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newspaper home delivery

Newspaper frequency changes don’t work says expert

Writing at Editor & Publisher, John K Hartman, professor of journalism at Central Michigan University,  says that frequency reductions for daily newspapers do not work.  This is interesting because of the speculation as to what is next for some Australian daily newspapers.

I am sure people in newspaper publishing companies here are looking at what has been tried in the US and elsewhere. Hartman’s assessment would be of interest to them.  Some of his comments mirror those of Greg Hywood, Fairfax CEO – that they will continue to publish as long as the numbers work. Right now for most Fairfax titles, the economic model is more a function of the demographic of their typical reader than sheer circulation volume.

My view is that it’s essential for newsagents is for to control when you get out of newspapers rather than someone else deciding this for you.

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Newspaper distribution

Is the newspaper home delivery move by Fairfax Tasmania a trial for a national approach?

Fairfax in Tasmania appears to be taking the migration of newspaper home delivery account management away from newsagents sfurther than News Limited has done so far in its own migration moves thus far.

Fairfax appears to be requiring newsagents to give up, without compensation, newsagent developed intellectual property around run delivery details including layout and sequence.

As with the imposition by News Limited of an 80 cent a copy fee on The Adelaide Advertiser being delivered in the Port Lincoln region, I wonder if the Fairfax move in Tasmania is a trial of a possible national approach.

Fairfax is taking complete control of newspaper home delivery of its products and apparently cutting newsagents out of everything except for being a courier service delivering product as directed.  However, the fairfax moves only address fairfax titles. Some drivers will have other titles. My information is that some drivers will go from one run handling three titles using a single consistent approach managing the delivery in three different ways. The time and OHS issues here are considerable.

Today, customers receive one account for multiple titles. Fairfax will bill separately and in advance – a move affected newsagents say will hurt sales.

Whereas today newsagents handle stops and starts in one system, the system they operate, there will now be two systems – one for Fairfax and one for everything else.

Whereas with migration in South Australia the newsagent continues to manage the sequence of each delivery run, with the Fairfax Tasmania moves the publisher seems set to seize this responsibility for themselves, considerably altering the business activity of the newsagent.

This move, if my understanding is correct, could dramatically cut the value of delivery newsagencies.

Further,from what I can see, Fairfax is directing home delivery customer payment traffic away from newsagents.

Another question here is what will happen with News Limited product delivery? How will newsagents handle this. Today, they magazine titles from multiple publishers into a cohesive run for each geographic territory. The Fairfax Tasmania moves appear to block this approach – unless News in party to any such move to centralise managing newspaper distribution runs.

Is what we see happening in Tasmania being contemplated for elsewhere. This is the same question I have in relation to the 80 cent a copy surcharge by News Limited in South Australia on The Adelaide Advertiser for the Port Lincoln region.

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newspaper home delivery

Queensland newsagents upset at change to News Limited terms

Queensland newsagents, still reeling from the impact of the suspended/cancelled T2020 newspaper distribution reorganisation, were shocked to be advised last week by News that they will be transferring from 30 day accounts to 7 day accounts.

With their marketplace particularly challenged, as identified by News Limited itself, the significant change in trading terms puts more pressure on newsagencies in Queensland.

While the News move is part of a national transition to a new circulation management model, I would have thought that the fragility of the Queensland distribution newsagent situation, made worse because of T2020, would have seen News delay the move from 30 day accounts to 7 day accounts.

News is making considerable moves to drive operational and financial efficiency within its business. It continues to deny newsagents reasonably opportunities to do the same in their businesses.

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Newspaper distribution

Is Fairfax against newsagents who pursue more efficient newspaper home delivery?

For years, Fairfax has taken a back seat on many issues relating to newspaper distribution and home delivery. Through then on/off T2020 discussions, fairfax has publicly said that they will most likely follow the News Limited lead.

Recent events suggest that Fairfax is no longer taking a back seat. Indeed, the company appears to have an new agenda.  I have two stories to share.

A newsagent in financial difficulty put their hand up for help. An agreement was reached to quickly sell the business to a larger distribution only operator. News Limited agreed,  Fairfax said they would consider it four weeks later. In the meantime, the financial situation of the vendor necessitated an urgent move. The purchasing distribution agent took on the business. Fairfax cancelled the contract, saying they do not recognise the larger distribution business. They handed the territory to another newsagent, a newsagent who will not make money delivering the lower penetration newspaper of the three daily newspapers delivered in this area.

