Author: Mark Fletcher

Further to my earlier post on this Fujitsu has just announced a wireless version of e-paper which will be available commercially to consumers in around a year. They are saying it could be 2007 but with the scramble by several major companies in this space now the pressure to be first to market is considerable. The applications are from mundane price tags in stores through to content such as magazines and newspapers.

The Guardian reports on 290 news vendors in Paris, who work 16 hour days for an average A$2,000 a month, staged a historic six-day strike over low pay and working conditions last month.

The story ends with this quote from one of the newsagents:

“At least half of what we get, sometimes up to 80%, is unsold. It’s madness: we have to be allowed a say in what we stock. That’s only common sense,” said Mr Maignan. “I’m in the middle of the financial district, so I sell a lot of business magazines. Colleagues in the suburbs won’t sell a single one – but they’re still given them all.”

These French newsagents are similar to Australian newsagents. Their channel was created by the publishers. While publishers have put their product elsewhere in pursuit of sales and moved content to new media in pursuit of advertising revenue, the channel they created has starved. While the publishers owe the channel nothing, there are opportunities for engagement which could benefit the publisher and the channel.

Publishers will bemoan the vast difference in compliance among newsagents as a reason for not engaging with the channel. There are ways this can be and ought to be addressed. All it would take is one publisher to pull back from going everywhere and focusing on the newsagent channel or even part of the channel in pursuit of a more viable model for both players.

To allow slow decay helps no one.

The Guardian story is timely and should encourage talks between publishers and proactive newsagents.

The blessing from the “bishops” at Apple was all that was needed. Mainstream media players across the globe are doing it and they are reporting about whereas for the first year of the life of what is becoming a great advertising channel they, in the main, ignored it.

When a something new makes it ot the pages of USA Today you know it’s something the punters will understand and want to know about. Unfortunately this report suffers from the USA Today affliction of shallow reporting.

On ABC Radio National this morning, Fran Kelly had a story about podcasting with some depth. Good coverage of the development in mainstream media in the US and an interview with a Nine Network executive to give a local perspective from a television point of view.

I’ve heard publishers bemoan the lack of respect and effort their products receive from newsagents and others in the supply chain. They argue that newspapers generate the most traffic yet receive the least attention. They wonder what happened from the halcyon days of newspapers (any time up to the late 1970s).

Besides that society has changed (television, mobile phones, working hours, recreation opportunities), newspapers are not what they used to be.

Until recently the news was the thing. Today news, in many newspapers, news has taken a back seat and there are consequences for that. Getting the retail and distribution channel to promote puzzles, games, CDs and all manner on non news devices to boost sales may give the circulation kicks necessary to achieve poor audit results however I doubt that these tricks create loyal customers.

Newspaper customer loyalty is rooted is trust for the masthead and this is earned through coverage. That does not mean high brow. It means news. The tabloids could be more about news than trying to run the political agenda or paying for gossip stories. Sometimes newspapers offer a consisted and strong news story from their front page but not often enough.

All it takes is one publisher to lift the ante, declare a puzzle and competition free zone and focus on creating much better content value. The supply chain should respond with more effort as a result of greater respect and this should result in sales.

Okay, that’s fairy land and the current market forces dictate how publishers react.

My point is that by pursuing all these non news strategies publishers are inviting their supply chain to be equally confused in their representation of newspaper product.

I’ve been ranting here for a while about the need for newspapers to embrace podcasting if they want to maintain and even increase the connect of their brand with consumers. Steve Outing discusses this topic in a good post today at Poynter online.

Newspaper journalists and columnists could take us beyond the page and use podcasts to build respect for the masthead. There is an opportunity for newspapers to reclaim ground as providers of trusted and respected news and analysis content and podcasting can provide a transparency and depth words on the page sometimes cannot offer.

As part of the newspaper distribution and retail channel in Australia I’d also like to see podcasts so that I may provide added value to the newspapers I sell in my shop. If I can broadcast, for example, the audio (or part) from an interview it provide more reason for people to visit my stores and others in my channel. Plus is enables browsers in my shop to hear and this cold/should lead to a sale which otherwise might not have happened that day.

