Author: Mark Fletcher

According to Court TV, “over 45,000 people signed up for real time wireless alerts on the Jackson trial & Verdict Watch via cell phone text messages”.

In the PBL / Optus relationship announced earlier this week you have content creator and efficient supply chain. No middlemen. No overhead.

Consider the Jackson vertict and consumers’ desire to access this through mobile devices as how some consumers will want to access stories in the future. That these mobile devices facilitate easy access to moving stories makes them more interesting to the younger consumer.

“Across the media sector we have factored in a zero growth year in fiscal year 2007, to reflect a cyclical downturn in advertising. However, in our view, the risk of an advertising slowdown earlier has increased appreciably,”

So says Goldman Sachs as resported by the Australian Financial Review.

We, newsagents, need to be aware of what the analysts think and consider this in our own businesses when seeking traffic and sales growth opportunities. It’s not as if there is a drought of options.

The new relationship between PBL and Optus was all over the Australian and international business press yesterday. This is a very significant move for PBL and the Australian media landscape generally. The deal pushes convergence strategies in this country to a new level. Watch for others to follow quickly.

Optus provides PBL with a new supply chain through which to deliver its key brands: television programs and magazines. PBL provides Optus with valuable content.

Put this deal together with faster access from new cable technology and with the new multimedia handsets about to hit the market and you can soon see the value.

Once it starts delivering content, the Optus/PBL relationship will put PBL in a box seat way beyond its traditional television and magazine properties. Whereas today a story is on the cover of Woman’s Day and it’s on the shelf for a week, through this new alliance the store becomes the focus rather than the aggregated product (the magazine). With devices consumers enjoy using offering access to a video version of the store and Optus providing fast and easy access, I can imagine consumers buying stories rather then or maybe in addition to existing print product.

I reckon that for a few cents I will be able to buy a story through my new sexy phone and that as the story evolves, for the next few days, I will receive the updates without cost.

For PBL they get to a new marketplace full of early adopters and can manage the impact on their physical product. Good leadership.

People often tell me that consumers like the ease and flexibility of access to magazines and newspapers. I don’t disagree. However, as more devices come out with great interfaces, consumer attitudes will change. An this is why the convergence strategy of Optus/PBL is fascinating and timely.

Beware! Here’s my cracked record comment. The traditional news and information supply chain (newsagents) needs to develop its own strategies for changing consumer desires and the changing technology playing field.

Mediaweek last week ran an interview with Brian Evans, new COO for Fairfax. Evans was quoted as saying:

“We would like to have a stronger marketing relationship with newsagents and we’d like them to embrace our product. We would like to be treated like Lotto where there are huge signs up and we support promotions. I think newsagents do a very good job for us and it’s a very cost effective way of selling newspapers. Like any relationship it gets a bit tired and it needs to be jazzed up a bit.”

Hmmm. Newspaper publishers have driven newsagents to focus on their category linearly. Lottery companies and, to a lesser extent, magazine distributors have done the same thing. This linear approach to newsagencies has created freeways of traffic. Customers come in, buy their product, don’t get off the freeway and don’t shop the shop.

Newsagencies have excellent traffic. But too much of it is freeway type traffic.

If newspaper publishers, Lotto companies, magazine distributors, greeting card publishers and stationery wholesalers worked together they could come up with an important and timely format change for newsagencies which would generate incremental sales in these five core categories. Achieving this would mean that value is added back to the newsagency shingle and this is more important than a huge sign for The Age or the Sydney Morning Herald or the Herald Sun.

There is anecdotal evidence of significant sales success being earned in newsagencies where effort is put into cross category promotion. (Promotion which is usually against supplier rules but which benefits them.) This suggests that sales growth is there for the asking based on existing traffic flow.

Rather than pursuing incremental sales outside the newsagency retail channel, Brian Evans and the team at Fairfax ought to understand the freeway like traffic flow in a newsagency and then talk with the Lotteries and other folks. Co-operation between newsagency suppliers and active support from newsagents could generate the sales boost everyone is looking for.

Newsagents achieving sales growth are doing so without expensive shop fits. My research suggests that there are several simple and immediate steps which cold be taken to address the issues with freeway traffic. The feedback from these steps could then drive more structural change in retail newsagencies.

