Author: Mark Fletcher

Randall Stross writes about how Craigslist is giving local newspapers and eBay a run for their money. Followers of Craigslist have known this for years. A good piece from the New York Times even if a little late.

According to a story on page 3 today’s Australian Financial Review, the global McDonald’s chain is pushing ahead with the sale of newspapers across its network of stores. This would be devastating for Australia’s 4,600 independently owned newsagents and their employees on several fronts:

It dilutes the value of newsagencies in the minds of consumers as the retail point of news and information. It also confuses consumers.

It reduces traffic to newsagencies – the channel created by the publishers in the 1800s to sell and support their product. Newspapers are the key generator of traffic for newsagencies – they are the top selling items in most.

It helps a global company take business from independently owned small businesses.

It harms the fine balance that is a newsagency. A typical newsagency sells newspapers, magazines, lottery products, greeting cards and stationery. Margins are slim. It is the high volume of foot traffic for low margin purchases which keep newsagencies going. Hence the anticipated high impact of the McDonalds push.

The big fat McDonalds ought to stick to peddling its food and leave the sale of news and information product to the specialists.

Every small business owner and every person working in a small business ought to boycott McDonalds. We should be supporting other independent small businesses.

Any business supporting the McDonalds push is demonstrating its preference for global companies over locally owned independents.

Newsagents need to rally on this issue and campaign aggressively to their local media outlets.

Further to my earlier post, I’ve just analysed sales data from another 53 newsagencies covering January 2005 through March 2005. In city/suburban newsagencies 66% of newspapers are sold alone. In rural/regional newsagencies 35% of newspapers are sold alone. In all newsagencies newspapers are the highest selling product category – they are the highest traffic generator.

This success for newspaper sales in newsagencies is no surprise. Our channel was created by the publishers in the 1800s to serve their distribution needs. For over 100 years we have been the outlet to purchase newspapers and magazines from. It’s why there are 4,600 newsagencies across the country – in every town and every suburban high street situation.

Today, though, newsagencies are one of several channel in the publisher distribution strategy. Newspapers are no longer specialist product. They’re a convenience product.

Prior to deregulation in the late 1990s the Melbourne Herald Sun, Australia’s top selling newspaper, sold for $1.00. Newsagents had the retail pretty much sewn up. They did a good job too. Now, with sales not that different to prior to deregulation, you can buy newspapers in petrol outlets, convenience stores, supermarkets, variety stores and even coffee shops. So, newsagents have had significant sales taken from their businesses. Such is the product of deregulation. However, the back end of the operation has not deregulated. Newsagents have been left with deregulation type accounting and supply processes which bog their businesses down in inefficiencies which, I suspect, their retail competitors are not faced with. Ask a newsagent about the in store display rules they have to live with and compare these to newsagent competitors. You’ll soon see an unfair playing field.

The Herald Sun is still $1.00 today. Seven years on. In my store I make as much today as seven years ago yet now pay 35% more rent, 35% more wages, 40% more in operational costs. News Corp. controls my GP on my highest selling item and continues to look for new retail channels to take business from me. Something doesn’t make sense about this situation.

So, newsagents have lost sales to competitors as result of deregulation. They have also absorbed significant labour, lease and operation cost increases. Yet the cover price, which newsagents have no control over, has remained static. This is an appalling situation for newsagents. Unfair at best and economic suicide at worst.

Newsagent competitors are not as concerned since they are getting add on sales they (most at least) did not get previously.

Every new outlet carrying newspapers further erodes traffic to newsagencies and this is a huge risk for this challenged small business channel. Newsagents need strategies which build traffic in the face of further loss of newspaper traffic. They also need publisher agreement for cross promotion of other product with newspaper sales. At present publishers don’t want newsagents to promote other parts of their business to newspaper customers.

Newspaper publishers need to review their cover price to ensure that it reflects the value of the product to the consumer. They also need to agree to a commission for the retailer which reflects the real costs of offering the product in store. Finally, they need to support and encourage cross promotion of other products and services to newspaper customers.

In an ideal world I would buy my newspaper product for 50% less than it costs me today, I’d buy on ‘firm sale’ (i.e. no returns of unsold product) and I would have complete control as to how I display and promote newspaper product in store. I reckon the results would be a nice kick in sales.