We in the supply chain ought to be taking this to the publishers otherwise they might not find the opportunity on their own.

Is it a world first? Will it take off elsewhere? Who knows? It’s real though. Ningbo Daily Newspaper Group and Ningbo China Mobile in China have launched what they are calling a mobile phone newspaper. Customers will be sent stories, images, video and sound.

Those of us in the newspaper supply chain business will watch, learn and plan – if we’re smart we’ve been doing that for ages already.

Guardian Unlimited (from Guardian Newspapers) earns early adopter status for their decision to launch a mobile phone based crossword game as covered by Media Bulletin. Access will start with a free trial and then move to a paid model with costs reportedly to be 50p per day.

Are they a newspaper publisher or a games publisher? Content is content I guess and anything to accompany advertising which punters will be loyal to is all that matters. I can’t help but wonder about the brand. I mean, what does it stand for?

As others launch into this space and push their brand outside the traditional news it will become easier for pure news outlets to focus on news and analysis. Everything old is new again.

Plenty of reports (including this one from the Denver Post) about the Google, Hearst and Goldman Sachs in Current Communications Group – a company leading in an area of technology called broadband over power lines (BPL). If hopes/plans are realised, BPL would allow electric companies to become an alternative to the cable and telephone companies providing high-speed access to the Internet.

This will be interesting to watch.

There has been considerable discussion amone newsagents in recent weeks that they ought to purchase magazine distributor Gordon and Gotch from PMP.

I am not aware of PMP having any desire to sell Gotch and even if they did have such a desire I would suggest that newsagents taking ownership would be problematic for several reasons:

Our ownership of one distributor might present problems in or dealings with others.

Newsagents have had sufficient difficulty agreeing on national representation strategies for the last 20 years to suggest that we might have challenges agreeing on strategies for a national distributor.

Distribution companies are complex cans of worms which require specialist skills beyond what many newsagents would be used to.

Frankly, we’d be out of our depth.

If we had the kind of money (or could find it) necessary to purchase Gotch then I suggest that we would achieve a better return being invested in future traffic generators. Magazine sales will continue to ebb and flow. There are many new revenue opportunities that newsagents investment could bring to our channel. This is where I see a bright future.

Fairfax has announced this morning the purchase of RSVP. Publishers are slower in Australia to purchase online players when you consider all the activity in the US over recent months.

The deal is important for Fairfax as it shows them to be a buyer, having stalled previously with seek.com.au (if stories on the street are right.

The big question is what is next? RSVP has to be but a small step.

If I offer a discount for stationery in my shop it’s me offering the discount. Off the bottom line. Likewise, if I produce a brochure offering the discount I pay for it myself. And, I have no exclusive product traffic generators I can use to leverage interest in the discount offering.

Compare that to our government owned Australia Post. They are offering 10% off all stationery purchases between July 1 and August 31 this year for purchases of $50 or more as long as you have one of their brochures.

Okay, so that’s a fair business practice except that it’s my government competing against me. My shop is directly opposite one of the participating Post offices.

My real gripe with this promotion is that it is promoted through a colour flyer which is 80% about postal products and that means the monopoly postal side of the business probably paid for the flyer. This is a government commercial enterprise benefiting from its government sanctioned monopoly – to the detriment of independently owned small businesses.

The Australian Government ought to divest itself of all Australia Post retail outlets to independently owned small businesses.

The latest issue of Circulation Management is reporting US ABC audited circulation data for business and consumer titles and there are some interesting results.

PC Magazine Digital-only subs of 119,771 for 2004 compared to 19,256 in 2003. Total qualified circulation in 2004 was 926,276 compared to 968,274 in 2003. Most of the digital edition growth has been achieved without cannibalising the print edition.

Cosmo Girl! Digital-only subs of 80,356 for 2004 compared to 41,076 in 2003. Total qualified circulation in 2004 was 1,380,320 compared to 1,365,735 in 2003.

Barrons Digital-only subs of 1,617 for 2004 compared to 725 in 2003. Total qualified circulation in 2004 was 300,040 compared to 295,706 in 2003.

