magazines

Sales of TV Week in my newsagency were up 25% yesterday thanks to the 3D cross promotion for the Medium TV show. Because of a 22% supply cut three weeks ago I’ll sell out today and have no TV Week stock for five days. This will turn customers away, maybe some will not return – such is the fickle nature of magazine purchases. I could buy replacement stock from Coles or Safeway as they have plenty but that would screw with the sales data I provide to ACP. ACP agreed that the 22% cut was too severe and that it would be fixed. I’m waiting.

If you think I am complaining unreasonably, consider this. PBL owns ACP and Network Services. ACP is tight with magazine supply – supplying close to sales quantities to newsagents to minimise wastage and maximise return. I’d do the same if I were them. However, this model makes it challenging for good newsagents to chase significant growth. Network Services, on the other hand, supplies based on a model I cannot fathom. There are titles with a return rate of 50% or more, that is we sell less than half we receive, and Network has just increased our supply.

So, one part of the PBL group is choking us while the other is drowning us.

This is why the ACCC needs to review the magazine supply model in Australia. Newsagents have been left disadvantaged by the increased competition as our competitors get to choose the product they carry. It is in the supply model for titles outside the top 200 which needs the most urgent attention as this is where newsagents have been made less competitive.

In my newsagency, sales of Woman’s Day were up 23% yesterday compared to an average Monday. I’d say this is on the back of the stories with the miners. To compare, New Idea was up 12% yesterday.

Star Enquirer, a magazine I’ve written about here several times, has finally been put out of its misery. MediaWeek reports today that the May 24 issue will be the last we see of Star. Star entered a crowded space and was soon challenged by the more focused Famous and renewed challenges from New Idea, Woman’s Day and NW.

SpotBit claimed to offer free downloadable versions of over 150 current magazine titles. Today, three days after the launch, all that’s left are some adult titles. Gone are the mainstream news, entertainment and other titles. You can find the launch story are mediabistro.

We usually sell 4 or 5 copies of Digtal Camera World. Despite flat net sales, our distributor, Newsagents’ Direct Distribution, has increased supply four times in the last five months. Now we are getting 10 copies. There is no justification in our sales data for the increase. This extra stock costs more labour, takes up more real-estate and uses more cash. NDD has an obligation to scale magazines out to newsagents on an equitable basis. Increasing supply, as in the example I have given, is, in my view, unconscionable.

An interesting blog post read: Why most men’s magazines are crap!.

Top 10 magazine and daily newspaper sales fluctuate considerably more than the industry average in my newsagency and it’s been bothering me. My location is not that unusual and the centre not that remarkable in creating traffic fluctuations. The fluctuation was happening only among top selling products and in the same weeks for most titles. I have put in many hours pouring over data to find an answer. While I have only looked at data for the last three monthsfrom my store, the theory I am developing is that the fluctuation is caused by lottery jackpots. My sales climb commensurate with the size of the jackpot and then fall with a thud in the week when there are no jackpots. This means that the jackpot punters are either buying their magazines and newspapers elsewhere or not at all. Regardless, it means that we’re not doing enough to build the non jackpot purchase habit.

Once I have looked at data from last year for my store I’ll look at data from some other newsagencies to see if I am onto something. If my theory is right, newsagents need to act now given the lottery changes due within the next two years.

Great to see The Bulletin running hard with the Beaconsfield mine story this week and that they have scaled out extra copies to retailers. Should sell well.

Compact format magazines are gaining popularity. Originally only found in children’s titles, they are popular with publishers in the hair and fashion categories. Small format magazines are a challenge to display in that most existing retail fixturing is designed around fill size magazines. These small titles barely peek up from the magazine pockets. Another challenge is when publishers try and try and grow beyond their own new small border. Take this issue of Glamour. It’s a compact title but demanding, this month, more space because of the giveaway included.

Anecdotal customer feedback is that the compact titles are frustrating except in the shopping guide space. Most seem to prefer the regular size titles.