This channel the publishers created is being slowly starved and drowned at the same time.

The Washington City Paper this week introduced hawkers to offer their freebie to commuters in an effort to boost flagging circulation according to the Washington Post. I find this story interesting because I cannot get free papers for my retail newsagency. I’m happy to attract any and all traffic, even if they come to collect a free paper. You’re either part of the news and information supply chain or not in my view.

A quote from the Washington Post story:

A few restaurants and grocers stopped carrying the paper, she said, after customers complained that readers left the newspapers on tables or threw it on the streets. Also, more chain retailers, with policies prohibiting distribution of local newspapers, are moving in, she said.

Here’s a perfect example of the citizen journalism movement at work and kicking goals. WeatherBug, (a good commercial weather reporting service) has announced the formation of a nationwide network of “weather reporters” who will collect, report and share weather information from their own WeatherBug Backyard Tracking Stations. Read the full press release here. Here’s a key quote from the press release:

Citizen weather enthusiasts enhancing the commercial offering…a good marriage.

Radio is embracing new technology faster than newspaper and magazine publishers.

Podcasting, barely a year old, has already been boldly embraced by radio companies and advertisers. In no time at all they have understood and seized the opportunity and created commercial offerings which extend existing business models. Not only stations, people brands Dr Laura Schlessigner and Rush Limbaugh are in the podcast world push their views to the mobile and tech savvy.

Newspaper and magazine publishers, on the other hand, continue to struggle with the intersection of the growing citizen journalism movement (blogging, podcasting etc), we media (the daily me as opposed to the daily newspaper), mobile technology and more accessible and faster broadband. Some are dabbling, few are truly embracing the opportunity. Further, the news and information supply chain seems to be at a loss as to how to respond or even wondering if they need to respond.

Radio stations across the globe are showing how a traditional media company can embrace technology to enhance their brand and do to so in partnership with advertisers.

The differences between radio and print are that radio is not as old as print, it does not have the supply chain to deal with, it does not have the capital infrastructure in traditional product and it’s already used to mobile access.

The article, PODCASTING RAPIDLY EMERGING AS RADIO BUSINESS EXTENSION, the latest issue of Advertising Age demonstrates how advertisers and radio stations are embracing the opportunity and how legitimate podcasting has become in such a short time.

Podcasting is takes all media players into undefined space. It’s opened a new marketplace and blurred the lines between media players. It is another reason why the media ownership laws in several countries need urgent overhaul. Podcasting also increases competition between, say, newspapers and radio. Whereas in the old world their lines of delivery were more clearly defined, today the story is the thing.

Newspaper and magazine publishers and their supply chain partners need play catch up and aggressively play in the mobile space – if only to help see the road ahead for their businesses.

Rex Hammock has published a brilliant series of posts on podcasting. In post #3 Rex lists the kinds of podcasts he’d pay podcasters for. It’s an interesting list. Here are some items from Rex’s list:

1. City tours (really, any kind of tours, including museums, historic battlefields, national parks, etc.)

2. Mash-up music-news programming: I’d pay for a version of a 30 minute program of business news each morning that had jock-jam-type music in the background playing at my jog pace.

3. Seminar sessions: I doubt I’m going to attend your $1,200 conference. But if it sounds compelling enough, I might pay you $100 to download each session a few minutes after it is finished.

4. MP3 books — self-publishing model: iTunes could, if they want to extend the long tail out long enough, become the Amazon.com of audio books — Amazon.com is trying to do that itself, however.

5. Motivational, self-help, weight-loss, exercise, how-to audio: This content is all over the place already…even on iTunes.

Rex’s point is well made – while podcasting, barely a year old, has set radio and publishing alight with start ups and existing players developing business models, there are many outside the traditional news and information fields who can create content to be podcast.

Businesses like newsagents can be an access point for downloading podcasts and paying the few cents for story, music and other content. We do this today in selling newspapers and magazines. we have the consumer connect. So, our place in this supply chain is logical. Plus many of us have the technology in our stores for such distribution.

Taking Rex’s thoughts and with the right economic model, accessing podcasts through newsagencies and under a strong national brand could bring a whole new range of consumers our way. I’d been thinking along the lines of newsagents offering music and video download but podcasts of all manner of things really opens the world.