Circulation Management lists the TOP 15 titles. I have chose these three to demonstrate diversity of titles and the significant growth achieved between them. There have been a couple of falls but there are reasons for that.

Remember, this is data from 2004. With the significant enhancements to digital delivery of magazine content this year and stronger competition between the platform players one could reasonably expect digital only circulation to rise. They have been focusing on improving the consumer experience and the results are stunning.

The growth in Cosmo Girl! is particularly interesting but not that surprising given that it’s from the demographic more attuned to computer and wireless delivery than most.

Digital delivery is yet another space to watch for newsagents and others in the news and information supply chain – particularly in the fringe subject area, titles outside the top, say, 200. My feeling is that the small and independent publishers will move to the digital model faster than mainstream publishers because of cost savings. For a fraction of today’s real world costs, they can get professionally presented content including paid advertising into subscriber hands.

While the newsagent distribution model puts titles in front of prospective consumers, it comes with a cost. With newsagents pressuring on returns achieved from their expensive retail real estate, the metric for small publishers could swing with them forsaking eyes for dramatically lower circulation costs.

Newsagents, publishers and distributors ought to be talking about these issues and navigating their way, co-operatively, though the changes digital delivery and other technology changes are bringing to the channel.

A week on and the Apple support for podcasts through iTunes has dramatically increased the coverage of the technology in mainstream press. There have been many stories over the last few days with predictions of how far this technology will reach including this one from the BBC. A definite tipping point I’d say.

While some in the newspaper industry are working on future models and even adpoting new technologies in pursuit of new audiences, others continue to spin that all is well. This article has been doing the rounds and has made its way from the Meadiweek in the UK through to Asia.

While I agree with some of what is written plenty is nonsense and it’s a puff piece to stop or slow consideration of newspapers not having a future.

This story in yesterday’s Australian is one to warm the heart of businesses competing with the online space – especially online news and information sources. Network outages like those experienced by Blackberry users for more than 24 hours is enough to have you reaching for a tin can and a piece of string.

PS A smart marketer would use this to compete with the Motorola advertisement on TV at present.

So, the Japanese parliament has decided to sell off the country’s post offices and postal service. For the Australian perspective there’s a report in the Sydney Morning Herald. Alternatively there is this report from the Japan Times.

While the situations between Australia and Japan are dramatically different, I hope that this decision might at least put the Australia Post retail network on the radar as a business to be privatised – but only by selling government owned Post Offices to small businesses or individuals.

I’ve made no secret of my view that the Federal Government has no role in owning retail businesses which compete with independently owned small businesses like my newsXpress store at Forest Hill in Victoria. Having them competing day in day out on stationery, greeting cards and some services when newsagencies were in those spaces first is offensive. I cannot match the mgiht of Australia Post as I don’t have a posdtal service monopoly to force people into my shop.

This is why the Government needs to get out of Australia Post retail. They enjoy a foot traffic guarantee and leveage that into other lucrative business.

So Senator Coonan, look at the Japanese story as it unfolds, count the dollars it unlocks and consider privatising the Australia Post retail network as an ideal way of demonstrating your government’s support for small business.

A few geek friends have got together and have started podcasting about technology, mobility and their lives. They two efforts so far are not the best podcasts in the world nor are the most enlightening. However, you get a sense for their connect with this technology. It left me with an understanding of how important the openness and flexibility of podcasting will be to Generation Y. No wonder they’re the early adopters.

Podcastingnews.com is quotes in-stat and claims: The market for both hard disk drive and Flash-based portable audio players is expected to reach more than 104 million units by 2009, up from 27.8 million units in 2004.

I reckon we’re going to find that number low in hindsight given that phones and all manner of devices will provide these capabilities. The demand for this technology will explode. And decisions such as that by Apple – even though they are being corporate and limited in the podcast access they facilitate – will push the explosion.

Mobility is the game of this generation and businesses understand that and are responding. Plus businesses can see the economics working. They can make money so it will happen.