On average, newspapers are sold alone 55% of the time in newsagencies. Newsagents will say this is because they are shackled from cross promoting other product with newspapers. Others will say it’s because of poor retail. A retail expert I have spoken with says it’s because of placement/display rules newsagents have to live with. If Brian Evans could find a way to help newsagents leverage newspaper traffic into more business he could expect to receive reciprocal growth from other categories.

In How to Speak “Craigslist” Dayana Yochim of The Motley Fool writes about how rule breaking is the norm at Craigslist and why this small almost home based business is scaring newspapers around the world.

Then there is this, an interview with Craigslist CEO Jim Buckmaster originally broadcast on National Public Radio a week back. This interview gives you a sense of the community connect Craigslist achieves. With readers growing rapidly, no wonder newspapers are concerned. Buckmaster talks about the US$18 billion classified advertising industry and says the money spent on classified advertising should be spent on humanitarian efforts.

And as if you needed more evidence of the impact Craigslist is having, across at ecommercetimes.com there’s a story about how newspapers and eBay are responding to Craigslist. Telling numbers from this article: “Nielsen/ NetRatings show that eBay’s page views in April were up less than 0.5 percent from the previous April. At Craigslist, page views grew 130 percent in the same period.” Wonder what the classified growth was for the same period.

Attention newsagents and others in the news and information supply chain: what’s your piece of the Craigslist action? Nothing! Classifieds have been crucial to newspapers since they began. In years gone by they were called the rivers of gold. It’s a phrase you now hear rarely in the context of classified advertising. These are developments newsagents need to have a commercial response to otherwise the river will be flowing elsewhere with nothing to replace it.

PS. If you’re in Melbourne and looking for a car, check out this ad on Craigslist. Of for Sydney residents, check out this ad for a house in Kellyville for rent.

Editor and Publisher is reporting that the Denver Post has achieved 2,000 downloads in its first four weeks of podcasting. The Post’s podcasts have good production values and provide an alternative form of access to news and information delivered under the Post brand.

I recall from the launch a month ago that they were targeting non newspaper readers. Listening to the podcasts you soon understand that they podcasts are self contained. Not radio quality either. But they should not be compared to radio. These are for a different maketplace and need to be judged without comparison to other more developed media.

Their playing in this space is smart.

A new report, Podcasting as an Extension of Portable Digital Media – Fact, Fiction, and Opportunity, from The Diffusion Group claims demand for podcasts is expected to grow from < 15% of portable digital music player owners in 2004 to 75% percent by 2010. Source ipodnn.com.

With new phones and other podcast friendly devices hitting the market almost weekly, enough corporations have invested in mobile access to guarantee these forecasts are easily met. Consumers have shown how much they want access to information and entertainment anywhere. The challenge is for mainstream content providers to ensure their relevance by being in this space quickly. In Australia that’s not happening at the moment.

We have been handing out flyers about our LocalNews Daily citizen journalism project across the counter of your newsagency for a few weeks and these have generated considerable feedback but no site contributions. The feedback falls into four broad areas:

Great idea. Can’t wait to read stories. But no desire to post.

How much to advertise?

Will you pay me to post.?

This is a new concept to me and I think I want to be involved, give me some time to think it through.

The last comment is the most encouraging.

We’re in a smaller pond in Australia and I’m suspecting that the tiny pond we are playing in the eastern suburbs of Melbourne is yet to have what is necessary to sustain a project like this. So we’re rethinking and planning on a broader push with some other newsagents maybe. We are committed to the project but need to do more research success stories from overseas. We also need to engage someone from a journalism background to help drive this forward – a partnership of technology, local focus and professional journalism.

We’re engaging with some former journalists and writers to encourage quality content. We realise that in our community we need to do more than build the framework so others can play, we need to show what it’s all about by delivering some content. We’re also taking the opportunity to make better use of the drupal engine our site is based on.

We’re finding the posts of people like Steve Outing at pointer.org to be most helpful in our planning to get this right. Especially his piece: The 11 Layers of Citizen Journalism.