The Fairfax decision does not make sense. It’s a break with how the company has operated for years. It could disadvantage customers. It certainly disadvantages the distribution newsagent as they now have some quite inefficient deliveries to complete – they will be driving down streets being serviced by the other distribution newsagent, a business with a greater distribution density.

The News Limited approach was more commercial. The Fairfax decision seems, from where I sit, to have been political and petty.

Here is the second story.

Fairfax was recently approached by a newsagent who had upgraded to the windows version of their newsagency software to help with what appeared to be a data discrepancy. I’m told fairfax representatives took a copy of the data back to their office, to match it up with the Fairfax data. I’m told Fairfax invoiced the newsagent tens of thousands of dollars based on what they found in the data. The newsagent asked for that issue to be shelved until the newsagent got the original data issue resolved. I’m told Fairfax refused and advised they would not assist in resolving the data issue until the invoice was paid. I’m also told that Fairfax threatened the newsagent with cancellation of the contract.

The newsagent did not pay and I’m told the contract is cancelled as of this week and another local newsagent found to do the deliveries of the Fairfax titles.

These two stories reflect, in my view, a backward step in much needed newspaper distribution consolidation.  For years, Victoria led the way forward. Now, it appears, Victoria is leading the way backward in terms of handling Fairfax titles.

Newsagents are left wondering about the Fairfax agenda and whether the company is hell-bent on breaking the newsagent channel. The company certainly seems to be against the larger distribution-only businesses, preferring to deal with smaller independent newsagents for its titles.

I wonder what News Limited makes of all this…

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Newsagency challenges

Newspaper masthead cover-up promoting digital edition

The masthead of The Australian was partially covered yesterday with a sticker promoting a $10 28-day home delivery / digital subscription offer.

While the masthead and editorial content coverup is disappointing, the offer itself got my attention. For 35 cents a day subscribers get the paper (six out of seven days) and digital access. The usual price – as promoted on the sticker – is $1.42 a day (over seven days).

The cynic in me wonders how much the subscription offer is about driving digital subscriptions compared to print subscriptions. If you look at the subscription offers for The Australian you can see that a six day home delivery subscription is $8.95 while a seven day digital subscription is $2.95.  On that basis, News is indicating that printing and distribution cost $6.00, or $1.00 a day. Take away newsagent commission and the delivery fee and then factor in the cost of printing and trucking the newspaper wonder how much News makes from print. The digital product is 100% News. The key is reader engagement with advertising and whether News can get to a point of making anything close to advertising from digital as it does from print.

So, I do wonder how much these bundled, print and digital, offers are about migrating people to digital. Overseas experience indicates that it’s a successful strategy for growing digital engagement.

As a retailer selling newspapers I don’t like these stickers as they seek to get people engaging less with my newsagency.

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Newsagency challenges

Double standards in News Limited South Australian move

In a statement on May 15, News Limited explained why they are introducing an 80 cent per copy surcharge (Monday to Friday) to the delivery of newspapers to newsagents in selected areas of South Australia.  This statement included:

We aim to continue to deliver newspapers to all areas of South Australia. However, News Limited has been subsidising a number of loss-making routes for many years. For our West Coast and Kangaroo Island routes, we now lose a significant amount of money on every paper we sell. This has become unsustainable and so in order to continue to deliver our newspapers when and where our consumers want them, we have been obliged to add a freight surcharge.

This statement is from a company that has for decades denied newsagents the right to charge an equitable price for the home delivery of newspapers. Despite irrefutable evidence that many newsagents lose money on home delivery, News has, for decades, denied increases in home delivery fees to a level that make them break even let alone profitable.

News has, through its denial of a fair fee for service, forced newsagents to subsidise the home delivery of its products through subsidisation by small business newsagents.

This is the double standard evident in the latest move in SA.  The company says it needs to charge the fee to create for itself a sustainable model.  If it’s good for the company why has it not been good enough for newsagents?

Okay, the T2020 sessions last year said the company got it and that it understood newsagents needed to be profitable. But what’s happened? How quickly is it moving? The best way it could show good faith with distribution newsagents would be to deliver an immediate increase in home delivery fees to an equitable level, so newsagents did not have to subsidise this activity from their own resources.

