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Media disruption

New Yorker promoting subscriptions in Australia

The New Yorker is running a sizeable campaign on Facebook inn Australia pitching twelve weeks of the weekly magazine for $6.00.

This is a stunning offer not only because of the price but because of the direct to consumer offer from a US publishing company.

While the title has narrow appeal, at that price the appeal would be broader than usual for it.

If you click sign up you see the offers available. The headline offer is for digital only. However, twelve weeks home delivered for $8.00 is still a sweet offer.

There is no countering this. I anticipate we will see more publishers of overseas niche titles making similar pitches, especially for digital editions.

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Magazine subscriptions

I was wrong about Gotch, they don’t care about newsagents

In my post last week about the missteps by XchangeIT and Gotch on the data handling for the new Gotch gift offer, The Market Hub, I said that I thought the issues wold be resolved at the Gotch end, negating the need for newsagency software change and therefore costs falling to software3 company owners and newsagents.

Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.

Turns out I was wrong. Gotch does not plan to operate within the IT standards they helped to establish. They have advised they will use the magazine file structure to send gift produce delated data, breaking the standards. They will do this with XchangeIT watching them, yes, the same XchangeIT that fines newsagents for poor data management.

I think this disregard by Gotch of the IT standards they imposed on n newsagents speaks to their views on the future of the channel and, in particular, the distribution of print product.

If they believed in the channel they would invest in the right tech approach to their data challenge.

If they respected newsagents they would follow the IT standards they themselves helped to bring into place.

If they believed in their own future they would invest in that. Instead, they have invested in product and marketing but not in ensuring data flow within the standards they established.

I think this looks bad for Gotch. However, I suspect most newsagents will not fully grasp why this is an issue. This will make it easy for Gotch to say I am wrong and that my software company is the problem.

Here are questions and answers that define what is happening and why I have written here and previously as I have:

  1. Does the gift product data from Gotch and sent through XchangeIT meet the data standards they participated in developing? No.
  2. Can Gotch fix the problem at their end? Yes.
  3. Will Gotch fix the problem at their end? They have said no.
  4. What does Gotch want done? They want the software companies to change how the magazine data file is used, to enable the misuse of the file structure by Gotch to work with established newsagency software.
  5. Who does Gotch propose pays for the software changes? So far, me and the other software company owners.
  6. How could this problem have been avoided? Through discussion with the tech stakeholders long before launch as that would have taken away the time challenges given that the Gotch gift product range has now been launched.

Gotch may defend their position by saying my concerns are driven by my work with newsXpress. Such a statement would be untrue. My concerns here, as explained, are purely tech standards related.

If Gotch cared about newsagents they would respect the IT standards as much as they expect (and demand) newsagents respect them.

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Ethics

Fairfax advertising with the New York Times

This is something you would never have seen in print: a Fairfax masthead, The Age, being advertised on a New York Times platform.

That this is being done speaks to the extent of change we are amidst – not only in print media but in all areas of business. What was usual previously can be rare today just as what was taboo previously can be usual today.

Indeed, the Fairfax ad on a NYT site is a reminder that we cannot apply to today’s business world some expectations and rules from years ago.

In our channel for decades we lived with the understanding of territories. In the newspaper and magazine distribution space territories still exist. However, in retail, there is no such thing as a territory, certainly not when you can easily win a customer online. These are the days of retail without borders.

Related: B&T had an interesting report about cross-border sales.

It is in parts of our businesses where we practices of yesteryear continue that hold us back. While the world has moved on, in some parts of newsagency businesses the old way is the expensive and slow way. I am thinking here in particular of the old-school regulation around lottery products, magazine distribution and newspaper distribution. In each of these areas our ability to compete and be relevant is being held back by old practices and out of date compensation.

Some newsagents are breaking free and expanding their product portfolio way beyond what has been traditional for a newsagency and through this facilitating relevance in this new world. Hey if a couple of old-school newspaper publishers can do this so can we.

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Media disruption

Coles promoting discount News Corp. newspapers

Check out how Coles is promoting discount newspapers from News Corp. at the moment. I hope News Corp. does not do for newspapers what Bauer did for magazines by making discount bundles the new normal and educating customers to expect them.

