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Newsagency opportunities

iPhone continues to disrupt print

The new Apple iPhone which was launched in San Francisco yesterday extends the disruption of print media with a host of new features.  For a good summary in the context of print media and our newsagency businesses, check out these links: Editorsweblog,  The Atlantic (asking if the new iPhone can save journalism), Editor and Publisher and ValleyWag.  There are thousands of stories and blog posts on this already.

Disruption to the print model is the story of the year (and decade) for newsagents.   It is the greatest opportunity we have had since we were created in the 1800s by a publisher to distribute their product.

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magazines

Respecting the challenge of the magazine marketplace

The announcement last week of departures from ACP is part of a broader restructure occurring in magazine and newspaper publishing businesses. Just read about changes at Hearst Corp. and Hachette Filipacchi and News Magazines in the UK.  The restructure here in Australia reaches beyond ACP to other publishers and deep into distribution and retail as we all deal with the current economic circumstances and the continued impact of the Internet and disruptive devices like the iPhone and Amazon Kindle on magazines and, to a lesser extent currently, newspapers.While it would be easy for newsagents to take some pleasure from the public pain being experienced by ACP, the reality is that we are all affected. It serves no purpose to take any joy from retrenchments.

Newsagents have an opportunity in this marketplace to strengthen our value to magazine and newspaper publishers. Smart publishers will work more closely with smart newsagents to grow sales. Today’s challenges mean they should be doing this with more care than in the past.

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magazines

Rupert Murdoch on the digital future

Fox Business has published another video interview with Rupert Murdoch in which he talks about, among other things, newspapers.  He makes interesting comments about migration online.  Check it out:

Reuters has several quotes from Rupert Murdoch including this about newspapers:

“Communications are changing totally and we’re moving into the digital age and it’s going to change newspapers. But if you’ve got a newspaper with a great name and a great reputation and you trust it, the people in that community are going to need access to your source of news. What we call newspapers today, I call ‘news organizations,’ journalistic enterprises, if you will. They’re the source of news. And people will reach it if it’s done well, whether they do it on a Blackberry or Kindle or a PC.”

“I can see the day maybe 20 years away where you don’t actually have paper and ink and printing presses. I think it will take a long time and I think it’s a generational thing that is happening. But there’s no doubt that younger people are not picking up the traditional newspapers.”

Some in News Limited here in Australia could learn from Murdoch’s direct answers on newspapers.

Newsagents need to watch this interview, and the previous one, and take on board the comments in the context of shopfits and newsagency business planning.  The fundamentals of our businesses are changing.  We need to embrace this change as the opportunity it is.

This means flexible shop fits, new traffic-generating product categories and embracing entrepreneurial spirit.

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Media disruption

Looking for magazine poster suggestions

chistmasposter.jpgI am planning on creating a new poster (not me but the marketing and design team in my business) promoting a category of magazines and to make it available free for download here in A4 and A3 sizes.  I have done this a couple of times already – most recently last Christmas.  The idea is to create a poster which features several titles from a magazine catgeory – a poster which any newsagency could display regardless of the banner under which they trade.

I am thinking of selecting one from the following magazine categories: children’s, food, men’s lifestyle or special interest.  I’d be interested suggestions.

The artwork will feature a range of titles and prmote the newsagency as having an excellent range of magazines.

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magazines

EDI standards unify newsagents

Unity is an overused word in the newsagency channel.  Right now, however, unity is on show for newsagents in a practical and commercial way.

For the first time in years, all magazine distributors, key publishers, software companies and newsagents are all working to a common goal around new XchangeIT EDI standards.  This unity of purpose has been driven by the distributor’s desire to cut costs out of their back end.

The new technology and processes software companies and magazine distributors will implement will cut costs for newsagents.  This is why many newsagents are getting behind the project.