What are distribution newsagents doing about this?

Thanks to agitation from a local MP in SA this issue is gaining more attention in the media – including coverage by the ABC. I’ve just done a radio interview on SA radio about the topic. Hopefully, this attention will get News more fairly engaged with newsagents.

I know from prior contact that News would prefer me to raise the matters canvassed here with them and not here. I think the issues raised here are issues for all newsagents. They go back decades. The only solution is for News to immediately permit newsagents to do what it is doing itself – to charge a fee that reflects the actual cost to the business of providing a service.

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newspaper home delivery

Update on the News Limited move on pricing in some parts of SA

News Limited approached me earlier this week following my post about their imposition of a new freight charge in some parts of South Australia. They provided a press release / statement on their position. I did not publish it here as it did not add to the situation and I didn’t want to put their case. The ANF in SA has published the News statement, unfortunately.

My view is that what News is doing is wrong. They are passing on freight costs selectively.  Also, they are not communicating clearly and do not appear to be communicating with customers – but that may come with time.  The ANF should be as clear on its position.

News should apply freight to all non suburban deliveries – user pays right?! Their selective approach is problematic for them. They could also have produced advice for newsagents to place with the products. Finally, they could have a cover price for the affected areas – to show it’s a News charge and not a newsagent charge.

There are times when publishers treat newsagents as agents and other times when they treat newsagents as retailers. They can’t have it both ways.

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Newspaper distribution

While News Limited failed, for the moment, at newspaper home delivery consolidation, a group of newsagents have succeeded

Long before the aborted trial of T2020 in Queensland, one distribution newsagent group was ahead when it came to consolidation. Through T2020 they continued and right now they handle the daily delivery of more than 100,000 newspapers.  You read it right – 100,000+ newspapers, every day.

There is a model here addressing management and operational challenges real time, embracing learnings that newsagents and publishers could benefit from.

While News works on the next incarnation of T2020, I hope they look at this model which has been working and growing for years. To me it seems to address their needs – if only they’d let it.

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Newspaper distribution

Fairfax to take newspaper home delivery customers from Tasmanian newsagents

Representatives of The Examiner, a Fairfax owned daily newspaper serving Northern Tasmania, started meeting with newsagents four weeks ago to advise them that they, Fairfax, would be taking control of home delivery customer management.

Newsagents were shocked, it was the first they had heard of this move. Up until now, newsagents have managed all aspects of home delivery of The Examiner – customer billing, payment, stops, starts, run management.

I’ve been told that ANF was advised by Fairfax of the move in November last year. It has also been put to newsagents that the ANF ‘ticket off’ (approved?) the move back then.  Newsagents I have spoken with want to know why the ANF kept this news from them for four months.

UPDATE (1:15PM) The ANF has advised that they first heard of this in January and even then in extremely vague terms. They did not and have not ‘ticked off’ the Fairfax plans. I note that my original information came from someone told by fairfax. the ANF has written to Fairfax to correct this misinformation.

The Fairfax pitch is that they will take charge of the customers, manage all aspects of the account, promote subscriptions and promote an associated digital offer.  This appears likely to lead to a lower level of remuneration for newsagents.

Fairfax is offering nothing for the effective take over of the customers, many of whom have been acquired directly, through the hard work of newsagents.

Fairfax representatives have apparently said that they will give customers the option of paying for home delivery at the post office. Really?  I’d be shocked if they did this. there is a perfectly good retail network in place today – newsagents.

Fairfax is also planning to require all customers to pay in advance. They are apparently offering customers a voucher to sweeten this move.

As recently as five years ago The Examiner purchased territories off newsagents. Back then, the company considered the home delivery customers acquired by the newsagents had a goodwill value. This latest move could be seen as takeover by stealth. This is one of the concerns of newsagents – what happens to their goodwill?

The ANF is getting legal advice in Tasmania. This feels too little of a response too late. I’d prefer legal advice from those with national experience in this space, experience in dealing with publishers. This legal advice ought to have been sought in immediately Fairfax advised the ANF of their intentions.

UPDATE: (1:15PM) Based on what the ANF has advised their timeliness in getting a legal response has been good.

