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magazines

Magazine printer Ovato in Administration

Magazine Printer Ovato has been placed in administration. Wayne Robinson at Print21 has a comprehensive story:

OVATO IN ADMINISTRATION

By Wayne Robinson | 21 July 2022
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In a tough day for the print industry, heatset giant Ovato is in voluntary administration, with the directors asking FTI Consulting to take over the troubled business from today.

Difficult decision: Michael Hannan, Ovato chairman

The company says ongoing volatile market conditions, the increased cost of raw materials and legacy cost issues have continued to impact it, “leading to the difficult decision” to appoint administrators.

The administrators intend to run the company on a business-as-usual basis, as they seek the best outcome for creditors. The first creditors’ meeting will be in early August, following which the administrators will focus on efforts to recapitalise or sell off the business.

Ovato has been struggling for years; its share price has collapsed, its revenue has been rapidly diminishing, and for the past two years it has been selling off everything it can, including the former Gordon & Gotch distribution business, which went to Are Media, the Griffin Press book business which went to Opus, its Brisbane premises although that was owned by the Hannan family and not Ovato, and all its marketing businesses.

In addition, it closed its Clayton plant last year, and closed its entire New Zealand heatset operation earlier this year. Its new supersite in Warwick Farm with seven heatset webs opened three years ago.

It originally restructured the business 18 months ago, after asking suppliers to take a 50 per cent haircut and getting a $40m cash injection, underwritten by its major customer and shareholder Are Media (formerly Bauer, formerly ACP).

Ovato actually returned to profit in the first half of this year, on sales that were down to $161m, and a net profit after tax up by 282 per cent to $17.5m. Revenue fell by $75m or 32 per cent, but the majority of this was due to its sold off businesses, with sales revenue down by 11.6 per cent or $19.9m on the same period last year.

Ovato was a billion dollar printer when it was PMP, but since the merger with the Hannan family’s IPMG it has been hit with a series of body blows. Its share price has plummeted by 99 per cent from $3 five years ago to $0.089 today.

In the last three months, Hong Kong-based Left Field print group has pumped $20m into Ovato, in the form of a $5m loan, taking over a $4.8m mortgage, and buying Griffin for $8.5m. Left Field now owns 14.7 per cent of the company.

 

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magazines

Tower Systems promoting newsagents

My Tower Systems newsagency software company has produced another video promoting local newsagents and has been playing it via YouTube. So far, the sponsored video has more than 7,600 views – this is in 1 day.

The goal of the video is to remind people of value offered through local Aussie newsagents.

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magazines

A beautiful and rare set of magazine numbers

Okay, for context:

  • This compares 2022 with 2019. Jan-June.
  • We took over in December and did a part relay to refresh positioning.
  • We particularly focussed on special interest, craft & hobbies, crosswords, children’s and music.
  • We actively promote magazine range, especially fringe titles, on social media.
  • We pitch magazines we want to feature next to newspapers.
  • We have a loyalty offer, which is being appreciated.
  • We also do some other things, but I don’t want to give too much away.

Yes, I hate that the GP is only 25% and that too many magazine publishers are holding cover prices back and therefore holding our income back. I also don’t like the old school treatment of us. But, with a product category doing close to $500K on a full year, it’s important to us, and, we are successfully leveraging magazine shoppers into other purchases.

Oh, I say the numbers are rare in that for many newsagents comparing the same 6 months, the results are between down 15% and up 5%.

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magazines

The People’s Friend delayed

Thankfully, the UK publisher shared this on Twitter.

The People’s Friend
@TheFriendMag

If you’re in Australia, unfortunately there has been some shipment delays. We’ve been advised that #7916 will be on sale June 30 and it will resume weekly after that.

The People’s Friend often outsells several other weekly magazines in plenty of newsagencies. It’s readers are loyal, and valuable beyond d the purchase of the title. It’s an efficient item to stock.

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magazines

Promoting magazine range

It is disappointing that there is no marketing of magazine range in Australia. The only marketing is modest spends for some titles. The category itself is ignored. We make our own. Here’s one we launched for one of my shop in Malvern, VIC, yesterday.

I’m pretty happy with 1,800 views in 24 hours.

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magazines

Perfecting the digital newspaper and magazine experience for travellers

You’d struggle to find print newspapers and magazines in airport lounges in the US now.

At LaGuardia (New York) airport yesterday, in the American Airlines lounge, I spotted this sign.

Clicking on the QR code takes me to an awesome website offering current newspapers and magazines. The range is extensive.

Once you select the title you want, access is immediate – all without needing to register, login or pay anything.

The copy of the paper is complete with ads.

Checking countries for which they have newspapers, Australia is not listed.

I spent an hour looking through the site, including the magazines, and that’s where I found some Australian titles.