Either a title is worth the cover price or not.

Content sells print media products more so than price.

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Media disruption

Reports Facebook will launch a subscription news service

The Street is reporting that Facebook plans to launch a news service, in apparent partnership with news publishers:

“One of the things we heard in our initial meetings from many newspapers and digital publishers is that ‘we want a subscription product — we want to be able to see a paywall in Facebook,'” Brown said at the Digital Publishing Innovation Summit, an industry conference, in New York City on July 18. “And that is something we’re doing now. We are launching a subscription product.”

The paywall idea is based on premium and metered plans and has been in the works for a while, Brown said. It’s aimed at appeasing news organizations which had complained that they had little control over how their stories were being exhibited on Facebook. The News Media Alliance, which petitioned Congress, charges that Facebook and Google benefit from the work of hundreds of newspapers without fairly compensating publishers.

Print media disruption continues.

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Media disruption

Sunday the focus of News Corp?

News Corp. has a TV commercial in high-rotation in Melbourne pitching home delivery of the Sunday Herald Sun. I am not a big television watcher yet has seen the ad plenty of times. It makes me wonder if Sunday is the focus of the company for this masthead.

It is frustrating seeing such a large price difference between what we sell the newspaper for and the $1 they are charging for home delivery.

In fact, the price feels desperate.

The circulation and marketing folks at News Corp. would say this is a taster offer, to get new subscribers they can convert to a more commercial price once the $10 for 10 weeks offer expires. maybe so but it is still a desperation offer.

The Sunday paper is their hero paper of the week. It is worth much more than $1. Yet here it is for $1.

While I don’t have the data News Corp. has, I wonder about the health of the newspaper for each of the current event days it is published. I’d like to know this to have e context for the $1 a day home delivered offer. I want to understand as it matters in terms of longer term business planning on newspapers.

Engaged newsagents are constantly adjusting their businesses, space allocated, location and other points relating to newspapers.  It is appropriate we are informed in our decision making. As things stand today, I know of some newsagents assuming things from this latest News Corp. TVC. More information from News could help those making decisions to act more on facts than assumptions flowing from this very cheap subscription offer.

There is no upside for print newspapers. We are in a period of managing the transition to digital. That’s what I believe. Layer on that this latest TVC and you can see why I have questions.

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Media disruption

Independent commentary on News Corp results

In his post Rupert’s results: no end in sight to the destruction of mainstream press, Michael West dispassionately looks at the latest News Corp results.

The latest profit results from Rupert Murdoch’s News Corporation are not a pretty sight. In fact there seems no end in sight to the destruction of the mainstream press.

Plunging ad revenues in the second quarter, falling newspaper circulations and a still feeble contribution from digital advertising mirrors the performance of News Corp’s arch-enemy Fairfax Media. The inexorable incursion of the internet continues to wreck the mainstream media; more journalists will go, newspapers will close, and coverage of important issues will be even further compromised.

Anyone interested in the state of journalism and newspapers should read this piece by West. I found it fascinating.

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Media disruption

News Corp. second quarter loss

The Australian today had reported on a second quarter loss by News Corp.

News Corp posted a loss in the second quarter amid a challenging print advertising environment for its newspaper and information-services unit and foreign currency headwinds.

The company — which publishes The Australian as well as other newspapers in Australia, the US and UK — reported a loss from continuing operations of $US219 million, compared with a profit of $US106 million a year earlier.

The report reveals News Corp. wrote down down the value of Australian fixed assets  by $US310 million. The digital focus is ramping up:

To make up for lost print advertising revenue amid rapidly changing market conditions and to position the company for long-term growth, News Corp is boosting digital revenue streams even faster.

Digital revenues now account for 27 per cent of revenues at the news and information services segment, compared to 22 per cent in the prior year.

Newsagents should read the whole article.

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Media disruption

Newspaper ad revenue down 11.3%

Newsagents should read the Mediaweek report about newspaper ade revenue. Print ad revenue declines 11.3% in 2016.

Australia’s news media sector has reported $2.28 billion in advertising revenue for calendar year 2016, according to the latest News Media Index with data collated by SMI. It remains the third largest media sector based on advertising revenue.