As we see things at present we’ve got another few weeks work to do (while keeping busy with our day jobs) before we get LocalNews Daily looking more like we want it to look.

In the week that we (newsagents) learn that our independent small business channel has lost the contract to deliver the Foxtel magazines to Foxtel subscribers to the government owned Australia Post, we (in Victoria at least) have been granted a delivery fee rise for the Herald Sun newspaper to take effect in a few weeks. What one have gives another takes away.

The delivery fee rise is most welcome. It’s been a long time coming given the wage and other cost increases since the last fee increase about 8 years ago.

The news about the Foxtel contract going to Australia Post ends the week on a sour note. I wouldn’t be annoyed if the government ownership did not extend to any part of the business for which there was active competition. In other words, the government should divest itself of the retail operation and the commercial distribution operation. A government concerned about business and, in particular small business, would get to work on this.

Australian Newsagents are a product of newspaper and magazine publishers. But the umbilical cord was cut decades ago. While the relationship is challenged at times it remains strong or is at least perceived as strong by people on both publishers and newsagents.

But the world is changing. Publishers are adapting to the changes faster than newsagents. Newsagents continue to act as servants, expectant of a master delivering continued purpose.

It’s time for newsagents to acquire or create additional purpose for themselves. This might in the content space or in an allied product service category which fits with the typical newsagency consumer.

While some individual newsagents are playing in new spaces – invitations, printing etc – none seem to be genuinely searching for new revenue streams. This ties newsagent relevance to their existing product/service mix and that’s dangerous considering the changes coming in lotteries, newspaper sales, magazine sales and further competition in the stationery space.

This deregulated channel does not yet understand what deregulation means and how to commercially deal with that.

I’m concerned about this today because of spending another evening reviewing figures for several newsagencies. Similar demographics, similar sized businesses yet wildly different business numbers. Those growing are pursuing growth. Those not growing are complaining about it. It’s this negative mindset which is the biggest challenge for the channel.

Newsagent leaders need to be pursuing new products and or services which they own or have a greater piece of to shore up customer traffic fall and to bring new customers through the doors.

This is a business case study unfolding before our eyes. If only we could intervene…

In his blog at PC World, No More Dead-Tree Newspapers?, Editor in Chief Harry McCracken gets right to the point and says: the classic morning newspaper no longer feels essential. He talks about news online being free versus the high cost for a home delivered newspaper. He also talks about more content in a newspaper than he has time for. He ends posing a question: How has the Web changed how you get your news?

Newsagents and those in the news and information supply chain ought to ask customers that question. It’s time for some unscientific research on flat and falling newspaper circulation.

How’s this for a new way of publishing/distributing/reading magazines?

Also check out this related link.

I’ve put the entire draft distribution newsagent business plan online for comment.

There is no doubt that the current business model of 4,000+ independent newsagents handling the home delivery of newspapers and magazines is ripe for change. With cost pressures from publishers and consumers, newsagents are carrying an increasing loss or cutting corners to break even. The CFA business model is designed to help newsagents pool resources to create a bigger distribution business. In many cases, where the newsagent owns a retail outlet, they will be freed to concentrate more on the retail side of their operation.

My view is that newsagents need to take the initiative and consolidate otherwise publishers and external commercial pressures will force an unpalatable consolidation on the small business owners.

In an effort to provide options for newsagents considering alternative organisational structures, we have prepared a draft business plan called CFA: Circulation Fulfillment Australia. The heart of the plan is that newsagents pool their distribution businesses into a bigger business to achieve economies of scale and to improve competitiveness while retaining current newsagent ownership.

CFA is a business model for a distribution newsagent for the twenty first century.

Owned by newsagents, CFA is a business which amalgamates individual newsagent distribution operations into a more commercial logistics centered consumer fulfillment and marketing organisation, freeing some newsagents to concentrate on their retail businesses and others to exit the day to day operation of a newsagency.

Separation of retail and distribution newsagency businesses in this way allows the individual newsagent to have more resources available for managing and building the retail side of the business while retaining an economic interest in a distribution operation.
The initial partners in CFA gain an added benefit – that of developing this exciting model for the future of newsagencies and newsagents.