I’m in a business challenged by this since the money I can make from content delivered digitally on mobile devices is fractional compared to my current model. I’m not alone. There are at least 4,600 small independently owned businesses like mine in Australia. We rely on the old world traffic and would kill to get in on the mobile world traffic.

Check out Glendor Showcase and how they are using Google Maps technology for navigating employment ads. Very clever. This type of site, called a mash-up, is becoming all the rage.

These sites offer a huge leap over one dimensional advertisements in newspapers.

Newspapers seem to be the new Coke, the product that wants to be everywhere. Whereas for over 100 years they were primarily sold in Australia in newsagencies now publishers want their product in fuel outlets, convenience stores, department stores, fast food chains, garden shops and who knows where next – the post office?

Where will this push outside the newsagent channel created by the publishers end? I don’t know.

What I suspect is that all this effort to get newspapers into other retail outlets has not generated incremental sales. It has only given consumers reasons not to go to the specialist newsagency outlet where they may have purchased other items which in turn support the economic model of newsagencies.

Rather than pushing outside the newsagent channel for incremental sales, publishers ought to consider moving back into home and into the channel they created. Make news valuable. Require newsagents to respect the product. Re-educate consumers that newspapers are about news and analysis and not about some contest entry or a free CD or whatever other non news gimmick is used to get the sale.

Publishers could engage with newsagents and create a win win by:

Working with newsagents and other suppliers to leverage newspaper sales from other key traffic generators to newsagencies such as lottery, magazine and greeting card sales. Prime targets here ought to be lotteries, magazines and greeting cards.

Building relevant and engaging promotions in co-operation with newsagents, promotions which engage consumers. I’m thinking here about promotions from that I would have expected to see from the 1940s and 1950s. Like a paper plane making promotion. The best plane made from a daily newspaper wins. Or a paper throwing contest leading to a state and even national championship. Get people interacting with the product in practical and community focused ways.

Working with newsagents to facilitate greater add on sales of non newspaper product from newspaper customer traffic. This co-operative effort will be rewarded with greater effort for newspapers.

Promoting the channel as the full service channel. Newsagents offer put away product, special orders, yesterday’s newspapers today, easy browsing and personal help.

Taking a holistic view of the display of newspaper product within a newsagency so it’s not a sore thumb type retail story but more of an integrated product which is relevant in several sections of the store.

Developing a loyalty campaign which rewards consumers for repeat newspaper purchases in a newsagency. Newsagents have technology systems which would facilitate such a campaign.

Unlocking sales and basket data from newsagencies to understand other opportunities.

Rewarding newsagents for incremental sales growth. This would be a far more meaningful measure for nominations for the National Newsagent of the Year Awards. Lottery companies issue a quarterly report ranking all outlets. Outlets push hard to get further up the list, competing with colleagues and with their own business. rewarding success makes success the model. Carrots work better than sticks.

Running mentor workshops by newsagents for newsagents. Once publishers see the successful newsagents from the list they could pay them to travel the country sharing sales growth ideas. Newsagents talking with newsagents – it would work a treat.

Chasing sales elsewhere may achieve sales in those outlets but sales in newsagencies will suffer.

It is only in newsagencies that newspapers are considered the traffic generator and it is in this where there is value to be mined for the newsagent and the publisher.

It wouldn’t be hard to test some of these ideas and others more skilled in this area could come up with. That’s what I would like to see – a serials of trials of strategies for achieving incremental sales in newsagencies. The worst that could happen would be flat sales.

News Ltd is basking in some good press coverage (except from their competitors) today following the launch of MX in Sydney.

The ABC provides a balanced report online. Australia is years behind the world in offering free commuter tabloids. I’d say this is in part due to our size and in part due to real daily newspaper competition in only two cities. In Europe the free and ultra lost cost fast read space is highly competitive. Publishers overseas seem to enter the space to attract readers their full price would not/could not reach. This provides a more attratcive sell to advertisers and that’s at the heart of the strategy.

It’s got to be a transient strategy though as mobile listening devices, beyond iPods which we will consider clunky in a few years, will push mobile/commuter access to news to new places.

MX is not for everyone. I’ve seen the Melbourne edition plenty of times and can’t remember finding anything interesting I would want to read.

