magazines

Technology & Business is a well produced magazine full of out of date content and backed by a website providing free access to chunks of content from the magazine. Their target audience will access content found in this magazine sooner online from a range of sources at no cost. From a newsagent perspective, I make 75 cents per copy sold. The real-estate costs me $3.00 a month and labour managing the title another $1.00 a month. I receive four copies and am lucky to sell two.

For this title to work for newsagents it needs to offer a better return either through a higher cover price or higher commission. It also needs more relevant and timely content. If they want to persist with a $2.95 cover price they need to articulate the relevance of this price to prospective purchaser. Just making the title cheaper does not cut it.

My sense is that an online only model would work better for this title.

Cosmos magazine has beefed up its online presence with the addition of daily news updates to its website among other things. Frequent readers here will recall my criticism of Cosmos launching in an already challenged category and expecting newsagents to effectively fund their launch for at least the first six months. In most stores I see sell data from, Cosmos is a loss making proposition. If this is the experience nationally maybe the long term strategy is to move entirely online. Regardless, the experience of the last year, the first year for the magazine, is that newsagents need to be treated more equitably by publishers of a new title. They need fairer trading terms and a rebate compensating for brand building from which the publisher will reap rewards quite possible after they have turned their back on newsagents.

We have been running a magazine loyalty program in my newsagency since August 2004 resulting in same store sales growth of more than four times the national average. Australian Women’s Weekly is the single most redeemed magazine. That is, it is the title most customers choose as their free magazine. Last month, 10% of our AWW sales were copies redeemed as a result of our loyalty program. I am curious as to what it says about the title. I have talked to two customers this week who chose AWW for their free magazine. One said it was her treat, she was proud that her husband’s magazine purchases led to the treat. The other was pretty blunt “I wouldn’t buy it bit if it’s free…”. She went on to say she loves the magazines but that she didn’t have as much time as she used to.

My feeling, from across the counter, is that the considerable activity at the weekly end of the women’s magazine space (new titles, reinvigorated titles, more promotion) has pulled focus from the monthlies. The weeklies of today are deep inside what was the playing field of the monthlies. The monthlies, if they are to achieve growth, need to play in a redefined space.

Australian Women’s Weekly is a beacon title built around quality production and content. Maybe putting it in supermarkets and other mass locations distracts from that quality. Maybe some of the cover choices do not resonate – Oprah for example. Last month in my store we sold out in just over a week because of the Beaconsfield mine related coverage. I suspect that more of this type of coverage would boost sales. If I were in an editorial meeting I’d be saying – think Australian Story. I’d connect those stories with a TV Show and leverage the PBL cross promotion opportunity. No one is doing that today in the human interest area. Better Homes and Gardens does it in the DIY/garden/homemaker space brilliantly. There is a sales kick every Saturday.

Emap’s ZOO Weekly has dropped its cover price again and sells at $1.95 this week. Newsagents need help supporting the title. I’d like the publisher to provide point of sale materials to enable display of ZOO next to newspapers. Many newspaper fixtures do not facilitate this – hence the suggestion that the publisher provide a stand to encourage the add sale with a newspaper purchase. Without such a unit, ZOO is placed with men’s titles and that’s a long way from newspapers. I see ZOO as an Alpha type purchase and Alpha comes close to selling out when promoted next to the newspapers.

The UK House of Commons has before it a bill which calls for all sexually explicit magazines to be hidden from children. The target, according to reports, is what are called the Lads magazines. We face similar challenges here with Picture, People and ZOO Weekly and while our OFLC has guidelines, retailers like newsagents are not required to isolate the titles. With more than 1,200 titles in an average newsagency, the best that can be achieved is that the titles are put in the right location. No one seems to know what the right location is.

Twenty two months after we launched Australia’s first magazine loyalty program it continues to power extraordinary growth for us. To the close of business yesterday (June 26) magazine sales were up 16% for the same June period for the same store a year earlier. This is extraordinary growth by any measure. What started in my shop is now offered nationally through the newsXpress retail group. It has also been copied by many individual newsagents and two marketing groups.

The Magazine Club Card I created promotes the whole category. The average redemption costs $5.00. The program itself has a cost of under 2% of total magazine sales so with growth of 16% plus add on sales in other categories we continue to be well ahead.

Customers reward themselves with the free magazine. They often tell us that without the program they would not get the free title chosen. Australian Women’s Weekly is the most redeemed title – customers tell us it’s nice to have the luxury of it without spending anything. In reality, with the way we run our loyalty program, they are spending more on magazines in our store. There’s no doubt we’re pulling some sales out of supermarkets nearby – but not enough for them to notice.

The keys to the success of this loyalty program are: it’s simple; there is no registration; if provides real rewards (and NOT points); we delight in giving away the free magazine.