Again, the reader experience was easy. You can zoom in and out with ease – on any device you are using. I tries this on my phone, iPad and MacBook. Such a good experience.

And, yes, in The Australian Women’s Weekly, there are ads.

I was even able to download titles, like AWW, for reading later. It was so easy.

I am surprised at how good the experience is, that it is free and that they ask nothing of me.

There are a couple of aspects to this experience that interest me: more evidence of digital first for what was print media, and, the tech story. The first was a given. But, it has been slow, because of the second. Tech has been slow and while what I experienced in the American Airlines lounge was good, it was not perfect. It was, however, a leap forward from two years ago when I last tried this out.

This is not about the traveller experience though. Well, it is, but looking down the path, it’s about how tech companies and others are removing roadblocks, to make the digital reader experience easier, faster and more personal. It is also about relationships that could be leverages to reach more eyeballs for instant access.

In terms of the tech, navigation is where I’d like to see change.Access is currently linear, like the print products themselves. I’d like more diving by topic, breaking stories free from mastheads. But, of course, that dilutes the value of the mastheads in the eyes of the publishers.

If you think about it, the print media distribution model was always destination shopper driven and distribution was always focussed on. this: newsagencies, home delivery etc … driven by the person who wants access to those products. The person has to know about the product and either want it or be curious about it.

The airline lounge experience is for the passer-by with some time available to read, it’s for the impulse shopper, the passer-by. That’s a different ‘shopper, and, potentially, a more valuable shopper for publishers into the future.

As publishers, and tech platforms, finesse their offerings, they will be more easily able to reach more of these people. I think partnerships will help drive this, using the masthead content as a value-add. This is where we will see more disruption.

That model, that future model, could / should be about stories reaching out to people, reaching more people, and not being accessed in a linear way.

I’m not doom and gloom for the newsagency channel based on what I have seen. This innovation, and what will come, are inevitable. Publishers are evolving, just as we must.

While I am sitting here in the lounge writing this, I am sat next to a large digital screen promoting an American Airlines / Oprah Book Club, Apple TV+ partnership through which I can watch Oprah interview authors and access those books to read while flying.

It’s the era of partnerships baby, and tech for what was print media!

So, where do we fit into all this? Today, if we offer print products in our shops, and not all of us do, we need to offer the best experience. And, while we do this, we need to evolve new traffic attractors, to bring more people. The best thing we can see in our newsagencies is new faces and the best experience is when they come back, again and again. Achieving that is 100% up to us as retailers. It’s not something agents would do.

The biggest risk to our newsagency channel is the newsagents who are not evolving, the newsagents who prefer to remain agents and the suppliers who encourage and enable them.

Postscript. It’s now 8 hours later and I’m in Wisconsin. I thought I’d try and access another title. Sure enough, access is locked to the WiFi at the American Lounge I was in.

It makes sense that access to locked to the location. It also underscores the opportunity of this tech to help publishers engage with new audiences.

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magazines

Motor magazine to close

Wheels Media recently announced that after 68 years, Motor magazine is to be closed. The July issue will be the last.

Someone needs to update the website.

MOTOR is now in a stronger position than at any point in its recent history. We continue with the printed page not because we have to, but because we want to. It’s an integral part of who we are and it reaches a different customer with different motivations than online journalism. What’s more, the magazine is growing in size, with better quality paper and a bigger editorial budget to bring both retail and subscription buyers alike a truly premium experience.

Fun fact: old issues of Motor magazine sell well, and for a good price, online.

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magazines

Are magazines less of a focus for WH Smith in Australia

I have been in several WH Smith transit locations recently and found magazines in a slow traffic location in -store, and poorly stocked.

This photo is from one of the Melbourne stores just over a week ago.

In one store, okay, it could be one-off. But more? I mentioned this to someone in the magazine publisher space and they had noticed it too and felt it was a deliberate decision.

Time will tell.

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magazines

Special interest magazines the growth opportunity for newsagents

Special interest magazine sales are strong in newsagency businesses for which I have seen sales data. And, by special interest magazines I mean fringe magazines, the titles we’d sell less than 10 copies each issue of. Magazines like Cigar Aficionado:

I mention Cigar Aficionado because this issue is easy for us to promote. Brian Cox features in Succession, a hit TV show that has connections to the media and Australia through cast and the broader subject matter.

In my shops we take care to notice covers, so we can leverage them if they present an opportunity. Sometimes, a full cover needs to be seen to gain traction. I think that;s the case with this issue of Cigar Aficionado.

And, yes, I hear some in the gallery complaining about magazine margin. I agree, it is appalling. but, these special interest customers are our most valuable magazine shoppers. They will buy more magazines and are more likely to add other items to their basket than the more regular shopper buying weekly magazines. We can make money by be8ing the specialist magazine retailer in the right retail setting with the right complimentary product from which to derive the value.