Down the track, once the new XchangeIT EDI platform is fully rolled out, I will see significant innovation.  Software companies and magazine distributors will have the ability to better demonstrate valuable points of difference.  Newsagents will benefit from the renewed competition which will flow from this.  Core standards will drive unity but also intensify competition.

As the new XchangeIT standards further evolve, I am certain that we will see more opportunities for a common approach by newsagents and stakeholders – more unity of purpose. Thinking about this today made me reflect on the importance of commercial unity compared to the political unity which continues to elude the channel.

While some will say that newsagents should have owned the EDI standards and platform, it is too late for that.  The opportunity of newsagent ownership of the data channel into the newsagent network was botched by newsagent leaders earlier this decade.  What we have today is better than what was planned back then.

As more newsagents embrace XchangeIT and the new disciplines I am excited by the opportunities ahead.  This is a platform which we can leverage for the benefit of newsagents.  It is also a platform through which leadership can shine.  My only frustration is that it has taken so long to come to fruition.

I have a vested interest because I own Tower Systems.  I have respected that by reducing margin – because of easier sales to newsagents who want the benefits of compliant software – as reflected in our Connections with ACP joint promotion.

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Newsagency opportunities

National Independents’ Week a great initiative

niw.jpgIt is National Independents’ Week this past week in the UK, a week when publishers, suppliers and independent retailers including newsagents jointly promote independent retailers.  The Sun newspaper is promoting offers through coupons in the newspaper.  This is an excellent promotion, one I have blogged about before.

I’d love to see something like this run here in Australia.  I am certain that suppliers and newspaper publishers would get behind it.

I tried something kind of similar with the TV commercial I funded last year and while ACP Magaiznes, Lovatts, the Herald and Weekly Times and some newsagents got behind it, this was not enough to extend the reach.

The UK initiative appears to be more product driven.  That is important for unlocking funding and driving consumer action.

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Newsagency opportunities

Australia post price rise hits publishers

Mediaweek yesterday published a report about the impact of Australia Post price rises on magazine publishers and subscriptions fulfilled through Australia Post.

Publishers have been reacting angrily to notification from Australia Post this week about price increases which will affect the cost of filling subscriptions. One of Australia’s largest subscription fulfillment houses, D&D Mailing Services, has circulated a letter from director David Docherty it sent to Australia Post. One of D&D’s customers has subsequently forwarded it to Mediaweek. It reads in part:

This Increase is 3.9% for Parcels, 3.6% for PrintPost and a further increase to Line haul rates of 3.1% which ultimately increases PrintPost to a weighted average increase of 4.6% in most cases.

I received notice of these increases in my Sydney office from Australia Post dated 1 June 2009. The notice indicates that the increases are effective from Monday 6 July 2009 (1 months notice).

This increase is only 9 months from the last increase. Therefore the increase at this time (3 months earlier) means a further 33% increase to Australia Post profits and an unbudgeted and unplanned impost to customers as it hits one financial quarter earlier than previous years which effectively has an underlying annual increase of a further 1% increase than advised.

This is from the same Australia Post which aggressively targets small business newsagencies with its 865 government owned corporate stores.

The federal government needs to rein in this business it wholly owns.

In the meantime, newsagents ought to work closely with publishers on selling a new type of subscription – a customer pick up.  Lock in the traffic and have an opportunity to sell a year of copies and get the money, albeit a smaller amount, up front.  I know there are some challenges in this proposal, at least we ought to be at the table discussing them.  The Australia Post price rise presents an opportunity to do this.

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Australia Post

Are newsagencies opening later?

Three newsagencies I visited between 6:10am and 6:20am earlier this week were closed.  I had to get the newspaper I wanted from a 7-Eleven. I’d be curious to know if newsagencies are opening later than they used to.  In my own businesses we are in centres and no longer have runs so we open Tuesdays and Thursdays at 8am and Monday, Wednesday and friday at 7am.

To those wondering, I was half an hour from my own newsagencies and was not planning on visiting them on this particular day.