Maybe it’s just my shop but I suspect not – sales of New Idea and Woman’s Day were up 60% yesterday comparted to the anverage of the last four Mondays. That’s amazing pulling power for the Kidman / Urban wedding. To compare, TV Week and Famous were up 10%.

Staci Kramer, Executive Editor at Paid Content has written about the online strategies of new magazines. Staci asks: Does starting with a blank slate make it easier than integrating digital with existing magazines? I’d say, yes. Here in Australia magazine startups in the last year which have arrived with a well executed online strategy include Explode (magazine closed and website lives for now), Cosmos and Zoo Weekly. These new titles have developed their online models with ease not matched by more established titles.

Just as online needs to be a key part of a new title launch, it can also play an important role at the end of print life. Many small print run specialist titles could be more profitable for all concerned by moving from a print model to online.

Here are four of the Mustang titles we carry in my newsagency. Each takes a pocket of real-estate. Each has a sell through rate of 50% or less, some at 25% and even 0%. None is cash-flow positive. The performance of these titles is worse this year compared to last. Last year was worse than the year before. Through the course of a year I get more Mustang titles than these four. Consumer interest in Mustang titles is over satisfied based on what I, and I suspect other newsagents, receive. Given that there are three magazine distributors and no one taking a whole of market view of consumer satisfaction the Mustang and other fringe categories the problem will not be rectified. Newsagents carry the financial burden of this.

Car magazine sales are in decline. Newsagents would not know this based on the range and volume of titles they bare supplied. Magazine distributors have an obligation to adjust their supply model to reflect changing consumer interest. They also have an obligation, to work together to balance categories. While this would mean collusion, the alternative is what we see today and competition between distributors with each bringing in magazine titles of dubious value to newsagents. As long as magazine distributors profit from distribution rather than sales this problem will exist and newsagents will be the losers.

The more space taken on my shelves by oversupply in categories like car magazines and, specifically, mustangs, the less space (and time) I have for the main magazine game, the top 200 titles.

New Idea has been flying off the shelf this week not just in our shop but plenty of others in Victoria. It seems the Rex Hunt lover story is the hook. I’d love to see the return on investment for that story compared to the Brad and Angelina baby photos.

My New Idea supply has been cut by 25% without warning. The new supply quantity is less than I sell on a usual week. We will be sold out from early morning today leaving us five days without New Idea on the shelves. Our return rate from the last 12 issues has averaged just under 20% so I can understand a supply adjustment of, say, 10%.

If newsagents are as important as Pacific Magazines claim, they would not use a supply model which inflicts such a supply cut. The more appropriate approach would be to advise us of a planned cut of no more than 10% and to allow discussion. I could point to last week when the Brad Pitt Angelina Jolie baby edition sold out on the back of 10% more stock. Had they asked my opinion I would have also advised that they delay any cut until after school holidays as we traditionally sell out at those times. School Holidays started two days ago.

Elsewhere in my shopping centre the supermarket shelves are loaded high with New Idea. Customers who cannot get their fix from my shop with go there and maybe I will lose some for good.

It is decisions like this which are killing the newsagency channel in Australia. The New Idea decision is starving my business of vital oxygen this week.

UPDATE (11am): Pacific Magazines responded quickly and delivered enough New Idea stock today to see the week out. They are researching the initial supply cut. I’m happy to have the stock on the shelves.

Popular Mechanics is dying. I suspect that monthly sales are under 10,000. We usually get two copies and we’re lucky if we sell one. Cover price is $10.50 so even if I sell both copies I am barely cash-flow positive for the month. Based on my numbers and what I suspect others do, Popular Mechanics should be killed off – in Australia at least. Imagine my shock, therefore, when this month, instead of the usual 2 I received 10 copies. It’s part of a promotion in pursuit of sales. Okay they were paying for me to display the extra stock but the fee is less than the real-estate costs. This title is dead and no amount of promotional CPR is going to bring it back. Someone needs to turn off the life support. In the meantime, the promotion this month costs me $78.75 in cash and I won’t realise on the unsold copies for another eight weeks.

Popular Mechanics is not alone. I could list another fifty titles just as lifeless.

And while we are drowning in these titles we continue to struggle to get enough stock of the popular weekly titles. I feel like an anorectic glutton.

Two years ago newsagents were supplied one or two healthy eating related titles. Now, we are supplied ten or more, depending on the time of the year. Sales in this segment are exceptionally strong in many newsagencies. I am not talking here about the diet related magazines like the excellent Symply Too Good series by Annette Sym. My comments relate to titles such as Healthy Food. We usually sell 3 or 4 copies a month. This week I moved Healthy Food next to the newspapers (in a secondary spot we usually reserve for New Idea or Woman’s Day)and we sold 5 copies in two days. The speed of moving the stock tells me the segment is hot – as long as the magazine looks appealing.

