necessarily good economics. Hence our desire for control of the medium. We spent $2,000 and while we could easily make that selling the space to suppliers, we will make more if we control content 100% and focus on our shop.
The data is from a small sample (6 newsagencies) but from what I’m seeing the disruption in sales through the holiday period is least felt in specialist magazines (woodworking, model, warships etc) and in women’s magazines. That women’s magazines remain a powerhouse for newsagencies is no surprise yet our channel’s weak embrace of women’s magazines is. Newsagents could do more to embrace the category. At the moment they are part of the mosh pit of magazines whereas they could be treated as the jewel in the crow they are through special location; co-location; or other in store features. With new titles due this year newsagents run the risk of more women’s weeklies going moving outside the channel. In my own store any magazine promotion I run kick women’s weeklies magazines higher than all other categories.
The Star newspaper in Malaysia proudly promoted its new daily podcasts on page one of its print edition yesterday. While the podcasts are actually coming from a sister radio station, they are badged as from the newspaper and this boosts the promotion of their brand beyond print and connects them with a younger audience. On the podcasts link page you can subscribe and download previous podcasts. Back in July 2005 I wrote this entry in this place about how podcasting could be used to build the retail newspaper product and help newsagents improve in store marketing. The suggestions are still valuable today. In the meantime it’s great to see The Star in Malaysia embracing the podcast medium.
ID3 Podcast Magazine has been launched. It’s available online and in print. It looks good at first glance – ideal for those playing in the podcasting space or about to.
This article from MSNBC sums up why newspapers the world over hate Craigslist.
It’s school holidays and parents bring their children into newsagencies to pass time. It’s the ultimate since Dad can go oggle at the porn which the kids read the comics and get into everything or mum can read the latest gossip while the kids get into everything. During school holidays newsagents lose more stock due to damage by kids or outright theft than at other times. Regular customers, if they dare venture out for a bit of shopping, have greater difficult moving around the store as kids, occasionally, run riot.
While I’m pleased to have a shop full of people I wish the ratio of browsers would not increase so dramatically during holidays while parents, aunts, uncles and grandparents bring their kids to my store and other newsagencies to pass the time of day. I’m a childcare provider with something for everyone. Newsagencies are the one shop the family can browse away from each other and all get satisfaction.
One lady yesterday read four magazines, telling her snotty daughter that mummy was working out what to cook for dinner. Mummy was not. She read her stars in each of the four magazines and then some gossip. While mum did that her child wiped her snotty nose on a kids magazine and then ran around the magazine unit making a right mess. Mum eventually scolded her and left the shop without purchasing anything.
Do I scold the mother, the child or myself for not being tolerant? Ugh! It’s damn frustrating seeing people show so little respect for your property. One time a kid urinated. Mum saw the mess, took the kid by the hand and left. If my cat urinated in my house I’d rub her nose in it.
I’ll be glad when holidays are over and our regulars venture out of their caves again. When it’s safe.
NEC is in the mix pursuing electronic newspaper opportunities with its organic radical battery (ORB) as reported at tgdaily. It’s very thin, light and bendable.
Plastic Logic has fabricated what they claim to be the world’s biggest flexible organic active matrix display reports editorsweblog (the image above is from their website). The display consists of a flexible, high resolution, printed active matrix backplane driving an electronic paper frontplane.
Once you add good power and the ability to be online all the time you have the newspaper of the future.
The experts at The Age continue to cut back newsagent supplies while ensuring that cinemas have plenty of stock to sell. Every day at the moment it’s a battle to get supply figures to a sufficient level to enable you to have stock all day. Yesterday I was at a local cinema and at 5pm they had at least 50 copies of The Age there for anyone to take. Besides the frustration of the daily battle for retail sock there is the question of how the free product is handled from an audit point of view but then I’m not supposed to ask questions about that.
Uncensored arrived on Australian newsagency shelves this past week. It’s a New Zealand magazine which the publishers and distributors want placed next to The Bulletin, Time and Newsweek.
I don’t like this title. It is the ultimate conspiracy theorist’s magazine. The production quality is poor and the writing quality worse. I’m not proud to have it on my shelf. To want it placed next to the other respected news and current affairs titles is an appalling decision by the publisher and distributor. The only product advertised in the magazine, besides a sister magazine and some dubious books is an ad for MAGNA-RX+, the “world’s #1 best-selling all-natural male performance formula”. Yep, a quality publication.
