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Media disruption

The ridiculous distribution of Stationery News continues

stationaryWe received another issue of Stationery News magazine today. This is a magazine for stationery retailers. We did not order it. It has not been supplied for sale in the newsagency. It has been sent as firm sale – this means we cannot return it unless we jump through time-consuming hoops.

I think the supply of Stationery News in this way to small business newsagents is unethical and socially irresponsible.

Yaffa is the publisher. This is after advising we have no interest in this magazine and the subscription that is being unethically forced on small business newsagents around the counter. In addition to getting a credit we ought to be paid for the time this unwarranted supply is causing not only us but other newsagents around Australia.

Shame on all involved.

Checking the Yaffa website tonight I found this:

Each title at Yaffa Media is led by a team of experts in their respective field that are dedicated to providing quality products designed to inform, entertain and inspire.

It also appears Yaffa Media has people who push a title onto retailers despite the retailers saying they do not want the title, causing those sent the title to have to spend time and money to geta credit for the magazine they did not ask for and do not want.

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magazines

News Corp. to close seven local papers in Victoria

News Corp. is closing the Melbourne Leader, the Berwick Leader, the Brimbank Leader, the Free Press Leader, the Hobsons Bay Leader, the Melton Leader and the Wyndham Leader from July 1 as reported by Mumbrella. While not a direct impact for most newsagents, the news is another example of the challenges for print newspapers and a reminder of the need for newsagency businesses to attract people with new products.

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Media disruption

Greenslade says newspapers are heading for the cliff

Respected media commentator Roy Greenslade has written a column – Suddenly, national newspapers are heading for that print cliff fall – for The Guardian that will challenge all who have print newspapers as part of their business model mix.

I am in Ireland to address the Irish Press Council’s annual general meeting in a lecture entitled “Have newspapers got a future?”

My theme is that they have no future. Declining circulation figures tell us that people are switching week by week from print to screen. It is simply a matter of time before it becomes unprofitable to continue publishing newsprint papers.

While we know that newspapers will stop publishing when the numbers no longer work, Greenslade makes an excellent point about the poorer quality of stories as newspapers cut costs in the end days.

Space in newsprint papers can be filled. The end result is something that looks like a paper, but the content lacks any real value. It is not journalism. It is pointless material without any public benefit.

While Grenslade is writing about UK newspapers, there are parallels here.

For our part, we newsagents should long ago have reset our businesses to not rely on newspaper traffic. Those who have not are facing trouble.

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Media disruption

UK start-up newspaper closes after two months

The New Daily, a national newspaper launched in the UK two months ago, is to close. Here is brutal commentary from Jeff Jarvis, respected American journalist and journalism professor:

It is most unfortunate that every time this happens, journalists suffer job losses or at least disruption. But enough with the Quixotic attempts to preserve a dying business model that we know is dying. First there was the News Corp. tablet app that was going to preserve our God-given right to package the news and get paid for it. Dead. Then came the Orange County Register’s doubling down on print. Bankruptcy. Now there’s Trinity Mirror’s new print newspaper New Day. Folded. 

Yes, I argue that we must innovate. But sorry, these are not innovations. these are exercises in nostalgia. Innovation would be using new tools in new ways to serve people as we could never serve them before.

So, yes, I’m sorry for the disruption to the journos in this latest case but I cannot help chortling at the comeuppance to this effort to restart the Brigadoon Daily, doomed from the start.

I like Jarvis’ directness. I also agree with him. The future of news is about news and not the medium. Too much time is spent by too many on the medium while the future slips away from them.

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Media disruption

No print newspapers in the hotel

IMG_8669More and more hotels I check into no longer offer print newspapers delivered to the room door in the morning. The card in the image is what I was handed when I checked in to a hotel last week. The instructions on the card provide free and easy access to newspapers on my phone, tablet and laptop. The service makes sense to me as a travelling consumer while I understand the challenge it presents for those in print distribution businesses.

I share the story here today to keep people informed about how this digital disruption to print is spreading.

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Media disruption

Fairfax announces regional newspaper closures

Fairfax today announced the closure of two regional newspapers and changes for others.

Under the plan, print editions and websites of the Cooma-Monaro Express and the Summit Sun at Jindabyne will be discontinued, The Queanbeyan Age will be relaunched as a free weekly newspaper and the content and distribution of the Braidwood Times will be extended to serve the growing community of Bungendore.

Fairfax also announced the Canberra Times is to be redesigned into a compact format.

None of these moves should surprise newsagents who have been focussed on the future. There is no upside for print newspapers if they remain focused on news as the news is well and truly old by the time the presses start to role the night before we get the products in-store.