One of the challenges for newsagents with healthy eating magazines is whey they are located. Do they go with health and fitness or food or women’s interests. Each of these segments can be a distance from the other. My feeling is that with new titles recently arrived we need to feature the segment to let or customers know that we’re strong in this growing space. In the meantime, I’d expect the weeklies to pick up on this stronger interest in healthy food – but then, cellulite on a scared looking star makes for a better cover.

While yesterday was a public holiday and today has barely started, the babies of Bec and Mary attracted more attention. Based on the limited data I have seen I preduct a jump of between 10% and 15% for New Idea for this issue.

Some magazines not knows for cut through covers are standing out at the moment. Money, The Monthly, Mortgage and BRW are demanding full cover display on the newsstand with covers like these.

With the backing of Magazines Canada, The City of Toronto has proclaimed June 5-9 Magazine Week. Canadians will be encouraged to buy and read Canadian magazines through public awareness campaign at retail outlets across the country. To mark the occasion the association is also running a contest, offering five lucky winners a free one-year subscription to any member magazine.

Source: The International Federation of the periodical Press

Interesting feed back at the Australian Car Advice & News Blog on my earlier entry about the fall in car magazine sales. The blog is not your usual journal or diary. This is a well written blog covering news and opinion you’d expect to read in the motoring pages of a newspaper. It illustrates my point that consumers have access to sources online without cost compared to the often out of date car magazine on newsagent shelves.

Further analysis of January – May sales data shows a fall of around 10% in sales recorded for motoring magazines. I’d note that for the same period we have seen new titles issued.

With three magazine distributors competing with each other and a model whereby they receive fees for distribution, this will happen while sales slowly decay. If distributors were only paid on the basis of retail sales (as happens with newsagents) we would see far fewer magazines in this country.

There is a case for the magazine distributors to collude with newsagents to control the number of new titles published and or imported. Newsagents are the losers from the current situation because they get no say in the titles they are sent and it’s their cash at risk every day.

The 10% fall in motoring for the small group of newsagencies I sampled suggests to me that this once powerhouse category is in long term decline. It makes sense when you consider the quality and timeliness of specialist websites in the motoring area now.

Further to my earlier post today on magazine sales in May, sales in the computer category are down between 8% and 17% for the stores I have looked at. Newsagents carry too many titles in this shrinking category.

May sales data is full of red ink for buying and selling titles. Trading Post, Trade-A-Boat, Parts Peddler, and Businesses For Sale are some of the titles in this category. Looking at same store data I have seen unit sales for the category fall between 15% and 33% comparing May 2006 to May 2005.

Some great magazine subscription discounts here for students. Great discounts on a considerable range of magazines. Take WHO, for example. Students get it for 40% off cover price plus free home delivery by Australia Post. Newsagents get 25% off the cover price.

Overheard two customers talking in my shop today when considering a New Idea purchase (Bec Hewitt is on the cover). One said to the other, don’t buy it this week with her on the cover. She makes a fortune selling her stupid stories. The other lady quickly dropped the magazine and left. Based on the sales data I have seen from yesterday in a few newsagencies, the Bec factor is not as strong this week as on other weeks.

We put Australian Women’s Weekly front and centre of our shop last Wednesday for five days. We achieved a welcome sales kick compared to the same first five on sale days for the previous four issues. We broke the rules, ditched the glossy brochures, took the magazine out of its usual place and created our own basic display. The result is a 45% increase compared to the previous best first five days. This demonstrates the value of a non-corporate local newsagent approach to pursuing sales growth and that impulse sales can be achieved for a title like Australian Women’s Weekly.

While the publisher prefers and rewards kick arse retail displays, it’s more basic activity like what we did last week which is more valuable to them. Newsagents are rewarded weekly for feature magazines displays. Our display would not receive any awards. However, the sales kick we achieved is greater than what you would get from any pretty display.

Since Burke’s Backyard was taken off TV, sales of the magazine of the same name have been falling in the newsagencies I see data from. What was once a strong title is fading fast. This is disappointing because the product is good – but not sufficiently top of mind to be self supporting. The category is strong – Better Homes and Gardens sales are as strong as ever. My feeling is that the fall off for Burkes Backyard is greater than we saw for Money when that TV show was taken off the air.

Woman’s Day is not the only title enjoying a sales lift thanks to more coverage of the Beaconsfield mine rescue from what I can see. Australian Women’s Weekly went on sale yesterday and our sales were up 150% on the average of the first day’s sales for the last six issues. Sure, we pushed it at the front of the shop (see photo above) – it’s what all reatilers shold do with this issue given the massive TV support from the nine network. The Bulletin (also with beaconsfield coverage) sold out.