Magazine publishers seem to be addicted to giveaways. Just about every day newsagents receive a new issue with some promotional product attached to the cover or in a sealed bag with the magazine. The marketplace is so cluttered that these giveaways no longer represent special value. They are the norm. In fact, in many cases they get in the way of a purchase since sealing the magazine in a bag either stops it being browsed or leads to the bag being opened and damage done. Take a look at Who this week and OK! Australia this month. Both have the same coffee sachet. A rip on the sachet and you lost four or five magazines with damage.

New Woman has upped the ante this month with its umbrella giveaway. It’s walking out the door. The challenge was stacking the product when it arrived – another problem for retailers with chunky giveaway product on magazine covers.

GQ is a problem this month with the American Crew grooming products. Newsagents can only fit one copy in a pocket and when you stack them flat they fall everywhere. The problem is compounded when you have fifty or more titles on sale at any one time with giveaway product attached.

Magazine publishers chasing a point of difference might consider breaking their addiction to giveaways and focusing on their product. I know retailers would be happier.

Further to my April 28 post of Reader’s Digest oversupply, it’s been pointed out to me that a major supermarket group has cut Reader’s Digest from its shelves. Thus must leave thousands of copies to be placed elsewhere. Newsagents, being the least place of resistance in the magazine supply chain, are the victims. Of the fifty newsagents I have had contact with on this matter, only one is being supplied with an economically viable quantity of Reader’s Digest . Most have been hit with unnecessary supply increases which drain cash from cash-strapped newsagents. The only reason a newsagent should be supplied more stock of any title is when the sell through rate of the title passes an industry agreed threshold. I’d suggest that a sell-through threshold of 90% for titles outside the top 200 is reasonable. To increase supply when the historic sell-through is 30% is a breach of trust and, I suspect, the Trade Practices Act.

Newsagents are the only retailers carrying titles outside the top 200. They have little or no control over the titles they receive and the volume. They rely on magazine distributors to scale out based on current sales data. The Reader’s Digest experience suggests that sales data is not being used to determine scale out.

My software company’s newsagency management software warns newsagents about oversupply. Unfortunately, many newsagents do not act on this because they have given up trying to rectify oversupply issues. It was only after I bought a newsagency ten years ago that I started to understand how de-motivating some aspects of the magazine supply model can be – especially for titles outside the top 200.

A fascinating blog post by Arianna Huffington on Magazines and the Internet. It’s worth reading as are some of the many comments – some excellent views for those interested in the impact of the Internet on publishing. As Huffington says and I have written here many times, content is king – now more so than even thanks to the many publishing platforms available.

The Internet provides an alternative publishing platform for the titles which do not justify printing, distributing and displaying in retail stores. The challenge is getting publishers of these poor performing titles to take the step and stop costing the industry millions in efficiency.

Huffington has made a name for herself for in citizen journalism circles. She was in the news a few months back for some “issues” with something claimed to have been written by George Clooney and published at her Huffington Post.

I’ve had my TV Week supply cut by 22% this week. This is because I have not been selling out. The cut to supply takes be below my net sales. However, magazine sales being what they are we will not sell out of the lower quantity because customers tend not to want to buy if there are only one or two left on the shelf. So, the 22% cut becomes a self fulfilling prophecy. In the meantime, the supermarkets in my centre return more TV Week product that I get supplied at the start of the week. It’s a supply model which I don’t understand at all.

Footnote (11/5): ACP Magazines has responded to our request and lifted our supply of TV Week to a better level. This is a good outcome as it allows me to better promote the title rightt throguh to week end. This will encourage us to further push the title.

This image is taken from the current issue of Fast Car magazine. “Sweet Cuntry Hunny” is the label on the jar and the browser is encouraged to “flip me over and check out my goods”. On the flip side the photo is repeated with the text: “Vicki’s honey pot exposed”. Given that there is no warning associated with this title it’s on display in the car section for all to see. Most unfortunate.

Bark magazine, launched mid 2005, continues to sell well. Sure it’s not a high volume weekly or monthly (the title is bi-monthly). It is, however, reinforcing the range point of difference for newsagencies. On the other hand, Bark is an example of the challenges newsagents face – it’s hard to give the title space to grow in the animals category because of the clutter of other, some lesser performing, product. We’re having impulse success bringing Bark out to the front of the shop.