While I understand publishers need to promote and in most Australian cities justify production, this is now a rapidly changing space. Whereas publishers were asleep for decades, two or three years ago they started to act and moved on cover price and cut operating costs. It is too little too late in my view. Now, they need to act ahead of the massive wave that is building out in the ocean, so they are not drowned.

Today, we have newspapers that are too thin to justify the higher charge. Ask any newsagent and they will have stories of customers complaining about poor value for money some days.

I think we are close to seeing one or more capital city dailies moving away from seven day production schedules. I don;t want that but paid circulation and falling ad revenue make it inevitable.

We have to run our businesses expecting falling newspaper traffic and revenue otherwise we will be in shock when it stops and wonder what to do, and by then it will be too late.

Today’s announcements by Fairfax are announcements the company needed to make. Our challenge is to respond thoughtfully and appropriately for our own respective futures. Hopefully, many newsagents reading this started acting long ago.

While newspapers remain important to many newsagencies today, business growth can be achieved without them. This is where our attention ought be.

Newsagents need to be chasing new traffic, shoppers who do not come to the business today. This is hard work. It involves you being a retailer and not an agent. This is a fundamental mindset change, but one many have made with terrific success.

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Media disruption

The New York Times seems desperate

Screen Shot 2016-03-27 at 11.53.31 pmI have received six to eight over the last ten days emails from The New York Times promoting digital subscriptions. One email is okay but I now have so many they appear desperate. The US$2 a week offer for digital access does not feel like good value in that I can access few news from plenty of sites. Paying US$2 a week for their opinions is not appealing. This is the same reason I don;t pay News Corp. a fee to be told by their opinion writers what to think.

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Media disruption

Fairfax cuts editorial jobs, Coles cuts print advertising, newsagents cut print media space

It is a tough day for print media with the news that Fairfax is cutting 120 editorial jobs. Related, Coles has dramatically cut newspaper and magazine advertising. The mUmBRELLA report includes this:

Year-on-year, Nielsen estimates Coles Supermarkets has gone from spending around $100,000-$200,000 per week in January and February of 2015 to below $50,000 every week this year, except in the week leading up to Australia Day.

Smart newsagents are reducing space for magazines and newspapers – sometimes cutting titles other times fitting the same titles into less space to reduce operational overheads.

Without a doubt these are challenging times. Focussing on the cost base is important for if you don’t and the decline continues, the cost as a percentage of revenue increases at an alarming rate.

From a newsagent perspective, the biggest cost base is usually real estate. This is why magazine departments are moving, shrinking and being used more efficiently in well run businesses.

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Media disruption

RETAIL NEWSAGENCY SALES BENCHMARK COTOBER – DECEMBER 2015 vs 2014

The December 2015 quarter was tough for many newsagencies, especially with print media products. Here are the year on year same store comparison numbers.

  • Customer traffic. 78% of newsagents report average decline of 1.2%.
  • Overall sales. 76% reported an average revenue decline of 1.6%.
  • Basket depth. 68% report a 1.5% decrease in basket size.
  • Basket dollar value. 63% report an decrease in basket value of 1.2%.
  • 37% of respondents using a structured loyalty offer.

Benchmark results by key departments:

  1. Magazines. 81% of newsagents report an average decline in unit sales of 9.5%. The average decline in weeklies was 10.5%.
  2. Newspapers. 82% report average decline in over the counter unit sales of 7.9% . Capital and regional city dailies lead the decline.
  3. Greeting cards. 51% of report average revenue decline of 2.1%.
  4. Lotteries. 51% of those with lotteries report an average decline of 2% in unit sales.
  5. Stationery. 67% of newsagents reported a decline, with an average of 5%.
  6. Ink. 25% of stores report ink separately. Of these, 52% reported decline of 2%.
  7. Gifts. Of the 68% in the offering gifts, 60% reported growth with an average of 7%.
  8. Tobacco. Of the 45% with tobacco, 70% reported an average decline of 16%.
  9. Confectionery. 50% of stores reported an average decline of 2%.
  10. Toys. Of the 25% with toys, 65% reported growth of 5%.

While these numbers do not reflect good news for the channel, the positive side of the numbers are good for the businesses reporting them. For example, close to half newsagencies reported a decline in greeting card sales while almost the same number report growth. The difference between the two, the gulf, is considerable. Allowing for local situations, there is a point difference of eight between the average decline and the average growth. This is considerable. The businesses achieving 6% year on year growth from high margin card sales are in a different situation than those experiencing 2% year on year decline.

Look at gifts, the story is similar but even more complex. While the gam between those reporting growth and those reporting decline is considerable, more than ten points, that 32% of newsagents do not have a gift department is alarming given their greeting card sales. Even more interesting is the difference in gifts sold. Whereas in an average newsagency, gift revenue is equal to around twenty percent of card revenue, there are newsagencies where gift revenue is more than double card revenue. These are businesses aggressively pursuing change.