Digital revenue grew by 9.9%, print declined by 11.3% and newspaper-inserted magazines (NIMs) declined by 9.2%.

Print revenue continues to account for around 80% of total sector ad revenue.

Add this to the unit sales decline we are seeing in newsagencies and you can understand the challenge ahead for any business relying on the sale of print newspapers in their business model.

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Media disruption

Bauer to close print edition of Dolly magazine

The December 5 issue of Dolly magazine will be the last. The masthead will continue online but for print, this is the end.

This move was only a matter of time. In 2012, Dolly was selling 90,000+ copies an issue. This year, it has been selling 30,000.

The announcement by Bauer Media to close the print edition of Dolly comes just after Pacific Magazines announced the closure of the print edition of Girlfriend.

It is a tough time to be a magazine publisher. 2016 has been a difficult year. The sales and closures have been necessary as publishers tune their businesses for changed circumstances.

The demographic served by Dolly and Girlfriend consumes information differently today than in 2012 when Dolly’s circulation was three times what it is today. In addition to this, the product brands that supported the print product back then now have their own direct to consumer channels that mean they are less reliant on the magazine brands that ‘owned’ the channel to the consumer back then.

This is digital disruption in several levels – the delivery of access to news and curated content and the disruption from brands owning and running their own direct to consumer channels.

The question for newsagents is what have you done to ensure your business attracts the Dolly / Girlfriend shopper?

The closure of the titles will not cause a significant drop-off as that has happened since 2012. What have you been doing to appear to these shoppers as you need them given the ageing population – you need new people in your pipeline?

While the closures are confronting, there are launches of more long-tail titles that present us with opportunities in specialisation. I have received three submissions this week from Australian publishers launching new niche titles into the marketplace, publishers only relying on the newsagency channel to reach their prospective readers, publishers with little or no focus on subscriptions.

While the low margin on magazines is a major challenge for gaining newsagent interest, the opportunity to be a specialist, and through that to attract new traffic, is appealing. Magazines are important to our businesses. We should welcome launches and help those titles find readers, especially the titles that sell exclusively in the newsagency channel.

Footnote: For an excellent article on the Dolly move, read Miranda Ward’s article at Mumbrella.

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magazines

Are newsagents as obsessed with possible Fairfax newspaper closures as News Corp?

IMG_1493I have no doubt we will soon hear from Fairfax that they plan to cease daily publication of some or all of their capital city daily newspapers. The circulation numbers are such that several days a week the production and distribution costs are not covered by sales and ad revenue.

I suspect the future structure of the total Fairfax business will play a role  in the timing of any announcement. There are reports of discussions with Nine Entertainment.

Fairfax is not the only newspaper publisher in Australia or the world facing the challenge of the future of its print product.

Every newspaper is in the same boat thanks to the disruption driven by mobile technology and social media that has fundamentally altered how, when and where we consume news.

There is a new challenge to what constitutes news. Thanks to better data on what people read, news outlets are more prone today to publish fake news, junk content and puffery than they would have back when they only had the print product. Publishers are pandering to what people like rather than publishing news.

You only have to look at the US election to realise the crisis confronting news outlets. News is not valued as it once was. We are in an era of celebrity where the opinions of a few matter more than irrefutable facts. The opinions of these few are soon spread as news thanks to the megaphone of social media.

This shift has been driven by social media platforms such as Facebook, Twitter and Instagram and the opportunity for everyone to be a publisher, an immediate, unedited, unmoderated publisher.

Ad revenue is a problem for print newspapers. It has all but collapsed for print newspapers. Okay, maybe collapsed is too dramatic a term. But it has declined considerably year on year for several years. This challenges the model of the physical product.

Also, Today there is a proliferation of news outlets we did not have in Australia just a few years ago.

If the numbers don’t work, the publisher has to make the tough call. It is all about the numbers.

As is their want, News Corp. is obsessed with when Fairfax will transition from daily publishing of the print product to another model. Their latest report, in The Australian, claims a cost of $330M projected by Citi, to be faced by Fairfax of they make such a move.