I did a spot check yesterday of eight locations selling newspapers in my home town of Melbourne: two newsagencies, two convenience stores, two supermarkets and two petrol outlets. I did this because I sense that we (newsagents) are about to hear that publishers want their products in even more outlets – because they think that is the way to increase sales.

Here’s what I found from my visits:

Newsagents: Product stacked neatly, poster displayed and customers comfortable browsing. In each case the staff behind the counter knew when a particular feature would be in the paper I asked about. (I was sure to visit newsagencies with staff working who would not know me.).

Convenience stores: One had product stacked neatly and the second had papers displayed in an untidy way such that customers would dig deep into the stack to find a ‘clean’ copy. No posters on display. In each case I asked what day the TV guide came out and they didn’t know.

Supermarkets: Both had product displayed well if a little untidy with inserts on the ground near the stack and thereby leading customers to believe that they would have to dig for ‘clean’ product. No room to browse. No one to ask a product question of – there were people there but when I caught their eye to ask they looked away or became busy. No posters on display.

Petrol outlets: One was good, clean and tidy whereas the other was a mess with two titles mixed across two piles. In each case they could not answer simple questions about which day I could get the TV guide feature. No room to browse the newspapers. No posters on display.

Four channels visited and four different messages for the newspaper category. If I were brand manager for the newspapers involved I’d be awarding a strike against several of the outlets. The newsagents were consistent and offered added value.

Sure, you would expect me to say that. I own a newsagency. My software company services 1,300 newsagencies. So I’m connected deeply with that channel. I am also truthful and my integrity is important to me. This was a fair survey and the results I report are accurate. I’m not saying every newsagent is a saint. However, most serve the newspaper brands well and publishers will have to go a long way before they find other retailers who will go to the same effort on their behalf.

Newspaper publishers could gain more sales by working with the newsagent channel and proactive newsagent than they will get from chasing more outlets where their brand is not managed with consistency. There are newsagents around who have increased single copy sales by 10% and more whereas. The learnings from these businesses should be harnessed by then publishers and used to grow the business across the newsagent channel.

My sense is that in the non newsagent channels newspapers are there as a shelf filler, the add on sales whereas in newsagencies they are core product and are treated with more respect.

The New York Times has a story (July 3), The Battle for Eardrums Begins With Podcasts, which backgrounds the podcast revolution yet fails to cover the story well. No coverage about newspapers already podcasting or how the technology might enable newspapers to reach a broader audience.

The Pew Research Centre is an independent opinion research group. They study attitudes toward the press, politics and public policy issues. While US based, their research can provide an insight which we can learn from in Australia.

On June 26, Pew released a new report based on it’s most recent research. Here are some quotes from the report summary which I found most interesting:

Convenience is more important than cost in explaining why many Americans are reading the paper online instead of in print. Among those who say they read the web-version of the newspaper, 73% cite convenience, compared with just 8% who do so because it is free.

The entire report can be found here. While some of the research on political views may not be relevant in Australia, the report is valuable in understanding US consumer trends. The Pew research demonstrates very clearly that consumers views on access to and payment for news and information is changing. It is valuable information for any with a stake in the news and information business.

The San Francisco chronicle has announced an extension of its podcast offerings. Of the new podcasts, the one which interests me the most is Back Story. In Back Story, according to their website, ” Chronicle editors and writers give listeners a behind-the-scenes look at stories appearing in the paper”.

This is, in part, what I was looking for in my blog entry yesterday. More than what’s printed. Hearing an interviewee speak adds a new sense to their words. You get the emotion in their voice and for some stories this will be very compelling. Hearing a reporter or editor talk about a story can also provide an emotional context which can help in understanding.

Given the unique coverage of Australia with newsagencies (4,600 retailers specializing in newspapers and magazines) in every shopping mall and high street shopping situation, newspaper and magazine publishers have an excellent opportunity to use podcasts (in addition to what are developing as traditional uses) in a way not available in most other countries. This could win new readers and freshen the image of existing product. Plus is adds to the relevance of the newsagency channel.