No, I am not all in on magazines, all gung-ho. Rather, I note that in some situations the category performs well, making a net positive contribution. Unfortunately, though, shifting the cream from weeklies and high volume monthlies to other retailers means there are now fewer magazine specialists. The ‘experts’ behind this shift, this deregulation, have gone on to other endeavours, leaving us to make what we can of their mess, which, in terms of special interest titles is plenty if done right and in a good situation.

Attitude is another special interest title that benefits from promotion., This latest issue with Josh Cavallo in the cover is timely.

It’s a magazine issue that could be bought for plenty of reasons and not by those who would usually buy this title. By shining a light on this Josh Cavallo issue of Attitude we can attract more shoppers to the shop, for the destination purchase. Social media posts about this could do more for us than pitching New Idea or Woman’s Day. Promoting Attitude would be a blue ocean activity while promoting those other titles is red ocean.

Again, the 25% is meagre, but when you’re doping close to $400K annual in magazine sales you want to take care of it. And, that’s what we are doing.

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magazines

Are Media to compete directly with gift and homewares retailers through Hard To Find acquisition

Are Media has announced its acquisition of the Hard To Find business. Hard to Find currently attracts 148,000 visitors (shoppers) a month. They dominate online for gifts:

The acquisition places Are media as a direct competitor of any retailer in the gift space, including newsagents.

While I get that Are Media needs to do what is best for its shareholders, they need to understand that this decision does make them our direct competitor. Anyone who says otherwise is ignorant. While the company has other e-commerce platforms, Hard To Find is on the mainstream online, it comes up in top search results.

Yes, I understand that it is a marketplace, driving traffic for other businesses that actually do the fulfilment. But, that is not how an online shopper sees they business. When they click add to basket, they are buying from Hard To Find.

Click here for the story from Mediaweek about the acquisition:

Are Media has announced the acquisition of Hard to Find.

The acquisition of the Australian e-commerce business significantly expands the media company’s existing content commerce capabilities, strengthens its revenue diversification strategy, and leverages Hard to Find’s market-leading technology to engage audiences even further with Are Media brands and content.

Hard to Find is an award-winning premium product marketplace, celebrating fun and innovative designs from the best small creative Australian businesses.

Founded in 2008 by former media executive Erica Stewart, the site brings an expertly-curated community of product designers and artisans together with discerning consumers looking for something different, creating a more personal maker-to-customer shopping experience.

Are Media CEO Jane Huxley said: “This acquisition adds new e-commerce capabilities to our broader business and allows us to amplify the success of Hard to Find, introducing audiences who are already inspired by our content and enticing them to take the relationship with trusted, authentic brands that one step further.

“I’m excited to welcome Hard to Find into the Are Media stable and particularly pleased that Eri will be joining our business to continue to lead the evolution of Hard to Find. She brings a wealth of experience and proven success in e-commerce that will help drive our future ambitions in content commerce.”

Hard to Find joins Are Media’s established and category-leading digital brand communities, including beautyheaven, trusted by 96% of its audience, and Bounty Parents, supporting parents and parents-to-be for more than 35 years.

What frustrates me about this is that Are Media splashes cash on this acquisition while refusing to make meaningful progress on poor commercial arrangements with newsagents for its magazines:

  • The paltry 25% commission paid for the sale of their titles.
  • That newsagents have to fund theft of magazines in-store while supermarkets do not.
  • That newsagents have to pay to receive electronic invoices for products while in almost all other retail sectors electronic invoices are free.
  • That labour management processes for magazines are rooted in the 1980s, and cost newsagents hours, disadvantaging them.
  • That newsagents lose hours chasing delivery shortages through a system that presumes guilt until call or email 3 or 4.

And, now, we can add that Are Media owns a business that directly competes with us for gift related sales.

Final word: if you think I’m saying they should not have acquired the business … I am not saying that. rather, I want Are Media management to be more respectful of newsagents and this acquisition story is an opportunity to make this point.

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magazines

Some photos from the newsagency from 12+ years ago

Unfortunately, newsagents are still encouraged to create magazine displays to chase a cash prize, and supermarkets are still paid for premium shop floor placement.

It’s tactical placement that drives impulse purchases of a magazine. Af for traffic generation, displays pitching special interest or niche titles provide more value than displays for mass weeklies or monthlies.

–

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magazines

Pitching magazine range on social media

It took me 5 or so minutes to make this social media post. It has worked a treat not only attracting social media engagement, but, in-store too.

There is no doubt we get more traction from promoting special interest titles than high volume weeklies and monthlies.

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magazines

Remembering the comic magazine segment

Conics were an awesome magazine segment back in the day, a perfect habit based product that brought shoppers back and back. While we still have some comics today, sadly, not enough for what remains a passion for plenty. Check out this as from years ago:

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magazines
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