The obsession by News is not unusual given the rivalry between the two publishers and that Fairfax has more respect as a trusted news publisher than News. If News was committed to news, The Australian would report on the company’s own considerations and plans. I expect there are daily newspapers in its stable that do not pay their own way today, newspapers delivering mounting financial losses to the company’s balance sheet – if only the results were reported so this could be seen.

While this is interesting to watch, newsagents need to act. These changes are coming. Soon, daily newspapers will disappear, not all, but certainly some. When that first one goes, it will be a shock to many newsagents. It should not be a shock though. Smart newsagents have new traffic strategies in place that are bringing in new customers to purchase non circulation items.

What does your business look like without newspapers?

How do you consider yourself running a business without newspapers?

Are you ready in terms of your business plan?

Are you ready for how your bank will react?

Are you ready for how your landlord will react?

Are you ready for the doom and gloom reports that will defend upon the channel when the first paper closes? Can you weather it because it will be tough with our channel more tightly aligned with newspapers than any other single retail channel in Australia.

Are you working on your business now so it is ahead of the wave of change that will follow any closure of a major daily newspaper?

Or are you waiting for it to happen before you make any moves? If this is you, that approach will be too late.

Acting today involves placing newspapers in the most cost effective location in-store and reducing the visual impact of papers to messaging for your business. It requires you to engage with multiple strategies for attracting new shoppers into the business. And it involves you re-casting the image of your business in your external marketing. These points are just the start.

Look at your business data. Understand the role newspapers play: How often are newspapers purchased alone versus with other items? This and related analysis can help you understand the impact should daily newspapers cease in your area.

The report in The Australian is not relevant to the timing as Fairfax will make the decision based on the economics of the print operation – just as they have made decisions to cut their workforce several times in recent years based on operating costs. The cost of the decision is a cost of business, to be borne over time.

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Media disruption

News Corp. pushing it’s digital channel hard

IMG_0822News Corp. newspapers are pushing its digital platform with ads in its newspapers promoting the free Samsung tablet with a twelve-month subscription. This is a compelling offer as the subscription cost is not far off the cost of the Samsung tablet they are giving away.

The offer values the news at 45.7 cents a day.

If I was News I’d be doing the same thing, maybe even more aggressively priced.

As a newsagent this offer reminds us there is no upside in print newspapers. While in some locations print is strong – such as tourist locations – the everyday regular customer will migrate as there is no point waiting to read a story you can have accessed close to the time the story was current.

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Media disruption

The importance of being mobile engaged

Mediaweek yesterday carried a link to a terrific report from Zenith forecasting that 75% of internet use in 2017 will be via mobile devices.

Mobile devices will account for 75% of global internet use next year, according to Zenith’s new Mobile Advertising Forecasts, published today. The mobile proportion of internet use has increased rapidly, from 40% in 2012 to 68% in 2016, and we forecast it to reach 79% by 2018.

If you have a website, it must be mobile friendly.

Your Facebook business page posts need to reflect that they will more likely be seen on mobile devices.

The growing level of internet access on mobile devices means we have to change how we communicate through our various online platforms.

I look at website platform access data for a range of websites and there is no doubt about the growth of mobile and the importance of being mobile friendly.

Being mobile friendly with newsagents starts with being able to be found by people using their mobile phones. Do a search for you business. If you cannot be found, fix that. How do you fix that? Talk to your =marketing group, ask them for their mobile marketing training.

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Management tip

The Examiner is better value that The Age on weekdays

IMG_2161In a comparison of news content and pages, the $1.60 I spent on The Examiner in Launceston yesterday is better value than the 60% more for The Age.

Comparing the two newspapers yesterday, page by page, from a local consumer perspective The Examiner is the better newspaper in my opinion – but the value at $1.60 is questionable … I don’t spend the money and we can see from circulation data fewer people do.

The challenge is falling ad revenue for papers is causing cost cutting and this is resulting in thinner papers, fluff filled papers. Ad revenue is falling because news is old by the time it is printed. For a print product to be purchased it has to have value.

Based on news and analysis consumption trends today, sufficient value is not there a print delivery seven, six or even fixe days a week. Except for a locally focussed product. I suspect newspapers like The Examiner have a better chance at a longer print life because of their local focus. The key is to find more ways to fund expensive local journalism.