As I’ve predicted before, podcasting will facilitate greater disaggregation – disconnecting stories from aggregators such as newspapers, magazines, television shows and radio shows. Podcasting will make the story the thing. People will pay fractional amounts for the story. And the new wave of devices coming out later this year will push the movement from audio to video.

Jeff Jarvis at BuzzMachine provides some interesting background to EPIC 2014 the brilliant flash movie sepculating on the future of news. In his post, Jeff tells us that EPIC 2014 was inspired by an argument over this speech from January 2004 by Martin Nisenholtz Chief Executive Officer, New York Times Digital. I had not read Pong of Electronic Publishing (read the speech to understand the title) until today and am glad to be able to read it now, sixteen months after it was delivered. History is showing that Nisenholtz was on the mark in many areas and off the mark in others. The most significant passage from the speech in my view is:

Users will be able to associate content from a wide variety of sources, including filtered access to other users, through a common interface. Online communities will be available to discuss any “article” at any time of the night or day. A user lands on the article and discussions about that article are continuous. News reports become a focal point for social networking. Again, we see this bubbling-up in Web logs today.

In this vision, two very important boundaries which all of us have grown up with, know and understand change. The first is authority. In a newspaper or in a television news broadcast, the journalistic experience is one-way and bounded. In this new experience, sources range and are scored.

A professionally crafted restaurant review will –in my opinion – bring the same kind of authority to the user in the digital world as it does today. But this review will be augmented by a range of opinions from others; ranging from other professionals to bloggers to audience. We can already glimpse these scoring mechanisms – and this is just one example – in our rate and review area in our Movies section. As better reputation and recommendation management systems emerge, readers will “empower” new kinds of creators who may emerge from outside of traditional institutions.

As anyone reading this blog might expect, I’ll consider material such as this from Nisenholtz in the context of the existing news and information supply chain since this is where I play the most. In Australia there are 4,600 of us, businesses created in the 1800s by publishers to serve their needs. We’re evolved tremendously since then, of course, yet some of our mind sets remain – such as expecting others to create our future. The world described by Nisenholtz in his speech is becoming a reality and while newspapers and magazines will not die, the mass market model of the past will change. Who knows if EPIC 2014 will become a reality. Some could be excused for thinking it will given the moves by Google in recent years.

The supply chain is in play yet many in the supply chain don’t know that. It’s business as usual for them and that’s bad for business.

My view is that businesses which rely on newspapers and magazines for 50% of their traffic need to reinvent urgently, not away from news and information but allied to. They (we) need to connect locally. The need to be part of the mobile citizen driven new media. They need to be leading the change rather than chasing behind and grabbing at crumbs.

This is one reason we’re playing with a citizen journalism model and in some other areas. We’re making plenty of mistakes and enjoying picking ourselves up for another go.

The key focus for the traditional news and information channel is to understand that we’re the final point in the supply chain. We’re content retailers. What else we do to be relevant needs to fit with this.

The Chicago Sun-Times is the first major US newspaper to stop publishing daily share price listings as announced in this story. Their comprehensive listing has been replaced with a two page summary.

While the Sun-Times story was upbeat and full of spin, the Chicago Tribune reported the story as an imporant news item – heralding a new era:

The Sun-Times appears to be the nation’s first large-circulation daily paper to do away with the tables, though many publications have been trimming them for more than a decade.

Sun-Times business editor Dan Miller did not return a call seeking comment on the move, announced in the newspaper’s Tuesday’s editions.

“It’s a recognition that for a great majority of readers it’s redundant,” said Sun-Times Publisher John Cruickshank. “It’s not an easy way to present the stock. It’s a whole lot easier to go on the Web.”

And further on is this telling par:

Since the dawn of the Internet, newspapers have wrestled with the question of which content should appear in the printed publication and which should be duplicated or appear exclusively online.

This might be a tipping point for newspapers. Publishers are a proud bunch and would not want to be first out of the gate with a change like this. Now that the gate is open it will be interesting to see who follows. The decision demonstrates the power of mobile and online access to time sensitive information. Also, it frees the newspaper to do what the medium does best. It will be crucial that they embrace that opportunity to ensure relevance.

The US Sports Illustrated magazine has gone live with professionally produced video content to support stories in the magazines. At SI.com you can access stories behind the stories in the magazine.