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Newsagency opportunities

Major changes for newspaper home delivery accounts in South Australia

Advertiser Newspapers announced to South Australian newsagents Monday their plan to take over managing home delivery accounts for Advertiser products. They will gradually assume control for starting new home delivery accounts, collecting payment, managing stops and starts, handling holiday redirections and handling queries.

This significant and unexpected move by the publisher has been pitched to newsagents by them as a positive move with significant benefits. The key reason for the change appears to be improved subscriber retention.

The implications for South Australian newsagents, should the planned changes proceed, could be considerable. Indeed, the implications for newsagents across Australia could be considerable. This is why the proposed changes need to be discussed and debated nationally. If they are as valuable and equitable to all stakeholders as the letter from Advertiser Newspapers says then I’d expect them to proceed. If they are not then I’d expect the proposal to not proceed.

My concerns are:

  • Transition challenges. The transition will require newsagents to hand over partial account details where they deliver and bill non-Advertiser products. Given the nature of home delivery accounts, balances handed over and or retained will be wrong.   This will make for a frustrating time for newsagents and customers. Newsagents will end up giving away credits to satisfy customers.
  • No benefit for newsagents. Many newsagents will need to maintain accounts for customers – for Fairfax product, magazines and other non Advertiser product delivered. Indeed, with the accounts being smaller one could argue that, based on experience, these accounts will be harder to collect. Indeed, from a data management perspective
  • Reduced revenue. Today, newsagents are able to sell home delivery to a customer at full price. Under the planned arrangement, the publisher controls all pricing. This denies the newsagent the opportunity of selling at a better margin.
  • Retail traffic. While many suburban distribution newsagencies are distribution only, across the state many newsagents have retail businesses which rely on account payment traffic to drive retail sales. Customers receiving only Advertiser product will not need to visit to pay the bill and will therefore have greater opportunity to purchase traditional newsagency lines from other retailers.
  • Processing delays. The current system allows customers to contact newsagents until late in the day before new run lists are printed or data transferred to electronic run devices. Centralising this in Adelaide will require an earlier cut off so that newsagents can have the data in enough time to get their local processes taken care of.
  • Relevance. The move by Advertiser Newspapers goes to the relevance of the newsagency. Newsagents provide a one stop shop for home delivery customers. Slicing that relationship up by publisher will confuse customers and demonstrate that one supplier sees newsagents being less relevant. This may, in turn, impact back on the publisher down the track.
  • Ripple effect. Newsagencies, retail and distribution, are finely balanced – take one slim plank away and there is a ripple effect. We saw this in 2004 with the ACP move to supply 800 or so petrol and convenience outlets directly. Reducing contact between home delivery customer and the newsagent, retail and or distribution, will lead to a loss of revenue in another part of the newsagency and this weakens the channel.

Some will disagree with my concerns. Others will want to add their own. Regardless of your position, please join the conversation here.

What is important is that newsagents, publishers, customers and other stakeholders engage in open discussion about this change. We owe it to each other to test the proposal and be prepared for what comes out the other side.

How the newsagents discuss and debate this plan will demonstrate our resolve in relation to the future of the newsagency channel as there will be more challenges like those outlines here.

UPDATE: I originally posted this at around 6:15am today.  I have updated the time stamp because newsagents new to reading the blog are having trouble finding this post.  I’ll leave it in this top place overnight.

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Newsagency challenges

Promoting the copying service

quayside.jpgThe landlord at the Bayside Centre in Frankston has provided access to large format poster lightboxes for June for our promotion of copying and related services.  Australia Post has moved out of the centre and they were doing good copying business.  The opportunity to promote the business elsewhere in the centre was too good to pass up.  While we wanted to hold off until we rebranded the business, the space was free this month so we took it.

We did the artwork in-house to the standards required by the landlord and and are supporting the posters around the centre with flyers given to other tenants and being put in customer bags.