CFA provides a structured and viable exit mechanism for newsagents looking to exit the industry. CFA also provides a commercial alternative for newsagents who want to work together and aggregate their individual distribution businesses into something more competitive and valuable.

CFA aims to:

Leverage economies of scale and reduce the per delivery point delivery cost.

Improve the service retail customers receive and therefore sales achieved and the number of locations reached.

Improve the service home delivery customers receive and therefore improve retention and market penetration.

Develop and implement successful home delivery customer recruitment campaigns.

Surpass supplier customer service objectives.

Provide a financially rewarding and lifestyle enhancing alternative for newsagents.

Provide an ownership and management structure appropriate to the today’s commercial climate which enables newsagents to more easily compete.

Eliminate the duplication of effort inherent in the current newsagent system.

Newsagents adopting this business plan will hand their entire distribution business over to CFA in return for an agreed shareholding in the company. At the same time CFA will enter into a five year agreements for the distribution of newspapers and magazines (home delivery and sub agents) in the handed up ‘territories’.
Newsagents not wishing to take up shares in CFA would have the option of receiving payment according to an agreed valuation formula and over an agreed period of time.

CFA will operate the distribution business from a separate specialist location with specialist distribution and marketing staff. From the time of take over, the selling newsagents would have no further involvement with distribution other than as shareholders in CFA.

CFA would employ distribution, marketing and customer service specialists and resource them with state of the art facilities to enable the most efficient and cost effective circulation product distribution operation possible. The product delivered out of the distribution facility would aim to set a new benchmark for the distribution of newspapers and magazines in Australia.

I have a 20 page business plan for anyone interested.

I’ve been negotiating with a major radio station to place a series of commercials in the lead up to launching my newsagency under a new brand. While the cost is high for my type of shop, it’s necessary to get the brand name out in the ether. Listening to the same station today to get a feel for their format I heard an ad for “Post” – promoting Lexmark printers and some stationery deal as well. Their campaign is slicker than I can afford. The deal they have for Lexmark product is better than I can negotiate. The rate they pay for advertising is better (I bet) than I could negotiate. Why? Because of their size. They are the size they are because they are the Post Office and because they have the mail monopoly at the heart of their operation – it’s the life support which keeps them going.

Whereas a business like mine has to survive on its own, the Post Office directly opposite my shop has the mail river of gold keeping it afloat and delivering customers to the mail counter and past their shelves of cards, printers and stationery.

I wish I had access to such an exclusive river of customers.

That my government is in competition with me makes me angry. That the government cannot see the damage this does to their credibility among small business owners is appalling.

The Australian government should sell off each of its government owned retail Post outlets – not to a chain, but individually.

In our work analysing retail newsagent performance we are getting closer to a efficiency rating benchmark for shopping centre, high street, regional and rural newsagencies. The efficiency rating is, in our view, based on the efficiency of the shop. The more items in the basket the greater the efficiency. The more items sold along, the lower the efficiency.

We’ve looked at close to 100 newsagencies now and a key challenge is the diversity of data management disciplines. In some cases discipline is non existent whereas in others everything is measured. In some cases employees are lazy as to even the department a sale is recorded to whereas in others if it doesn’t scan it doesn’t sell.

Another challenge is the view to take of the data given that the dataset is three dimensional. We can view from the perspective of suppliers, products (and/or categories) and time.

For starters we’ve stepped back and are just looking at basket penetration. This measures the percentage of baskets leaving a store carry items from each of the product categories carried in the store. Even at this base level of analysis we are seeing considerable differences between newsagencies and are facing challenges with data management. It’s this area of lack of discipline which is a huge challenge for newsagents moving forward.

So, what is a good level of penetration? Given that a newsagency is about newspapers and magazines first, what is reasonable penetration. I have seen newspaper basket penetration as low as 8% and as high as 55% based on January/March 2005 data. St each of the extremes there are explanations. However, in a business management sense it’s not good business. This analysis is about balance in the retail business.

More soon.

More commentary from the UK about the recent Office of Fair Trading draft ruling on newspaper and magazine distribution.