The Examiner prints between 30,000 and 35,000 copies a day. This low number makes me wonder about the viability of the print edition. Okay, as a regional newspaper the economics are different and a lower print run can be more profitable in this situation than in a capital city. Still, 30,000 to 35,000 copies is low. I wonder if the Fairfax move is to prepare the business for a switch to digital only or, at the very least, to reduce print days. They can’t easily do this unless they own the customers. Currently, the don’t own the customers.

I was in Launceston yesterday and spoke directly with several newsagents affected. Outside of their concerns about losing the customer accounts asset of their business and therefore significant goodwill, they explained the nature of their customers and an expectation that a decent percentage would not want the details held by their local business being handed to a national business.

Some said they’d expect to lose at least 10% of home delivery customers because of the move of account ownership from the local business to Fairfax.

Some said they expect Fairfax would lose more customers by requiring payment in advance.

These issues could have been fully canvassed through a more open consultation. As it has been done, the newsagents involved are stressed at the late notice grab for an important and valuable part of their business.

What is happening with newsagents in Northern Tasmania ought to concern all newsagents. Some of our own are being treated with disrespect and unfairly. They have been let down by their association.  Hopefully this blog post leads to more active engagement by all to treat newsagents fairly.

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magazine distribution

Is Fairfax planning on stopping suspension of newspaper subscriptions?

Being able to stop and start the home delivery of newspapers is a long-held feature of the Australian newspaper home delivery model. I was surprised when someone asked me if I had herds, as they had, that Fairfax was planning on stopping the suspension service in a couple of months.

Of course, it could be that Fairfax will allow the suspension for the delivery but not an extension of the subscription period. This would allow the company a financial gain. Customers would be unhappy if it is the case.

So, has anyone heard anything about this?

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newspaper home delivery

UK publisher launches app for shoppers to pay for newspaper

UK newspaper publisher Trinity Mirror has launched an App for handling the payment of newspaper purchases according to a report in the Press Gazette.

The pilot of the free PaperPay app for iPhone and Android was launched this morning. It enables users to pay for The Daily and Sunday Mirror in advance, and then use a barcode on their phone to buy papers in newsagents, rather than with cash.

Trinity Mirror says the service can be used in more than 47,000 newsagents that have PayPoint or Payzone technology. As well as a pay as you go service, weekly, monthly and annual subscriptions can be purchased.

This is a smart move as it brings to regular over the counter shoppers the financial benefits of home delivery subscriptions. From a newsagents perspective it may not be so great as they may make less per newspaper sold – I am not sure of the details.

It would be easy to get a similar program up and running here – either through an App, a coupon program or a mixture of both. It would be easier to implement this type of program through newsagencies than the other retailers selling newspapers.

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Newspaper distribution

News Limited preparing for migration of newspaper subscriptions in NSW

News Limited has advertised a role key to their implementation of newspaper subscriber migration. The role, Change Manager – Subscription Migration Project jobs in Sydney NSW 2000, was advertised a couple of days ago.

Migration is separate to T2020 but does form part of the overall goal of T2020 – to make newspaper distribution more efficient for the company and more viable for newsagents.

Migration when first announced in South Australia some years ago was flawed. News did listen to newsagents and adjusted their plans. This was especially important to retail / distribution businesses that rely on newspaper home delivery payment traffic to support viability of the retail operation.

This latest advertisement for a change manager shows that Migration in NSW is close. It also provides timeline guidance on the project.  The ad included this information about the role:

This position will lead the development and implementation of a change management plans in support of the Subscriber Migration project. The primary focus will be developing and coordinating the implementation of the change management and communication plans to facilitate the collection and migration of subscriber data from Newsagents to News Ltd.

The change manager will work closely with senior stakeholders within the business as well as with newsagents and their state organisations to analyse issues, develop approaches and deliver change management outcomes in line with defined program objectives.

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Newsagency management

Further information from News Limited on T2020 changes

Further to my blog post this morning about News Limited’s T2020 newspaper distribution consolidation trial, News Limited published further information, in a letter today to newsagents. They have also published a Q&A document.

Tomorrow, a new website, www.news4newsagents.com.au, will be launched. It will be a forum for News to communicate with newsagents on a range of initiatives, and newsagents will be able to send their comments to us through a feedback form on the website.  Newsagents also have access to direct email contact: newsagents@news.com.au.