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marketing

Vale McGills Newsagency

McGills Newsagency in Elizabeth Street Melbourne closes this week, a victim of changing times and soaring rent.  Entrepreneurial newsagents should be talking with the owners of McGills to access customer lists and market services around interstate and overseas publications.  This specialised part of the business has loyal customers and would be a nice earner for the right newsagent.

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Newsagency opportunities

Tough May sales numbers

We have experienced a tough May at Forest Hill with overall newsagency traffic down 14%.  While the landlord will not share centre figures, we expect that our traffic result is not different to other retailers.

All key departments are down except for Books up 39%, Calendars up 100% (at $300), Diaries up 122% (at $900) and Gifts up 436% (at over $2,000).  Magazines were down 10%, ink down 16% (this reflects a promotion last year which this year’s promotion did not start until May 28) and stationery down 23%.

Overall store revenue (not including lotteries) was down 6%.

While it would have been easy for me to not publish these figures, and provide fodder for some, I am committed to this blog being a place of transparency.

We have several promotions under way in the centre as well as external marketing to drive traffic.  We are also extending two departments which we feel will work well with our customers as well as planning to make some changes to the shop to allow us to evolve our magazine offer.

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How is business?

Books and magazines share challenges

The New York Times has a sobering report about book sales in the US from the Book Expo America, the industry’s annual convention which ended Sunday in New York.

I found the report interesting on a couple of fronts: the evolving challenge of print and the reliance of the channel on mega brands – Dan Brown and Stephenie Meyer to name two.  In the magazine space we are challenged by mega brands too, the top selling titles account for most of our sales.The opportunity newsagents have had for years is to focus on range.  We have not done this well and now that it really matters we are losing out.  I know people who will travel to a Borders for range of magazines instead of to their local newsagent.

Newsagents can embrace range and build a marketing campaign around this point of difference – if we are serious about our future in the magazine category.

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Book retailing

Ethnic media grows in the US

There is an interesting story at xinhuanet about the growth in ethnic media is the US in the face of declines being experienced by mainstream US outlets.  I have noted here for some time that foreign language newspapers outperform capital city dailies in terms of year-on-year same-store sales growth in newsagencies.  On a year to date basis in my own newsagencies I am seeing double digit growth in foreign language newspapers.

Foreign language newspapers are an excellent opportunity for newsagents.

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Newsagency opportunities

Rupert Murdoch on newspapers

Here is Rupert Murdoch talking about the future of newspapers. A must watch for newsagents.  The opening questions is: will there be newspapers?

This interview is interesting in the context of contract newspaper distribution negotiations. I remain unconvinced about the need for contracts.

The interview follows an ad for the Fox Business Network.

Every day there are more stories about this topic yet newsagents continue to agree to build shop fits with expensive purpose-built newspaper and magazine stands.  Our shop fits need to be flexible, able to change without additional capital cost.

What the interview and see for yourself the changes we need to embrace in our newsagency businesses.

I respect Rupert Murdoch.  He knows what his business stands for and pursues that relentlessley.  He also cleverly uses his own channels, like Fox Business Channel, to preach his message.  We can learn from this.  We have a traffic rich channel today yet many of us are not using this to take our customer’s hands and lead them to our future.  This is because we don;t know what the future is and because we are scared about engagement with our customers.  But those are conversations for another time.

UPDATE:  Check out the coverage this has received in the last 24 hoours.  Murdoch’s important place in this discussion is obvious.

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Media disruption

Rupert Murdoch says the future is digital

Instead of an analog paper printed on paper you may get it on a panel which would be mobile, which will receive the whole newspaper over the air, (and) be updated every hour or two.  You’ll be able to get the guts or the main headlines and alerts and everything on your Blackberry, on your Palm or whatever, all day long. All these things are possible. Some of the greatest electronics companies in the world are working on this very hard.

This is a quote from Rupert Murdoch speaking overnight in an interview with the Fox Business Network.  He provides more clarity than the News Limited executive interviewd locally for the ABC’s 7.30 report earlier this week.