I saw data for one store that is a stunning turnaround. Indeed, the result was so good I made a YouTube video about it and other stores in this benchmark group: https://youtu.be/f-YilFlFG68

In my own newsagency: My key category numbers off a good base, are: Books: up 500+% due to trend chasing. Diaries: up 219%. Cards up 19%. Gifts up 60% and account for 15% of sales; Magazines down 1% and weeklies down 3%; Stationery up 5%, Plush up 18% and accounting for 9.15% of sales. Traffic: down 2%; Average Sale Value: up 9%; Average Item Value: up 11%.

2016 OUR YEAR TO EMBRACE

Success is there for the taking in any newsagency situation. I firmly believe that. In cities and country towns. In shopping malls and on the high street. We, each of us, can make our own success by embracing change and being serious about how we run our businesses – through the deliberate choices we make.

We have more control over our businesses than ever before. What we do with this is up to us. The trends affecting us are obvious. Our future is ours to own.

Please take this benchmark report as a call to action. Make 2016 the year you want.

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Management tip

2016 is already a year of consolidation in and around our channel

Already this year we have the considerable news of the closure of Network Services, the closure of Cleo magazine and Dolly magazine cutting half its issues. Now there is speculation of the sale of the Sunday Times newspaper in Western Australia to Seven West Media.

I have been told many times over the years by News Corp. stalwarts that the Sunday Times held a special place in Rupert Murdoch’s heart. If it was sold there would be some Murdoch watchers who see the move as prescient.

Disruption and consolidation is to be expected in the continuing print media circulation declines. The last quarter of 2015 is among the worst I have seen for magazines – more on that in the next couple of days.

On newspapers, we must be very close to a decision by some publishers to cut the number of days they print or to cut the print product altogether. My understanding is falling ad revenue is the key factor in such consideration.

The consolidation we have seen already and that anticipated ought to drive newsagents to work harder and faster on their own future as too many still rely on print product for much of their traffic and relevance.

The changes we are seeing should not worry us or cause newsagents to question closing their businesses. Rather, they are opportunities to re-define our businesses for a brighter future around the points of difference we wish to drive. Indeed, the changes are not unexpected.

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Media disruption

What is the APN / News Corp. tie-up and why is this not news?

The APN owned Daily Mercury newspaper is promoting Daily Mercury Unlimited, a digital subscription package for the Daily Mercury stories that also provides access to the News Corp. owned Courier Mail as well as Fox Sports.

I wonder if this deal has been facilitated by Michael Miller, former CEO of APN, returning to News Corp. as Executive Chairman. The link itself feels like it ought to be big news as it appears to strengthen the concentration of influence of the News Corp. organisation.

Here is the announcement as it appeared in the Daily Mercury:

Screen Shot 2015-10-19 at 7.49.42 pm

How does the ACCC look at such a move? Is there a commercial relationship between APN and News Corp. that the ACCC ought to consider? I am surprised at the lack of coverage about this – or have I missed it?

Check out this follow up ‘story’ in the Daily Mercury making access to News Corp. content clear.

Screen Shot 2015-10-19 at 7.41.51 pm

Newsagents selling the Daily Mercury are left wondering about the move. Should they be concerned for the future of the masthead or is the Courier Mail tie-in icing on the cake with their local masthead the main focus? Regardless, it feels like there ought to be reporting on this move by media analysts and reporters so we can be fully informed. All we have to go off at the moment is the APN spin.

One newsagent drawing my attention to this issue commented: The demise of the local paper just accelerated.

What do others think? Am I wrong to be concerned or to question this?

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Media disruption

Tough time for Newcastle area newsagents

Media Watch on ABC TV last night detailed the considerable cuts to reporting and editorial services at the Newcastle Herald.

69 full time jobs across the Hunter will go at Fairfax mastheads, 46 of those will be straight from the newsroom. More than half of the cuts will come from the Newcastle Herald, which has already had jobs slashed in recent years.

This story is sure to result in a loss of sales of newspapers in newsagencies in the region. How could it not with fewer resources to produce content readers want to trust.

You can find the story here.

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Media disruption

Stuck on ad promoting Skim App

IMG_9375The from page of The Sunday Age has a post-it note type ad stuck over the main photo of the day, which is unfortunate for the photographers and journalists. That said, it is promoting a new Fairfax App, Skim, which I started using Saturday, an App I think is terrific – much better than using the mobile enabled website. I suspect this is a platform launched to drive revenue from digital. The Skim App is also available on the Apple Watch.