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Newspaper distribution

Opportunities for newsagents in the News Limited T2020 decision

I spoke with Catrin Thomas – Director of Retail Circulation at News Limited, this morning about their decision to suspend the T2020 newspaper distribution consolidation trial in Queensland.

The trial itself is what has led to the decision to suspend T2020 as planned and to move to a more free market approach. News will shortly announce details of how newsagents can engage in their locally-driven territory consolidation models. They will also launch a new website to support this.

Catrin advised in the call that News remains committed to consolidated territories but that they will not set a size requirement for a consolidated territory.  They are also committed to their public statements regarding financial viability of distribution newsagents.  News also remains committed to the separation of distribution and retail activity.

Newsagents will be invited to submit proposals to News.  While I expect that Associations will suggest that proposals come through them, I’d encourage newsagents to develop plans and submit them directly through processes to be announced by News.

The challenges encountered in the trial remain and some newsagents who do not navigate these challenges will find themselves in difficulty in the more competitive world that will now emerge. The extent of difficulty will depend on geographic situation and other factors. News is not saying this – it’s purely my observation / speculation.

What has changed are the trial itself in Queensland and the roll out by News down the Eastern Seaboard. The goals and principles remain the same. The move to a more market driven approach will provide proactive newsagents an opportunity to move sooner.  It also opens up the prospect of competition from outside a territory. This could play out well for existing newsagents but it could equally intensify the challenges they face.

There is no reason for a distribution newsagents to adopt a wait and see approach. Now is the time to be on the front foot, pursuing change, pursuing what is best for your business. No one can tell you what to do in terms of your business other than the fact that you now need to do something – the timing is yours to embrace.

Footnote: It’s been suggested to me that one or more associations may create a commercial entity through which newsagents bid for and or drive consolidation. I’d see such a move to be outside their role as an association. They have no role to play in operating commercial enterprises.

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Newspaper distribution

News Limited suspends T2020 newspaper distribution consolidation

News Limited has announced the suspension of the T2020 territory consolidation trial under way in south east Queensland.

News Limited now moves to a voluntary consolidation model.  This is particularly appealing to Victorian newsagents who have been at the forefront of territory consolidation for years and have been held back by the News T2020 process.

While there will be speculation about the reasons for the decision by News and claims by associations that they have driven this decision, I am certain the company made the decision because it suits them at this time. This is their decision and not something forced on them by anyone.

I see it as a pragmatic decision based on the challenges experienced in trying to consolidate territories in a state where newspaper home delivery has been in crisis for some years. Just over a year ago I claimed that the company was in crisis in relation to newspaper home delivery. They vehemently denied this at the time and engaged in an offensive pitching that they had a plan. Months later, T2020 was the plan.

While T2020 as planned will not happen, I am certain we will see consolidation, maybe faster than the company actually planned.

The needs of News Limited which were driving their pursuit of T2020 remain. Newsagents need consolidation. Indeed, many need the ability to hand back their runs urgently.

In the meantime, there are newsagents in Queensland in the middle of consolidation under the T2020 rules /guidelines who need attention from News. There is even an argument for compensation given the commercial impact of the now suspended changes that they had had ti live with for many months. These newsagents need independent professional advice.

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Newspaper distribution

News Limited IT failure impacts newsagent customer service

Check out the email to distribution newsagents in Queensland from News Limited:

Dear Newsagent

We recently discovered holiday stops from the subscriber website were not being transferred into our system from November 17th to December 16th 2012.

As a result of this problem you did not receive any notification from News Queensland to suspend newspapers for some customers during this time.

The credit that was to be applied to your account for the papers that would have been delivered during this period was unfortunately debited to your account dated week ending 23/12/2012.  To rectify this, your account for the week ending 30/12/2012 will have two credits applied, the first to reverse the incorrectly debited amount, the second to apply the appropriate credit.

We apologise for any inconvenience this may have caused.  If you have any queries please contact your area sales manager or Circulation on 1800 648 591.

Circulation
News Queensland

I feel for the newsagents and the challenges the News Limited failure would have caused for them.

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Newsagency management

Tower Systems community expands with acquisition of another newsagency software company

I am pleased to share this announcement about the acquisition of the respected MrNews software business serving Western Australian newspaper distribution newsagents by my Tower Systems company.