This quote is important because it clarifies the situation for newsagents on News’ longer term view of a paper product.  It also fits with what Murdoch has said previously about how consumers will access information previously accessed on paper.

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Media disruption

The impact of the Internet on US newspapers

At the ABC’s 7.30 Report website is an excellent extended interview with former journalist and Crime novelist Laura Lippman about the demise of newspapers in the US. The interview provides an excellent back story to the impact the Internet and corporate takeovers on newspapers. I especially found Lippman’s comments about newspaper publisher interest in pursuing ‘young poeple’ interesting.

Publishers here will tell us that Lippman speaks from a US perspective and they will be right.  The changes she discusses are happening here – our model is such that it will take some time for the changes to be noticied.

Newsagents and those claiming to represent newsagents need to watch this interview as it provides a perspective of opportunities (or challenges depending on your perspective of change) which remain undiscussed in newsagent circles. We need to create our own leadership through these opportunities.

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Media disruption

Newsagent interest in NSW lotteries under the spotlight

Crikey today published a story by Alex Mitchell about newsagent interest in purchasing a stake in NSW Lotteries.  I mentioned this on May 1 when NANA, the NSW Newsagent’s Association wrote to members announcing its intention. The Crikey story has some interesting points:

Newsagencies in NSW have been complaining loudly about the forthcoming privatization of NSW Lotteries because of the impact on their revenue streams and the value of their businesses.

So they’ve decided to put in a bid themselves.

On Friday the Newsagents’ Association of NSW and ACT Ltd has a meeting with Treasurer Eric Roozendaal, former general secretary of the NSW Labor Party, who is leading the privatization push.

Under the bank-backed newsagents’ proposal, the government would retain a majority 51 per cent shareholding and the association the other 49 per cent.

Whether this gets up or not, it is goot to see newsagents taking a yes we can approach to such a challenge.

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Lotteries

7.30 Report on newspapers misses opportunity

I watched the 7.30 Report story on ABC1 tonight on the future of newspapers and was left wanting more.  It presented the situation and provided background but did not canvas in any detail the future.  It gave too much time to print connected people. That said, I guess for many viewers the report was news.  It will be interesting to see ff it generates questions tomorrow.

I would have preferred to see a more detailed piece: history – the collapse of classified revenue which is shaking the print model overseas and here to its core; the ripple impact of that collapse – newsagents, advertisers etc; and, the future – the opportunities to embrace change and redefine how we as a society create our own checks and balances independent of government funding to monitor those who lead us.  The future is where I’d like to see most time spent.

I’d like to see greater exploration of these issues.  I am concerned that we will call for this when it is too late and change well advanced. Now is the time for us to embrace change and escalate this.

It was interesting to watch the story on Foreign Correspondent about Detroit and General Motors which followed the 7.30 Report.  It complimented the newspaper story.  While they focus in the US on rebuilding the auto industry, some say they should focus on the opportunity of change.  We need to do the same in our newsagencies.

UPDATE: You can access the 7.30 report story here.

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Media disruption

Negotiating Your Payrise – a product opportunity for newsagents

I have been contacted by HK Consultants and asked to comment about Negotiating Your Payrise, a 2 CD Audio Course they have on offer.  They would like to place it in newsagencies for sale. It’s RRP is $19.95. Of the $18.14 (ex GST), HK will bill the newsagency $9.06 ex GST, leaving with $9.08 (ex GST) for each unit sold. Click here for a flyer.

I advised that I was not sure how the Negotiating Your Payrise would go in newsagencies in that it would need to be at the counter given the price and given that it would not easily fit into any department in a newsagency.  I can see it working well in some newsagencies and not so well in others.  This is why distribution through a magazine distributor would not be ideal.

I suggested I blog about it here so that newsagents could provide direct feedback.  The folks at HK agreed.  I am pleased for the blog to be used in this way – for suppliers to ask about whether newsagents are interested in a product.