Online Media Daily quotes Jeff Price, vice president and chief of marketing at SI.com. “The idea is to play both mediums to their strengths,” said Price. “We’re looking forward to great online/print opportunities for the editions coming up that will be devoted to college and pro football.”

The Sports Illustrated strategy has three elements from what I can see: to support a high subscription price; to engage readers (viewers) with their brand for longer; and to position the brand for disaggregating stories from the magazine.

While SI video content is currently available to everyone, I’d expect it soon to be available only to subscribers. I’d also expect audio and video content to be available on a story by story basis. This is how the younger demographic prefers to purchase content and smart publishers chasing the younger demographic will give them what they want.

The video stories at SI.com are professionally produced and carry advertising.

It’s a fine line they are playing since newsstand and subscription sales are important. New Media sales will be equally important. Hence the need to focus on their brand in multiple mediums at once and engage in precision balancing – ensuring that growth in one medium does not pull does sales in another medium which that medium is key to revenue.

Sports Illustrated is not a big title in Australia and we could be forgiven for brushing their new initiatives off. That would be ignorant. The lead by SI and some others needs to be understood, especially by the traditional news and information supply chain. There are new supply chain alternatives which we need to be playing in and or responding to.

Sports Illustrated are demonstrating that the world has changed.

Given the research indicating that the 18-34 demographic are moving away from traditional forms of news and information retail businesses like mine which rely on news and information product (newspapers and magazines) for 50% of our customer traffic need to change to be more attractive to the younger audience while not alienating the older audience. Here’s what we are doing:

Promoting recharge. The 18 – 34 demographic is the recharge age range. We’re creating a loyalty promotion around multiple recharges. Whether they recharge phones, online access or debit cards. We’re happy to reward their traffic to our shop.

Make the shop friendly for 18 – 34. Newsagencies are considered to be places for older people. During our push for youth we’re making the front third of our shop youth friendly. We figure if we show product like music, skater, surf, fashion and teen magazines it will help create the connect.

Sound. We’re being careful about the music we play.

Product placement. We’re being careful to place 18 – 34 product away from content of interest to older customers where possible.

Funkier product. We’re breaking away from the traditional newsagency product mix. For example, in our greeting card department we’re carrying non traditional cards and as a result are seeing double digit growth.

Asking what they want. We’re talking to our customers to find out what they want.

Shopping basket analysis. We’re trying to understand what sells with what and how this can be considered in the context of demographic.

Free internet access. We’re trialing making Net access free in 15 minute chunks. Our hope is that this will show us as more Net friendly and therefore make us more interesting to the age range we’re pursuing.

Traditionally, our centre changes. Early in the week most visitors are in the 50+ age range. Friday through Sunday it is younger people including young families.

Like most of Australia’s 4,600 newsagencies we have catered for tradition. Sticking with what newsagencies have been for over 100 years. While our tradition is to be celebrated, it will not provide a viable future for us. We know the world has changed and it’s time for us to change with it. The list above is a small step on the road to change many newsagents will have to take.

Matthew Flamm reports at Crain’s New York Business that on June 9 the New York Times will will begin sending out street hawkers every Thursday afternoon to hand out copies of MarketPlace, a full-color, tabloid-sized classified advertising guide. MarketPlace will also include articles reprinted from the New York Times. Initial distribution is expected to be 150,000.

Newspapers are pursuing a range of avenues to attract younger readers and others who are ignoring the traditional newsstand purchase. Most strategies cut out the existing supply chain.

Technology has broken the corporate news monopoly. Digital cameras, camera phones, blogs, and RSS put the tools of the news trade into the hands of the public, and now real news comes from real people everywhere. Now you can demand coverage of the stories you care about—all you need is nowPublic.

And with that, NowPublic introduces itself to the world. NowPublic is a grassroots world news coverage service where anyone can have a voice. You can also nominate news items for extra coverage.

Peter Shankman predicts the “death” of a major US newspaper in 2007 and that a “digital-only” version will replace it in his blog – PR. Differently. Shankman runs a PR firm, The Geek Factory. Whether he is right or not is immaterial. That the prediction is our there and being quoted by others puts the prospect up for discussion and that, of itself, can give momentum to what started as a predition.

