magazines

I’ve had a small publisher contact me complaining that if newsagents stop stocking product because it does not perform then companies like his will close as they will lose a very cost effective retail channel. In his case, I receive 2 copies of his $6.95 monthly magazine and usually sell one. I earn $1.74 commission. The retail space costs me $3.00 per month. The title and pocket cost me $1.50 per month to service. So, I have to generate $4.50 per month from a title to break even before I start to recoup non real-estate and labour operational costs. The $1.74 from this title represents a loss for me so I should stop stocking the title. (Achieving that with some magazine distributors is challenging because they believe that I do not have the right to stop supply of a title not performing in my shop.)

Back to my dialogue with the publisher. he says if newsagents stop carrying his title his magazine will fold. Maybe it should fold because right now he is only surviving because newsagents like me are prepared to carry his title for a loss. In effect we’re investing our capital in his business every month. That doesn’t make sense to me.

This small magazine needs to find a publishing model which works for it rather than leech off the ignorance and good will of small business newsagents.

NW has a bright green masthead this week – making it stand out in the crowding women’s weeklies section on newsagent shelves.

The WHO Weekly once off price drop to $2.95 is working with consumers – sales have been very strong. In my own store I’ve seen people who usually ignore the title purchase it because of the low price. It’s a great way to get people to take a second look.

ZOO Weekly is soft in its third week. Compared to Picture and People it’s slipping. Blokes are not weekly magazine customers. But maybe they are in enough places to warrant the title being published.

The Commonwealth Games Program is selling very well.

Magazines were up 7% in February this year compared to last in my store. What’s interesting is the Buying & Selling, Food & Wine and Computers & Gaming categories were all down 20%. It’s been this way for a year now. These categories are in serious trouble yet newsagents continue to get loaded with stock.

Famous, the new weekly magazine from Pacific Magazines, has been on sale four days and it’s time to check in with performance. Taking a look at data from my newsagency and several others the title seems to be getting good traction. Sales can be misleading so I have looked at sales for Famous compared to sales of WHO, New Idea, Woman’s Day and Star in those stores. Famous is selling well with New Idea and Woman’s Day. There are some instances where it is sold alone but not many. While it is unfair to compare the titles, I’d note that Famous is selling better than Star is (even now) in several stores.

The Famous cover does not have quite the cut through a new title needs. In the magazine rack, between all the weeklies, it does not sufficiently stand out. That will change. Look at the tweaking of New Idea, Woman’s Day and NW. They have all benefited from cover design adjustments.

I compared Famous to ZOO, the other launch this week (last week’s ZOO was free). In the stores I have seen data from Famous is doing better than ZOO. ZOO is extending the reach of a category whereas Famous fits within a well established category so the ZOO road in pursuit of an audience will be longer. It’s worth noting that ZOO is more often sold with a newspaper.

WHO is celebrating its birthday today with a 50% discount to its cover price. Time has done a great job getting information out to newsagents to promote the special issue and publiding momentum in the public. We decided to order more stock so we could make an impact and while the stock was available from the warehouse prior to today’s shipment we’re having to drive from Forest Hill to Laverton and back to get the extra 50 copies in time for the weekend. Network, the distributor, suggested a Monday delivery but that would be too late. The point of this is that driving for two hours for 50 copies (gross profit value – $31.25 – seems nuts. But you do it if you’re focusing on the magazine category in your store. Coles or Woolworths would not pursue business in such a micro way but then they don’t need to.

I was remiss in not mentioning that this month Ralph is giving away thongs. So that’s three magazines giving away thongs in January/February. At least with the Ralph giveaway, as opposed to Shop Til You Drop, the blokes are not putting the magazine on the floor to check the size of the thongs.

In January thongs were used to help sell Shop Til You Drop. This month Girl Power is using thongs to entice buyers. I guess that means more people trying the thongs before they buy.

The real-estate battle has begun in newsagencies today. Famous has launched with a counter unit, a slick looking floor stand and a bunch of other point of sale material. The support for a strong in store display from Pacific is fantastic.

The floor unit.

The counter unit.

At the front counter with other women’s weeklies.

In the main magazine display next to women’s weeklies.

The space and time available for the Famous launch is challenged because several titles out today and wanting to feature in store: it’s the 1 year anniversary edition of Madison, the New Weekly is engaging in a major in store promotion, Burkes Backyard has a design CD giveaway and the second issue of ZOO Weekly is out (with a free standing floor unit which needs to be at the counter.

All this magazine activity is fantastic. The challenge (speaking selfishly) is having enough stock on hand to adequately promote these feature titles.