Supply enquiries should be directed to Drew Okawa email: drew@hkconsultants.com.au.

Disclosure:  I have no commercial arrangement with this company.

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Newsagency opportunities

Google says no thanks to newspapers and makes news

The story of the week about the future of newspapers is that of an interview with Eric Schmidt, Chairman and CEO of Google published by the Financial Times.  It is referenced in more than 500 news entries listed at Google.  Schmidt explains that Google looked at investing in newspapers and decided against this.  While at FT.com you need to pay to read the interview, The Guardian provides free access to its report containing key quotes from Schmidt like:

“The reality is that news gathering and the profitability model was always an uncomfortable relationship because it’s very difficult to make money from a story about a tragedy or murder or so forth – and yet it’s enormously valuable. So the structure of newspapers that evolved, where the majority of the revenue came from classifieds and these big, untargeted print ads, the content was fascinating but they were not connected to… it was ultimately destined to be challenged by technology and that’s indeed what happened.”

It says something about the concern of the future of newspapers that this is such a story.

From a newsagent perspective, this story and its broad coverage overseas and even here in Australia provides further encouragement for us to look outside traditional categories for future growth and sales.

From the 1800s until the 1980s newsagents stood for being the go to retail and distribution businesses for newspapers and magazines.  Since the 1980s this point of difference has eroded.  What do we stand for today?  As a channel – nothing.  Individually – some of us have clear and exciting points of difference.

The Google story, like many I reference here, is a reminder that the clock is ticking – the time for us to engage proactively in our businesses is now.

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Newsagency opportunities

Using every inch of space in retail

good_health_frankston.jpgClick on the image to see how our brilliant team at Frankston is using the back of the ACP Basket Builder stand to promote Good Health and Medicine magazine this month.  This placement gets Good Health and Medicine seen by customers in the aisle in the middle of our shop, an aisle away from where the title is usually situated.  Using the back of the stand in this way extends its value to us.  Sales results tell us that this space works – with the right title it drives sales.  This is great because it is found space, space which many newsagents do not use.

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magazines

Draft unfair contract provisions of interest to newsagents

The Federal Government last week released for public consultation a consultation paper entitled The Australian Consumer Law: Consultation on draft provisions on unfair contract terms. The paper and submissions can be found here.  I urge every newsagent to download and read these and take an active interest in their passage through parliament.  As the consultation paper indicates, the changes include business to business contracts.

The draft provisions on unfair contract terms will apply to business-to-business transactions in the same way as other key provisions in the TPA do, such as those dealing with unconscionable conduct and misleading and deceptive conduct.

The draft national unfair contract terms provision includes that a term is deemed to be ‘unfair’ when it causes a significant imbalance in the parties’ rights and obligations arising under the contract and it is not reasonably necessary to protect the legitimate interests of the supplier – as noted in the press release issued by Chris Bowen, Minister for Competition Policy and Consumer Affairs.

The ramifications of the changes for newsagents could be considerable given the size of each of our businesses compared to the size of suppliers with which we find ourselves in contract disputes from time to time.

The timing of the changes will also be of interest to newsagents given the approaching new contracts for the distribution of newspapers and magazines.

While the deadline for submissions is tomorrow, there will be further opportunity through local members of parliament as the changes are debated.

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Newsagency challenges

Pay per article discussion hots up

The big discussion overseas among publishers (newspaper and magazine) this month is around micropayments – payment by consumers for individual articles.  This topic was put on the radar earlier this year when raised by the publisher of Time magazine.  Editors weblog has a good wrap up of the story as does Mediaweek.  Eric Auchard writing at The Guardian weighs in with good points too.

This discussion is of interest to newsagents because it is about a more direct publisher consumer relationship, one based on a new, digital, supply chain and one where consumers pay for what they read (articles) rather than a package (whole newspapers and magazines).

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Media disruption
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