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Media disruption

John Oliver on the importance of professional journalism

John Oliver passionately explains the importance of journalism in a democracy and explains the risks for democracy as print newspapers close for digital editions. You’ll need to use a VPN to place yourself in the US to get access to this as access to geo-blocked: https://www.youtube.com/watch?v=bq2_wSsDwkQ I have watched the whole thing and found it most compelling.

The video includes excellent fact-based graphics to explain the situation.

Screen Shot 2016-08-24 at 8.24.22 AM

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Media disruption

A tough day at the office for Pacific Magazines as some magazines cease print editions

Pacific Magazines has today announced the closure of Your Garden magazine, the move to digital only for Bride to Be and Practical Parenting and the end of the licence for Prevention, which will see Pacific bring to an end its publishing of the title.

These are tough decisions, affecting the lives of many. Pacific is not alone in adjusting its magazine publishing business in response to market conditions.

Here is the announcement from the company.

Screen Shot 2016-08-22 at 1.42.11 PM

This announcement is a reminder to newsagents to ensure they are developing sustainable traffic drivers for their businesses as the disruption to print is not only affecting publishers.

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magazines

What is wrong with the News Corp. Rewardle loyalty offer for newsagents?

News Corp. is asking newsagents to install an iPad on the counter as part of a newspaper loyalty offer connected with the Rewardle loyalty program. Rewardle has also been pitched to newsagents by the ANF (no ALNA).

I have seen the Rewardle terminal in several newsagencies. In each case, the newsagent said yes to the terminal to be installed because it is free.

Here is what I think is wrong with this News Corp. promotion and why it is not good for a newsagency business.

  1. It is not free. This Rewardle loyalty program requires prime space on your counter and your time for engagement.
  2. It is visually noisy. The Rewardle terminal on your counter promoted News Corp. offers, drawing attention from other products at the counter.
  3. It is selfish. The News Corp. Rewardle program is focussed on newspapers. Newspapers are not your business. The best approach to loyalty is a whole of business approach where customers have rewards they can spend elsewhere in your business, hopefully discovering product opportunities they had not considered before.
  4. It is not your future. There is no upside in print newspapers. Right now we are in the end-times for print as a delivery platform for news, news analysis and comment. There is no upside from here. Everything News Corp. is doing is about connecting with and leveraging customers to their digital platforms. Engaging with this Rewardle loyalty offer facilitates this goal of News, it is about their business needs far more than it is about your business needs.
  5. It is not smart. The limited data available to newsagents does not facilitate whole of business decision making.

Regardless of the newsagency software you use, my advice for newsagents is to leverage that for a whole of business loyalty offer. You need to be in control. You need a loyalty offer that serves your needs for your complete business. You need a loyalty offer that nurtures customer engagement for your future beyond a print news product.

The key focus of newsagents right now has to be on business transformation. By transformation I mean attracting new traffic by resetting the business from the shop floor out, pitching new products with a fresh approach to merchandising backed by a customer service experience that is unlike you would have experienced in a newsagency of the past. I don;t see the News Corp. Rewards loyalty program as serving this need.

The News Corp. Rewardle offer is not about transformation. Indeed, I see it as distracting from business transformation.

What I have written here can also apply to other brand or supplier specific loyalty offers as they focus on the brand or supplier ahead of the newsagency business.

Any loyalty pitch in your newsagency needs to be focused on your business, the whole of our business. You need to own the loyalty program so you are able to drive its focus, track the rules and ensure the reward for your customers is exactly what is right for your business.

Just because something looks bright and shiny and is free does not make it good. That may have been the case in a newsagency of the past. It is certainly not true for a newsagency of the future.

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marketing

Newsagents can learn from publisher actions

Fairfax has cleaned up its balance sheet with a billion-dollar write-down announced today. This financial clean-up is something newsagents could take as a guide to cleaning up the newsagency in terms of space allocation to print, space allocation to dead stock generally and the management time commitment to slowing and dying product categories.

To me, that is the focus of today’s Fairfax story – what we should be doing in our businesses in a similarly future-focused mission.

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Media disruption
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