Tower Systems purchases MrNews newsagency software, reaffirms confidence in newspaper distribution businesses

Newsagency software company Tower Systems has agreed acquisition terms with the owners of the MrNews newsagency software business.

MrNews serves in excess of one hundred home delivery newsagents in Western Australia.

Tower Systems will assume full responsibility for the MrNews software and customer service from early next month.

“We will maintain the MrNews software, price model and support. MrNews users will not be pressured to switch” commented Tower Systems Managing Director Mark Fletcher. “Our development and help desk teams will be trained in MrNews so that we can provide easy access to quality support.”

“We are thrilled to have found a place where MrNews users can be confident of access to good software and service” commented Arno Staub and Graham Kilmurray, the owners of MrNews. “We are looking forward to working with Tower, training their people and introducing them to our happy customers.”

The Tower development team has been working with West Australian Newspapers to be ready to support changes to their home delivery management and account payment model.

The acquisition, the second of a newsagency software company this year by Tower Systems extends its newsagent customer numbers to more than 1,900. The next largest newsagency software company is POS Solutions with an estimated 600 newsagents as customers.

“Newsagents concerns about T2020 and other challenges facing home delivery should see this investment by us as a show of faith in the newsagency marketplace and home delivery in particular.” Commented Mark Fletcher

The Tower software serves newsagents in newspaper distribution, sub agent management, retail management, stock control, theft management and supplier integration.

With consolidation of newsagency businesses and newsagent suppliers very much in play, this acquisition is not expected to be the last in the newsagency software space.

Newsagents using the MrNews software are welcome to contact MrNews or Tower Systems for more information. Once the hand over has been completed Tower Systems will email and mail help desk contact details to all MrNews customers.

I mean it when I say that this acquisition is an indication of my confidence in the distribution side of the channel. The opening of a new shopping centre newsagency (without lotteries) this week in which I have a 50% share is evidence of the confidence I have in the retail side of the channel.

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Newsagency management

Updated T2020 communication for newsagents from News Limited

Click here to see the updated FAQs from News Limited T2020 and here to see the letter sent earlier this week. I have spoken with Catrin Thomas this week and am assured that News is genuinely listening to and engaging with newsagents through this trial in Queensland.  I saw this happen first-hand earlier this week between a newsagent and News to address a concern over the recently announced delay.

Having been involved in this process since it began three years ago I’d note that the approach of News over the last six months is completely different – more engaged with newsagents, more flexible and more transparent – than in the two and a half years prior. It is good to see News working direct with newsagents. This is a project to be worked on operationally by the contracted parties and not through a third party.

I have a vested interest in T2020 with 1,700+ newsagents using my Tower Systems newsagency software, many of whom offer home deliveries. I have no deal with News.

I understand what they are doing and why. It is necessary structural change. Many newsagents saw it coming years ago and made appropriate business decisions. While this is not an I told you so, I’d note that I sold my newspaper home delivery run in late 2006. I explained here why I did it and what I thought would happen with runs.  Associations and brokers had this same information. Industry leaders had the information too. Yet many let newsagents steam ahead thinking it was business as usual for newspaper home delivery.

Newsagents are complaining about News Limited and what they are doing with T2020 should look back at themselves and the newsagent leaders over the years and ask why they did not act before.

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Newspaper distribution

Newsagents need to trust that they can build bigger profitable distribution businesses

Barack Obama was elected the President of the United Sates by a surge of hope for change on the back of a simple catch cry: Yes we can.

While his effectiveness in leading change and achieving goals from the wave of hope will be determined in the election in November this year, his campaign was effective in getting many Americans to believe in themselves again.  I am certain that the campaign in itself led to individuals and groups embracing and leveraging change.

While some of us have spoken with and to newsagents about change for many years, the detail of the announcement from News Limited this year has made embracing change an imperative for all newsagents. I see it as a catalyst for better business planning, faster business decisions and better quality newsagency management.

I have spoken to many newsagents this week who feel that they can’t step from a business delivering 500 or so newspapers a day into being part of a business delivering 10,000 or more newspapers a day.  While it does seem like a big leap, there are newsagents who have made the transition and many of these operators are happy to share their experiences with their colleagues.