Roadcasting is technology in prototype stage that allows anyone of have their own radio station, broadcast through wireless enabled devices. Read more at Wired, technology review and Om Malik’s blog.

On the surface roadcasting looks to be more in the radio space and not something related to newspaper and magazine publishing. Wrong! Those lines are blurred and what was once print only content is now becoming available through other media. Hence the possibility that roadcasting might play in the print publishing space as well.

With the wireless innovations we’re hearing about and the roadcasting concept to leverage that technology to greater usefulness while mobile, access to content gets easier and easier. While roadcasting is currently a user driven concept, there is nothing stopping commercial leverage.

The Spokane Spokesman-Review is becoming a poster child for how newspapers might address the impact of technology on their businesses and the citizen journalism movement.

At their website you can read the news stories; read what readers think through at their blog, News is a conversation; access the Daily briefing – a blog of comments, notes etc from the daily news mattering where news decisions are made; and access Ask The Editors, where the editors answer readers’ questions about The Spokesman-Review’s editorial decisions and operations. There is also a series of blogs by columnists and a list of local blogs. Wait, there’s more. There is audio and video content. (See this vision of a semi trailer which hit a house.) And there’s even more. For me this is the cream, this is the perfect example of local engagement. They have been collecting MP3 files from local bands. Their catalogue now has With the catalog now at more than 250. They have gone so far as to launch an internet radio station featuring the local music. Read their story here.

I find myself responding to what the Spokesman-Review is doing on several levels.

As a local consumer: This is a newspaper I want to engage with. They provide access as and when I wish – print, online, RSS. They demonstrate a local commitment which matches my desire for less of a one size fits all world.

As a newsagent: One the one hand I like it because I’m helping the local connection by selling the newspaper in my shop(if I were a newsagent in Spokane that is). But then I see them pushing their brand so much beyond print and I can only engage with the product in the print world. It scares me because the better they get at it and the more the world changes in terms of mobile devices and fast low cost access anywhere, the les my newsagency is part of the supply chain.

As an observer from the other side of the world: The world shrunk some more. Where as I could read stories about other places, the Spokesman-Review website and all of its tentacles take me there on a cohesive yet local way. I can get a real feel for the place and its culture. I can connect. And this is a valuable role of local newspapers in the evolving world.

Australian newspapers could learn from this innovation. While some publishers here are playing in the space, none is embracing citizen journalism, transparency and the new mobility paradigm in the way of the Spokesman-Review.

Given the role newsagents play in distributing and selling newspapers in Australia, it would be appropriate that we are part of these changes here. We could be the access point for music, the face to face community connect between the newspaper and their online content. Newsagents ought to be taking this opportunity to publishers and working on strategies which are mutually beneficial.

The Spokane-Review is not alone in this innovation. Their story is interesting because of the size of their marketplace, their strong local commitment and the wholeness of their innovation. It’s an excellent model to study on changes in news and information publishing.

Here’s a bit about the newspaper from their website: The Spokesman-Review, Spokane’s 106-year-old daily newspaper and the largest news and information provider in the Inland Northwest. Launched in 1894 by Publisher William H. Cowles, The Spokesman-Review has been owned throughout its history by the Cowles family of Spokane.

According to The Readership Institute, the Spokesman-Review achieves circulation of 118,877 Monday-Saturday and 132,489 Sunday.

“Media is shifting from a publisher-centric model to a user-centric model, where a user picks the content from a lot of sources,” said Christopher Alden, a founder of Red Herring magazine and CEO of Rojo Networks, a San Francisco-based maker of an RSS reader. From RSS Feeds Becoming Hot Real Estate For Online Ads an AdWeek.com story at yahoo.com.

This is a story about how publishers and advertisers are aggressively embracing Really Simple Syndication (RSS) to reach consumers. Clever advertising for tech savvy consumers. It’s proving to be very hot for real estate advertising according to the story.

thestreet.com is reporting that Gannett is buying closely PointRoll – a smart online ad marketing firm. Gannett owns TV stations and newspapers including USA Today.

This is just another in a series of significant acquisitions this year by newspaper publishers – investing capital outside their traditional businesses to support their traditional businesses and leverage their brands into the new mobile world. The level and speed of invetsment is proof that the publishing world is changing.