Uncensored is a perfect example of poor product which should not, in my view, get distributed in Australia. That said, when you look at the numbers you can understand why. Magazine distributors receive a fee to circulate product like this through the system regardless of whether the title sells. Newsagents, on the other hand, receive payment only if the product is stolen. Of the $9.95 cover price, I get $2.48 if I sell a copy. I receive three copies and have to hold them for a month. I have been invoiced for the three this month and have to pay by the end of next month. I return what is not sold and I get the credit in March. So from a cash flow perspective, I’m out for at least 30 days. The display pocket the product takes costs me $3.00 per month and the title will use around $1.00 in labour for the month. So, I need to sell two copies to break even.
Uncensored is being distributed because the magazine distribution model in Australia allows titles like this through the system as long as the distributor is paid a fee for their efforts. That newsagents receive nothing and therefore carry the risk is a shameful big business versus small business imbalance.
I don’t deny the right of the publishers of Uncensored to publish this magazine. My complaint is with a system which makes my small business a stakeholder in spreading this trash. If they want to use my store they should pay and pay handsomely. I have good traffic and they want to access that. So they can pay. To leech off a system which makes me invest in their business and ideas is appalling.
I’m going to return Uncensored this week and claim the credit this month.
You can find out more about Uncensored from their website.
Musicland, which operates an 800 store strong music retail group (Sam Goody and SunCoast) in the US filed Thursday for Chapter 11 bankruptcy protection. Forbes has the story.
Newsagents in Australia face similar challenges. More news and information is being accessed online. We are also facing tougher competition from other retailers adding to their news and information product offering in store. Newsagents need to respond with more cost efficient magazine and newspaper space and stock allocation. This means newsagents need to push back on some suppliers of poor performing product. We also need to extend our product range outside our traditional and into better margin product which have more control over. If we don’t do this our stores face bankruptcy like the Sam Goody outlets.
This is one of the reasons I became involved with newsXpress last year and have taken a financial interest in the group. They are taking my newsagency beyond the traditional and adding margin.
The Age is promoting Summer Crosswords Vol. 2 and Sudoku Vol. 3 for $12.95 each or $19.95 for the two. Their advertisement says the books are available singly from newsagents. Unfortunately newsagents cannot offer the dual pack. Also, newsagents have over 200 other crossword and Sudoku titles for considerably less than the price of these. If the folks at Fairfax really want to move these products then need better pricing and they need a consistent price for the consumer regardless of their purchase point. They also need a better retail story. This means providing newsagents with more point of purchase display materials.
Vodafone has written to newsagents this week advising, formally, of the 37.5% commission cut on retail sales from 11% to 5%. In part, this letter says:
“Vodafone has an on going commitment to providing great value to its pre-pay customers through its value bundles and cap plans. This commitment has seen massive growth in the prepay category, including the sales of Vodafone electronic recharge vouchers.
Due to the cost of providing this value to customers, Vodafone hereby gives notice of a reduction to the retailer margins on the sale of electronic recharge vouchers.â€
It is nonsense for Vodafone to make out that newsagents need to help cover the costs of providing value to customers. From what I understand they have not asked Coles and other majors to share the burden. If I am right on this, the Vodafone letter to newsagents cold have been something like:
Vodafone is in a battle for market share. It’s a tough fight. To compete we have had to cut prices and we want you to carry that cut for us. We can’t ask Coles to carry the cost of the price cut because, well, they are Coles. They would refuse to carry our product if we don’t give them 16% commission so we hope you understand. It was you or them so we went with you. Thanks for being a sport and accepting this 37.5% commission cut. Maybe you could pass it on by cutting employee wages or asking your landlord for a reduction in rent. Anyway, thanks for copping it on the chin.
Vodafone’s treatment of its small business retail channel is appalling on this issue.
MediaPost is reporting that the US CBS network is developing content for delivery over mobile phones. These three to five minute episode programs represent another major media company going outside its traditional supply chain in pursuit of consumer connect. Last week it was News Corp. and its video on demand launch (at the same time as DVD release). Now CBS creating content which is mobile specific.
Newsagencies are a supply chain created specifically for the delivery and retail of physical news and information product. Publishers who supply us will (more and more) play in the online and mobile spaces. Our 4,600 stores need to be pursuing strategies (which we control) today which provide us with relevance in this world.
PaidContent reports that the Chicago Tribune has announced that it will cease publishing stock listings except on Saturdays. They are introducing a phone in service for people who want quotes – talk about a step back in time – as well as promoting online access. The paper points to the impact of the Internet as a reason for the change. Crosswords, Sudoku and quizzes are on the Net. Will they drop those from the newspaper as well? Newspaper customers are newspaper customers and a publisher pushing their customers online must have a plan.