The Monthly, a self intelligent and witty magazine, has a cover story this month about Google. Gideon Haigh, author of the cover piece, investigates Google and suggests that it may actually be making us stupid. I accept much of what Haigh writes – it’s a worthwhile analysis of Google.

Footnote: The Monthly makes me stupid, as a newsagent. The magazine sells for $6.95. I need to sell three copies a month just to cover the real-estate costs. Sometimes I sell more than this but most times not. So, I’m losing money on the title. By having the title on the shelf I provide a browsing opportunity for consumers. They can see, in the magazine, the subscription offer: $39.95 for a year whereas buying each copy from my shop would cost $76.45 ($57.33 of which goes back to the distributor and publisher). I have no real control over whether I carry the title. It annoys me that the publishers and distributors use newsagent real-estate to build brand awareness and at the same time seek to cut out newsagents and go direct. Yeah, I’m the stupid one.

More and more Australian magazines are making their way on to eBay even before they come off the shelves. Current issue copies of Woman’s Day, New Idea, Filmink, OK Australia, TV Week and Limelight are listed at a premium of around 25% above cover price. Shipping can double the price. If eBay works then why not? The price of the products is a surprise though.

It’s not often you get customers asking about a new title days before the first issue has arrived in store. Famous is no regular magazine launch. Pacific Magazines is doing plenty right with this launch. Newsagents have received excellent pre-launch material along with some champagne. The marketing groups have been engaged in strategies for driving sales. And, now, the consumers are having their interest nicely piqued thanks to their advertising campaign. Monday will be interesting. Once we’ve found real-estate in the already full women’s weeklies section to display the title we’ll await sales results with anticipation. So far, Famous is looking like the best launch so far this decade.

I’ve been leading a four month study into the cash flow implications of magazines in newsagencies. The first industry briefings have been scheduled and the details can be downloaded here. At this briefing I will outline the impact of cash flow negative titles and present new evidence of the impact on cash, month by month, of the current magazine supply model.

Madison magazine is now one year old and in my store it’s just become profitable. We measure the profitability of a magazine by it’s net cash contribution – after allowing for real-estate, labour and stock costs. Indeed, Madison is more beneficial to my business than more established titles such as Ralph and FHM. Madison joins the 30% of titles I receive which are profitable. In the Women’s Interests category, where Madison resides, it’s one of ten monthlies we feature – a position earned through sales success. The biggest challenge to sales growth for Madison in newsagencies like mine is to have enough stock to display the product adequately. What we receive has to be balanced by the publisher’s business model and what represents the best return.

Famous, the new weekly from Pacific Magazines, launches next Monday and Pacific are actively engaging with newsagents in promoting the title. The latest information – where to place the title, target market and positioning information – came with a small bottle of champagne. Compare this to the launch of Star in the same segment last year – the product arrived on the doorstep. The Pacific approach is building anticipation among newsagents and employees.

While on launches, the launch issue of ZOO is out of stock in many newsagencies just two days in. It’s free so no surprise there. However, it says something about their advertising and marketing that people came in asking for the title.

I’d like to think it’s my shop and the great team – today our sales for New Idea, Woman’s Day and TV Week were up 30% on a usual Monday. Given that we usually sell around 60% of the seven day sales on a Monday it augurs well for the rest of the week. Good interest in ZOO as well today – including girls asking for the magazine.

ZOO, the new weekly men’s magazine launches today. We received 29 copies. The pitch is that we offer issue #1 free to males buying a newspaper. At our current rate we’ll be out of stock by 11am. A more appropriate launch scale out would have been 150 copies. Hopefully we’ll get more stock by Wednesday.

Publishers launching new titles would do well to look at how Notebook, Madison and Real Living were launched last year. Good supply quantities to enable bold in store displays. Stock sells stock.

Pacific Magazines and ACP Magazines both released merchandising units for New Idea and NW respectively last week. I’m guessing this was done in preparation for the arrival of Famous. As I have noted here already, real-estate is the issue in newsagencies with all available space currently used. The real-estate Famous takes will have to come from somewhere. Publishers want to see their weekly titles at the counter whereas newsagents would prefer higher margin product. In the magazine aisles the battle is tougher with many newsagents already over allocated with titles space wise.

Product giveaways attached to the cover of magazines are popular with consumers and regularly used by publishers. In most cases there is a good sales kick. While retailers (like me) occasionally get frustrated at the display challenges we embrace the opportunity in pursuit of sales. This month’s Australian OK! magazine has a sachet of coffee granules attached to the cover. It’s a nice giveaway. The problem is the glue is poor quality, meaning that the coffee sachets fall off and the glue on the magazine cover looking like snot. Not a good look. This reflects badly on the retailer and makes for considerable mess to clean up.