Fascinating points coming from the Digital Media Round Table at the WAN 58th World Newspaper Congress in Korea yesterday. Here are some comments posted by Robb Montgomery, CEO – Visual Editors:

While my landlord dictates what minimum hours my shop must open, the Australia Post retail outlet directly opposite my newsagency operates off different rules. They close at lunchtime on Saturdays and all day Sunday – avoiding employee penalty rates. While one could argue the extra hours provide my business with an advantage, without the mail services to draw people to our part of the centre, we don’t get enough tarffic on Sundays to cover wages. There are two sets of rules in play and it’s the independent businesses which are worse off than the government owned Post Office.

The government should divest itself of the Australia Post retail channel.

Newspaper publishers and editors are meeting in Seoul this week at the World Association of Newspapers conference. In his opening remarks, Gavin O’Reilly, Acting President of WAN challenged the place of newspapers in the increasingly mobile and digital world. “After 400 years of newspapers rightly dominating the media landscape – and successfully weathering the onslaught of radio, TV and latterly the new digital age – it’s hard to see the full-time whistle blowing quite yet.” And then this: “Believe me – this game is not over: we’re not even into extra time. News-papers represent an integral part of over a billion people’s life every day – showcasing and celebrating the serendipity of life.” The full speech can be found here.

Changing Channels is an excellent article by Rana Foroohar and published this week by Newsweek. While broad in its coverage of the challenges facing television, a core focus of this article is the impact of dramatic distribution changes on the medium. What is the future of television if the IPTV distribution channel becomes viable? The same question is on the table for all mainstream media distribution channels including Australian newsagents who rely on newspapers and magazines to generate more than 50% of their foot traffic. News and information supply chains face huge challenges.

Scott Anderson is the Director of shared content for Chicago-based Tribune Publishing and Interactive. A journalist, Anderson has worked in various reporting and editing capacities at Tribune since 1981. He created his blog to keep Tribune staff abreast of online media developments. It’s just been made public.

This blog is an excellent resource for those interested in online media developments from the perspective of someone deeply connected with mainstream media. That the blog has been made public is a tribute to the Tribune and to Anderson.

Can’t find any newspaper executives blogging in Australia.

The US TV Guide has launched a podcast, TV Guide Talk, which they say provides: “inside scoop, off-beat opinions and answers to your questions about the latest entertainment headlines, the hottest TV shows, the newest movies and the biggest celebrities in this weekly Podcast”.

The TV Guide folks are engaging with their audience by inviting feedback on stories listeners want to hear in future podcasts.

Okay, so here we have a magazine creating audio content and making it available at no cost. Currently, the content is like a segment of the magazine, a story if you will. Mediocre production values which I am sure will improve if they see consumer acceptance of their experiment. Advertiser support will follow.

If they improve content and production and if technology continues to evolve to make podcast access easier (and it will), the TV Guide experiment will become their preferred method of getting their brand to consumers. Podcasts, like magazines, are, for the publisher, the delivery mechanism for advertising. They cut out the traditional news and information supply chain.

Given easy access to TV Guide like program schedules online and more up to date than the printed product and the launch now of these podcasts it is reasonable to wonder about the implications for the magazine and those who sell the magazine. There will be a tipping point. It’s a way off but how far off is anyone’s guess. That they are playing in this space is proof that they can see a tipping point. Maybe the magazine will morph as a result into something offering more reflective content which lends itself to existing only in print whereas the podcasts will be about more immediate news.

Still no major print media company in Australia playing in the podcast space.

Dan Gillmor is a keynote speaker at the World Association of Newspapers conference in Seoul commencing tomorrow. Yesterday he posted the text of his keynote, What Professional and Citizen Journalists Can Learn From Each Other, at on his blog.

Dan’s is a leading voice in the citizen journalism movement and his keynote speech essential reading for anyone interested in this field. He positions citizen journalism with this statement:

Something important is happening in the world of journalism:. It’s an evolution from the lecture model, to which we in mass media have become accustomed in the past century, to something closer to a conversation. The shift stems from the collision of technology with media.

He then notes:

That, by the way, is the last time I’ll talk about technology today in any specific way, because this trend is more about people than gadgets. Citizen journalism is made possible by what’s new. It will be made excellent because of what people do with it.