I’ve thought for more than a year now that current affairs magazines were close to death. Sales data told the story: down, down, down. Since the death of Kerry Packer, however, The Bulletin has improved in terms of appeal and sales, Time is selling (and promoting) better and The Monthly has realised it has to connect with the consumer. While the category remains tiny in the overall magazine space the data I am seeing suggests it is growing. We need more weekly categories in magazines to strengthen the habit. Consumers are responding to more commercial covers and what appear to be more relevant stories. Better covers mean that smart newsagents can safely put the title in a high traffic area such as near the newspapers or even on the counter.

Time is doing a great job promoting its weekly to newsagents including providing a cover shot in advance of product for those running in store LCD displays. It’s small efforts like this which support the retailer and boost sales.

While on The Monthly, Alan Jones is on the cover. The cover shot, while interesting, won’t help sell copies of the magazine because he is not a recognisable as he would have been in a more regular shot.

“Newsstand sales will be improved by systematic pruning of titles.”

The April 2006 issue US published Circulation Management arrived yesterday. Writing on page 26 Baird Davis recommends to the US industry that they need a Title Proliferation Prevention Czar to develop distribution criteria (KPIs) which must be met before a title is approved for distribution.

“The magazine publishing industry must move beyond its self-destructive bickering and fear of governmental collusion roadblocks and adopt a program that reduces the display rack overcrowding conditions that are plaguing the newsstand market. Nothing less than the future of the newsstand channel is at stake.”

It will be no surprise to regular readers here that my view is Australia could use such a Czar – someone to decide if a title justifies being distributed. As it stands today, importers, publishers and magazine distributors make as decision about a title to be distributed. Newsagents have no say. Yet they carry a high cost of such decisions by having to provide labour and real-estate for potentially no return. Magazine distributors are paid a fee for use of their services.

I proposed such a move a month ago at a meeting with the magazine distributors. The immediate barrier is the ACCC. I am sure that once the ACCC understands how the current arrangements disadvantage newsagents by draining cash and making then inefficien and less competitive they would consider the suggestion. Consumers risk suffering because newsagencies will fall over and more magazines will be sold through the majors and this will result in a reduction in range.

Newsagent shelves are overflowing with underperforming stock is such quantity that they cannot adequately display the titles which are delivering growth. ACP and Pacific are suffering from the faulty supply model.

Newsagents are supplied stock based on what a distributor has to distribute and not based on what actually sells. This is what causes overcrowding of retail shelves and the drain on newsagent cash.

How many hair magazines do I need to satisfy consumer interest? Six, eight, fifteen? The Czar could consider this holistically rather than the current situation where each of the three distributors make decisions in isolation.

Without urgent action to fix the supply model to something more equitable for newsagents, the model itself will fail. Barid Davis’ suggestion for the US would be welcomed here by newsagents.

Zoo Weekly drops from $3.95 to $1.95 next week as it tries to get blokes in the habit of a weekly magazine purchase. The key is to get the magazine located near newspapers. This would get Zoo picked up with the daily newspaper purchase. At present it’s next to Picture, People, FHM and Ralph and they are usually located away from the main traffic area. The price drop is currently for one week only.

Advertising Age reports on the Magazine Publishers of America second “Magazine 24/7” conference held in New York last week. Attention seems to have focused on the challenge of the impact of mobile devices on how people access news and information. As I have noted here for some time, the story is the thing. I am certain that magazine publishers will release stories so that consumers can track and purchase their areas of interest through other content aggregators rather than buying a whole product (magazine) with 50% or 60% content of no interest to me. This, of course, is a step beyond masthead websites such as those for Vogue, Girlfriend and others. It is also beyond the digital editions of magazines such as Sports Illustrated and Playboy.