There are newsagents who have merged runs to form a larger business. There are others who have acquired the runs of others to create their bigger business.

The core skills are business planning, operational process management and a focus on excellent customer service.

These are newsagents who have lived the transition already by chasing it for themselves. While there have been challenges, each of these have previous experience which can be tapped into by those yet to make a move.

This is a time for newsagents to talk with each other … to explore possible partnerships or to learn from experiences of others.

Newsagents large and small have demonstrated an extraordinary capacity for hard work and working through change. The changes ahead in newspaper distribution can be embraced by the channel. I am sure of that.

Newsagents outside the three regions in Queensland that are part of the next phase should be talking with colleagues (including those who have consolidated ahead of the change) and considering business plans of their own. This should be happening now so that when their time comes to actually make a one they have considered all available scenarios.

Our channel has its  deniers and procrastinators. Look at those who were shocked by the News announcement this week. The reality is that it had been forecast long ago and discussed many times publicly following first being forecast.

Most of all right now, newsagents need to believe in themselves … that they can navigate the changes ahead and take on larger distribution businesses if that is what they want.

I can be reached on 0418 321 338 for any who want to discuss the changes.

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Newsagency management

A big day for newsagents and newspaper distribution in Australia

Today at 10am, newsagents will get to read more about changes in the newspaper distribution model. At 10am, News Limited announces the changes being delivered through the T2020 project. Click here to see the FAQs document from News.

While the changes most immediately affect retail and distribution newsagents in three regions in Queensland, newsagents in other states, except for South Australia, will eventually be affected.

What will be announced today by News Limited are the goals and processes of the restructure of newspaper distribution. Newsagents will read about the target distribution territory size and the process involved in expressing interest in and ultimately bidding for the right to handle newspaper distribution in a territory.

The new newspaper distribution remuneration model – fee for service – along with the new model based around scale (and operational efficiency) represents the most significant change in newspaper distribution in living memory. While we can argue about the time this has taken and complain about the misinformation along the way, we need to focus on the announcement itself for this will be what really matters to newsagents.

News Limited will lay out a process through which distribution newsagents can engage in a contract which provides certainty for a fixed period of time. At the heart of the contract is the desire for newsagents to have a business model which enables them to be profitable.  With so many newsagents operating unprofitable distribution businesses, a newsagent profit focused goal from a newspaper publisher is welcome.

The newsagents who will be the first affected by the changes, those in the three areas in Queensland, have been briefed in a series of face to face meetings with News Limited executives.  This in itself is a sign of good faith by the company – having senior management face to face in newsagencies talking with newsagents directly affected.  The approach News is taking in these trial regions is one of active consultation with a view to tweaking the process based on feedback.

The approach News is taking reflects learnings from what the company delivered in South Australia a few years ago.

Newspaper distribution restructure activity beyond the three Queensland regions will not to be looked at until 2013. While this will frustrate some, it’s a good move as it enables thorough analysis of the Queensland trials.

I have been briefed on the changes as have the industry associations.  The process makes sense to me. The goals are good for newsagents and necessary for News.  Yes, some newsagents will be unhappy at losing their distribution businesses. This has been in prospect for several years now. Those with a view to the future have had an opportunity to sell up.

There will be some who paid too much to purchase their distribution businesses. I wish there was an easy answer here.  There is not other than to wonder what advise was provided at the time of purchase and what due diligence was undertaken.

Today is the beginning of a new era. I urge newsagents to engage with the process and to consider carefully the business decisions they will need to make.

The most important role newsagent associations can play in all this is to be an association, working with newsagents on business plans, budgeting and the tender process. I say this because I worry than some may prefer to play a commercial role while neglecting their real role.

From a personal perspective, through my newsagency software company I’ve been involved with many territory consolidations from small to the largest in Australia. As an indication of what I see for the future, I have signed off a significant investment by my company in software enhancements to get to the next level of newspaper distribution management facilities newsagents will need in 2013 and beyond. These changes will be delivered to newsagents at no cost.

The Australian has the story on page 28 today.

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Newsagency challenges

What I think about the future of newspaper home delivery for newsagents

I was talking to a newsagent the other day who said oh that’s right, you think newspaper home delivery is dead.  I don’t think it’s dead, actually.