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Media disruption

The different approach of two publishers to newspapers and what it means for newsagents

This comment piece by Michael Woolf published by USA Today is fascinating reading. It explores the different strategies of The New York Times and News Corp. In some respects, it offers insights useful in comparing Fairfax and News Corp.

At the heart of the Woolf piece is consideration of disruption on the publisher model of technology driven change in consumer behavior.

Woolf compares the strategies of Mark Thompson, CEO of The New York Times Co., and Robert Thomson, CEO of News Corp.

Both CEOs are trying to thread the finest of needles: to find a way for print news organizations to profit in a world that has undermined the basic business models and relationships that newspapers have always counted on for success, reader loyalty and advertiser interest in those readers.

This is a fascinating piece that will interest newsagents given the declining but continuing importance of print to our businesses.

We need to watch publishers carefully and consider their moves in the context of moves we make in our businesses and with the knowledge of the margin we make from newspapers.

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Media disruption

New York Times promoting in Australia

Screen Shot 2015-08-16 at 8.50.04 amI am seeing this ad promoting subscription to the digital edition of The New York Times come up plenty of times on Facebook at the moment. I am surprised at the considerable marketing efforts in Australia from this US publisher. I think it speaks to the extent of disruption faced by newspaper publishers.

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Media disruption

Magazine publishers expand digital engagement

Pacific Magazines has finally hoisted the white flag on print with a massive digital transformation program that will radically shift its reliance away from advertising through a series of e-commerce ventures selling products and services in specific “industry verticals” where its mastheads operate.

This is the opening paragraph of a report from Paul McIntyre in today’s Australian Financial Review.

The Australian Women’s Weekly has increased its online traffic by 33 per cent since launching its new website and ending a longstanding tie-up with NineMSN.

Figures released to The Australian show the AWW online has increased its users from 846,644 in May last year to 1,133,820 in May this year, following its relaunch on April 1.

This is the opening paragraph of a report by Sharri Markson in The Australian today.

I urge newsagents to read both articles.

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Media disruption

75% off for The New York Times

Screen Shot 2015-06-26 at 10.07.44 pmI signed up for the free 12 week offer of digital access to The New York Times a few weeks ago. Last night, this offer arrived by email. 75% off home delivery for 12 weeks. They do not filter out people overseas – until you click on the link and it breaks.

The 75% off cover price is an amazing deal for the second step deal after 3 months free access as it includes home delivery. I can’t see how they make money from this with ad revenue down and distribution costs that cannot be cut further.

Pricing like this from any newspaper publisher, and there are plenty doing it, makes we think they are in a race to the bottom. Once they get there they will urgently need a completely different business model.

 

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Media disruption

Is the Adelaide Advertiser soon to cease printing some days of the week?

Newsagents and others involved in newspaper distribution in South Australia are hearing reports that the Adelaide Advertiser will cease its print edition on one or more days of the week in response the financial return on those days.

One source is reportedly a representative Advertiser Newspapers who has spoken with newsagents.

While I expect such a move to happen, not only in Adelaide but elsewhere in Australia where the economics demand, I note we have heard this report previously and News Corp. denied it previously. I mention it today as the report is fresh from this week and I thought people would like to know.

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Media disruption

Free offer from New York Times

digitalI am seeing more newspaper publishers offering more aggressive offers for digital access. The latest in this push from The New York Times being promoted through Twitter. I signed up and sure enough I have free digital access for eight weeks.

I declined the 99c offer to extend out to 12 weeks as I want to see what they do at the end of 8 weeks.

Publishers are on a race to the bottom with these offers. This is why discussions about other models to fund professional journalism are vital. A health democracy depends on strong independent journalism. The financial model at the core of this for more than 100 years has collapsed.

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Media disruption

News shuts mX free daily newspaper

News Corp. has announced it is shutting mX, its free daily newspaper in Melbourne, Sydney and Brisbane in two weeks. This move is a recognition by the company of evolving news and information consumption habits, particularly in the commuter space in which mX operated.

While newsagents are not directly affected, there could be an opportunity for those serving commuters for later afternoon newspaper sales.

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Media disruption

Qantas unlocks 4,000 newspapers and magazines for customers

Screen Shot 2015-05-27 at 3.54.40 pmQantas has announced the availability of easy access to 4,000 newspapers and magazines for up to 24 hours before a flight through a relationship with PressReader. Once you download a title you have access for 12 hours on your device.

This is a disruptive action by Qantas that could ultimate impact the number of free newspapers picked up by travellers at departure lounges. As a regular traveller, I welcome the move.

Personally, what I especially like is that I will be able to access titles such as the Wall Street Journal.

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Media disruption
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