While the evolution of magazines continues, consideration needs to be given to Australian newsagents who continue to be supplied by magazine publishers, through the three magazine distributors, as if no evolution to online and mobile is happening. Indeed, in the last year more than 400 new titles were supplied to newsagents and while some titles were killed off, there was a significant net increase in titles supplied. This is a problem for newsagents because the only real growth is happening at the top end of the marketplace. Outside the top 100 or 200 titles sales are flat and even falling. The supply model needs to be adjusted to reflect this. Lack of change to the supply model means newsagents are carrying more of a burden and this is at a cost which is unsustainable.

Comparing the performance of weekly magazine titles to monthlies and looking only at titles in the TOP 200, the data I am seeing from newsagents suggests that monthlies are struggling whereas weeklies are growing. If my small sample accurately reflects a national trend it’s proof magazine buying habits have changed.

Despite having some fans as documented here recently, Explode magazine has been terminated according to a report from Mediaweek this morning. If I were Pacific Magazines I’d keep the website and build the brand from there. That’s where the target age group is.

Magazine distributors can be like credit card companies. If you don’t need it they’ll give it to you anyway. My bank wants to give me more credit even though I have not used even a quarter of what they gave my on my card. “You’ll never know” was their justification. The distributor of Reader’s Digest increased my supply by 50% despite usually selling only 50% of what I used to receive. The increase made no sense. There was no business case. All this increase would do is suck cash from my business as I would return the unsold stock a month later and get the cash back a month or two after that. In all I’d be out the cash for up to three months. The benefit for the distributor is they would have my cash. I can’t imagine that Reader’s Digest would be all that happy.

Thankfully the magazine distributor is going to correct the situation. My point is that it shold not have happened in the first place. Many newsagents would not complain. The end result would be less space, time and money for more successful titles.

The magazine supply model in Australia disadvantages newsagents. Supermarkets and others would not face the situation I faced with Reader’s Digest. Despite providing high quality sales data on time, there are still suppliers to newsagents who ignore this for their own commercial gain.

That’s no way to treat a trading partner.

Vogue has has kicked its online play up several notches with its coverage of Melbourne Fashion Week. It’s website, which was already attracting excellent traffic (see earlier item) will have won new visitors many of whom will stay. What this means for the print edition will only be seen with time. If consumers get their fashion fix online then maybe they feel less compelled to purchase the magazine? It’s unchartered territory and while the publisher will say there will be no impact, there must be. I’m not saying the magazine will ultimately disappear. I am saying sales will fall as a result of an excellent website under the same masthead.

Any magazine with a good World Cup cover story will sell well over the next eight weeks if the current crop are anything to go by. Even the series DVD is walking out the door. It’s helping the struggline sports category win some customers back.

I get more comments about my blog entry on Explode magazine than any other. Every few days another comment lobs in my inbox. 80% are from teen males and positive and 20% from girls or parents and negative. regardless, Explode is a popular title. The impression I get is that teen males talk about Explode among themselves and this is where the slow but steady sales growth is coming from. The passion they express in their comments about the magazine surprises me. I was somewhat critical of the content and many went ballistic. I’ve been critical of many magazines over the last 16 months of blogging and Explode responses outstrip those for other titles by far.

The comments, over the last four months, range from this from a teen boy:

who ever wrote this is a moron explode is an excelent mag but u dont see it this is a short letter just saying ur a loser without brains this is however from a 13 year old i love the mag but for now good bye moronic ass

To this from a girl:

what makes the magazine so excellent? it it even educational? coming from a 13 year old i see you obviously haven’t developed brains just yet, who’s the moron now? how do you think 17-18 year old girls feel by being exploited for little boys like you to just stare at. it’s quite obvious that girls develop maturity alot quicker & could possibly be the reason that in most relationships the boy is older. find something else to read

To this from another teen boy:

im a teenage male and i buy the teenage Explode magazine and i think that the explode magazine has made males read magazines more therefore more are reading not less

While there’s no doubt that Explode is exploitative, I appreciate that it is pulling a demographic into my shop and therefore educating a new generation of newsagency shoppers. The challenge is to retain these people as magazine consumers versus Explode website visitors. The website is excellent and mirrors the tone of the magazine perfectly. Right now the more valuable content is in the magazine. All it takes is a financial model to make the website more valuable than the magazine itself.