I think what he’s saying is that technology is the enabler. The real movement is what people do with it. This is the killer application as software people would call it. The people application. How we embrace the technology and use it to release us from the control of others. Rather than being lectured at as Dan refers to the old model, it’s is a conversation with our input helping shape the result as much as the professional reporter/news gatherer.

I was to be in Seoul, in part to hear Dan speak, and am glad that through his blog and the concurrent World Editors Forum blog I am able to access content electronically.

Those of us on the news and information supply chain can learn from Gillmor for roles we can play in this changing world.

The Wall Street Journal has hosted its third annual D: All Things Digital conference. They say it’s: “…three days of unscripted, frank interviews with the leaders of the digital revolution, responding live onstage to the kinds of tough, smart questions…” The conference has provided excellent discussion including that reported by the Washington Post in their report: News Groups Wrestle With Online Fees.

The article documents the struggle going on within many news and information publishing businesses about how to price online access. Publishers are looking for online to pay its way while at the same time looking more carefully at the print economic model in the face of advertising revenue challenges.

From Leslie Walker’s article:

At the conference the Chairman and Chief Executive of the Washington Post, Donald Graham, claimed that readership of their journalism had more than doubled in the past seven years if they include print, online and their free commuter products. Years ago it was print readership. The Washington Post is but one example of how newspaper publishers are morphing their business model to grow readership. And the changes will continue into more mobile delivery of content.

Again from the Washington Post article:

Hmmm, a cover price increase for newspapers, I’D LIKE TO SEE THAT. The cover price of a newspaper ought to respect the value placed on the content by the publisher. The price should be based on this value judgment and not on fear of consumer reaction.

Kann is right with his analogy. Yesterday I paid A$3.50 for a mediocre coffee at Brisbane airport and threw it away after a sip. A$1.00 for a newspaper is cheap.

I hope Australian publishers are reading the same reports I’m reading.

Newsagents have been good at supporting many businesses in getting a footprint across the Australian retail landscape. Our 4,600 stores see, according to some, 17 million people every two weeks. Even if that number is a bit off newsagents see more than any other retail channel every week than all comers except, probably, Australia Post.

So, because of our national footprint, companies come to newsagencies with promises of good gross profit if we put their new products into our shops.

Such was the case with mobile phone recharge product.

We did the work, provided the retail footprint and enabled a faster national roll out than any other channel could deliver.

Vodafone has just joined other carriers showing their respect for newsagents by cutting the gross profit from each sale. Newsagents have put in the technology, trained employees, put up the point of sale material and attracted customers – as a key part of the Vodafone story.

The thanks we get, now they have critical mass, is less payment for our effort.

Australian newsagents need to stand up to moves by companies like Vodafone and negotiate respect for our unequalled footprint, our extended trading hours and our connection with the community.

Newsagencies are the quintessential independent retailer and we’ll disappear if suppliers like Vodafone continue to squeeze us.

Big Mac, fries and an MP3?, at CNN.com reports that McDonald’s is hoping music downloads, Internet will help attract hipper, tech-savvy crowd.

“This may become the new customer service catchphrase as McDonald’s hopes to reel in the young and tech-savvy with Blaze Net, which allows customers to buy music mobile-phone ring tones, print digital photographs and surf the Internet, according to a report published Wednesday.

The fast-food chain began pilot testing the new ATM-style device May 16 at its new flagship restaurant near the Oakbrook Center shopping mall in Oak Brook, Ill., the Chicago Tribune said. But a spokesman wouldn’t say how many restaurants will add Blaze Net.”

It’s a wise move by McDonalds, one which should be followed by others facing challenges in reaching younger customers.

The McDonalds move will help push mobile technology further and therefore challenge traditional content (news, information, music and video) supply chain channels.

McDonalds are doing what Australia’s 4,600 newsagents should be doing.

Since talking more publicly about our plans for a local (eastern suburbs Melbourne Australia) citizen content news site we have received many emails and calls from people elsewhere around the country telling us to make it national. They get the citizen journalism mantra but not the local focus.

For any citizen journalism project to work there has to be community engagement. This is what will make the decision for us. It may be that we start with a broader focus since this is where there is more interest and provide local links from that broader perspective.

The more people who tell us what they want the better the opportunity for us to get it right.