Australian Newsagents and others on the news and information supply chain need to be investing in their businesses. These investments need to be in areas which underpin their value proposition to consumers and their bricks and mortar presence.

Nokia, the Finnish broadcasting company and others have commenced a mobile TV pilot project in Finland. This goes beyond the clips currently available on mobiles. While this project is about testing the mobile technology and consumer use patterns, once completed it will go live internationally. This will drive more rapid mobile technology change and this will, in turn, increase options for publishers.

The line between broadcast media outlets and print outlets will become further blurred as both will use the new consumer access channel. We’re already seeing it now with newspapers podcasting and providing video news services online to augment print coverage of news. (While uptake in Australia has been slow, once one newspaper podcasts others will follow quickly. While newspapers are writing stories about podcasting they are more about the implications for radio. They have not got it yet.)

The existing news and information supply chain needs to have its own strategies for this new world. It needs to support development of content which will use the existing supply chain. We, each of us, ought to be playing in the space to connect with the consumers; we ought to be seeking out content development opportunities; we ought to develop the local connect (like we are doing in my own newsagency with the local news site); we ought to uncover other content we are not currently providing access to and add that to our retail/ distribution mix; we ought to DO SOMETHING.

The inaction on the impact of mobile technology in the news and information supply chain (newsagencies mainly) is at best an economic slump and at worst an economic catastrophe waiting to happen. How we react will be a case study for business schools in decades to come. Currently, the head in the sand approach dooms the channel to failure. Sure the big impact of change is years off, that’s we need to start today. We are already challenged in consumer minds.

On cable last night (Fox 8) was a first run (for Australia) of an episode of The Simpsons where Lisa starts a newspaper to get the truth out against a corrupt media. Others in Springfield follow and soon everyone has their own newspaper. The episode was a commentary on diversity in news outlets and, of course, the blogging phenomenon. This quote from Homer is a gem: “Instead of one big-shot controlling all the media, now there’s a thousand freaks Xeroxing their worthless opinions.”

I caught this forum on CNN last night (repeated today), moderated by Aussie Michael Holmes and featuring a large panel of media commentators and bloggers.

I found Blogging: The Fifth Estate most enjoyable. It was good to see mainstream media talking about blogging and doing so in an intelligent way.

Courtesy of by John Aravosis & friends
at americablog.com here is the schedule:

June 11, SAT
*6am (ALL REGS) 2:30 News Upd/ Blogging: The Fifth Estate, pre-empts World News, Next@CNN (EU/LA) / International Correspondents (AS/SA/NA)
*130pm (EU/LA/NA) 2:30 News Upd/ Inside the Middle East pre-empts World Business This Week $ MASTER
*4pm (EU) 2:30 News Upd/ Global Challenges MAKE-GOOD pre-empts World News $
*5pm (EU/LA) 2:30 News Upd/ Blogging: The Fifth Estate, pre-empts World News, International Correspondents

June 12, SUN
*12am (AS/SA) 2:30 News Upd/ Blogging: The Fifth Estate, pre-empts World News, World Report B
*6am (AS/SA/NA) 2:30 News Upd/ Blogging: The Fifth Estate, pre-empts World News, Talk Asia
*8am (EU/LA/NA) 2:30 News Upd/ Blogging: The Fifth Estate, pre-empts World News, World Report B
*1030am (EU/LA/NA) 2:30 News Upd/ Design 360 MAKE-GOOD pre-empts International Correspondents $
*1130am (EU/LA/NA) 2:30 News Upd/ Inside the Middle East pre-empts Diplomatic License
*1pm (EU/LA/NA) (NO NEWS UPD) Blogging: The Fifth Estate, pre-empts Late Edition 2nd hour
*330pm (EU/NA) 2:30 News Upd/ Business Traveller pre-empts International Correspondents $
*7pm (LA) (NO NEWS UPD) Blogging: The Fifth Estate, pre-empts CNN Today
*830pm (LA) (NO NEWS UPD) Business Traveller pre-empts CNN Today

Here’s a blog entry from someone in the audience at the CNN forum and blogging at the same time.