Sales for the recently launched Star Enquirer have finally started to improve. I’d say this is in part due to better publisher support with merchandising material. While the product is lacking in terms of feel compared to its competitors, merchandising material (any at all) is a help.

ZOO Weekly(aimed at men 18-34)) launches with a free sample issue on February and Famous (aimed at women 18-34) launches on February 20. With Monday as the on sale day for both these new weeklies, getting display attention will be a challenge with New Idea, Woman’s Day, TV Week and NW already claiming prominent real-estate on the same day. Given that weekly magazines achieve, on average in newsagencies, above 50% of sales on the first day of their on sale period the real-estate challenge will b felt somewhere – either with less space to promote existing titles or insufficient space to support the new titles.

A weekly magazine requires a full tier of space to create a reasonable retail presence. This means nine pockets and a flat stack area. Finding this for two new titles will be a challenge for many newsagents. It will be easier in the women’s weeklies area than in the men’s section.

An additional challenge for ZOO will be the shopping habits of the male purchaser. Male magazines are in the high browse/low conversion area of the store. Whereas women’s weeklies are high traffic and quick purchase, men’s magazines are where blokes come to pass time. Getting blokes to enter their space with a difference mindset will be a challenge. That ZOO is entering the space with a free copy is a bold move and follows what worked for Alpha. I’m not keen on the giveaway model but if it works, hey, why go with it?

Having new titles supported by stong advertising campaigns is great. The challenge is with two so close to each other and both going on sale on a Monday.

The crossword magazine category has always been strong. Thanks to regular new Sudoku and Kakuro titles from Lovatts and others the category is outperforming most others. This is curious given that crosswords are usually located in a more out of the way part of newsagencies. Double digit growth in 2005 in crossword sales make them valuable to newsagents. The value is magnified when you take a look at basket data showing that crossword customers are more like to purchase multiple titles compared to most other magazine customers.

In my store we’re pushing the envelope in terms of crossword sales by co-locating key titles like the Lovatts Sudoku and Kakuro titles. We have a strong crossword category display and a secondary display at our two sales counters. They make a great impulse buy.

So while magazine analysis continue to spend time looking at and discussing the higher profile women’s weeklies and monthlies, there are titles in the crossword segment performing just as well.

David Burkett, the new head of Time is Australia is quoted in the latest issue of advertising trade journal B&T (page 4) talking about their online push this year. he mentions Bride to Be and Practical Parenting as the first titles which will benefit from their heightened online focus.

This is a logical and even overdue move by Time Inc. Newsagents, who rely on magazines for traffic and sales, need their own online strategy so that if/when Time and others achieve more traffic from online than retail they/we are less affected. Such strategies need to include an online presence, broadening of in store product / service offerings and better customer service to reinforce why the over the counter retailer experience is better than online.

The South Florida Business Journal has the story. The print edition remains but I wonder how long for. The adult sector is soft in Australia thanks to better quality images online plus excellent searching facilities. The Penthouse move is not unexpected and more evidence of online impacting magazines.

I am beginning to doubt the seriousness of the folks behind the recently launched Star magazine. It’s as if the title is marking time until they come up with a better concept. Newsagents receive little in the way of point of sale material, certainly nothing to enable the product to be merchandised beyond being put on the shelf.

Compared to other 2005 launches – Real Living, Notebook and Explode – to name three – Star is flying under the radar.

The holidays are over and magazines are back in business. This week’s New Idea and Woamn’s Day have Princess Mary covers again. There is no doubt she is the new Diana. My sense is that Mary on both covers will push sales of both products – more so than single copy sales. That is people who would usually buy one of the titles will buy the two. More Mary covers please!

The data is from a small sample (6 newsagencies) but from what I’m seeing the disruption in sales through the holiday period is least felt in specialist magazines (woodworking, model, warships etc) and in women’s magazines. That women’s magazines remain a powerhouse for newsagencies is no surprise yet our channel’s weak embrace of women’s magazines is. Newsagents could do more to embrace the category. At the moment they are part of the mosh pit of magazines whereas they could be treated as the jewel in the crow they are through special location; co-location; or other in store features. With new titles due this year newsagents run the risk of more women’s weeklies going moving outside the channel. In my own store any magazine promotion I run kick women’s weeklies magazines higher than all other categories.