While I don’t see much upside in newspaper home delivery as a stand-alone operation or a smaller scale operation as it has been in the past, I work with newsagents who are building larger and successful home delivery businesses.

Indeed, I have signed off on considerable investment by my newsagency software company in a new suite of enhancements in the newspaper distribution facilities in our software.  I would not be spending into six figures enhancing newspaper distribution software if I did not consider there was upside for my newsagent colleagues and my software company.

So, my actions answer for me.

Yes, there will be mass consolidation of newspaper distribution businesses over the next two years. The reality is this has been going on, quietly, for the last few years. I know newsagents running warehouse operations that have grown through acquisition. These are good businesses.

The wash up is that newsagents running loss making distribution businesses as well as retail businesses can concentrate on what they do well.  I am hopeful that a result from this will be better retail newsagents.

While there is no obvious upside in the future of print newspapers, there could be considerable upside in a professional locally based distribution business.  It’s this opportunity that gets me investing my own money in better newsagency software.

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Newsagency management

News gives Vic. newsagents a small newspaper home delivery increase

News Limited has given Victorian newsagents a welcome yet paltry increase in newspaper home delivery fees. Newsagents continue to be paid less in real terms today than they were paid ten years ago. But News does’t care.

I am confident that there are some in News who are ashamed at the increase.

The company also disrespected those who help newsagents by announcing the fee increase on July 2 for an increase which took effect from the same day. There was a time when the company would have respected service providers like software companies and provided a week or two of notice so that appropriate advice could be repaired in advance.

See my comments about the small increase for NSW newsagents last week. The comments apply here too.

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Newsagency management

NSW / ACT distribution newsagents get a small newspaper home delivery rise

News Limited yesterday announced to NSW / ACT newsagents that it is permitting a small rise in newspaper delivery fees. NANA called it a CPI rise and rightly noted that it was insufficient:

Naturally, for most Newsagents, the current fees including this new increase do not compensate for the true cost of distributing newspapers.

While News Limited is very publicly exerting control over its own commercial situation with major announcements last week and this, it continues to refuse small business newsagents the right to charge a fair commercial fee for the valued and lovers newspaper home delivery service.

A company committed to the free market system would support newsagents charging a fair fee. News Limited has its own reasons for forcing newsagents to accept lower fees in real terms for delivering newspapers in 2012 than a few years ago. I think their position is selfish and unfair. Yesterday’s announcement, while better than nothing, maintains the insult to newsagents for the fine home delivery service they provide.

What I wrote almost a year ago today in response to a similarly small rise for Victorian newsagents holds true today:

News Limited businesses The Herald and Weekly Times and The Geelong Advertiser this week announced agreement to permit a 5% increase in newspaper home delivery fees for their products.

While any increase is better than none, this paltry increase is socially irresponsible in my view.

How this situation can exist is appalling. This massive multi-billion dollar corporation which derives the bulk of its revenue from advertising controls the entire income stream newsagents earn from newspapers (cover price and delivery fee).

Newsagency distribution businesses, as commercial enterprises, ought to be able to set their own fees and through this control business performance levers. The current situation, where there is no control over revenue and only limited control over costs leaves newsagents to continue to perform as indentured slaves.

The introduction of the Modern Award has significantly increased costs for newsagents. Fuel prices have risen yet News Limited knowingly agreed to a newspaper home delivery fee increase which does not permit newsagents to pass on even these basic operating cost increases.

This right wing organisation which invests thousands of gallons of ink in deriding Julie Gillard and pretty much all Labor politicians as harming Australia and the Australian economy is killing the newsagent operated newspaper home delivery business with this tight-arse decision.

If the company was true to its right wing core it would not approach newspaper home delivery in the socialist way it does today. It would agree to a genuinely free market approach: a fair fee for a good service. Newsagents know that customers would pay. They also know that the market itself would set the price.

News Limited is hurting small business newsagents and their families and employees. They are reducing newsagents to working for less than a basic wage.

But you won’t read about this socially irresponsible behaviour in the News Limited press.

How dare they sit in their high-rise offices and decide what is fair for the newsagent in the trenches managing the delivery of newspapers?

Maybe that is harsh. Probably so. I hope it has got attention.

I sold my newspaper distribution business years ago because I saw no upside in newspaper home delivery for a business my size.

The number of newsagents giving away or walking away from their home delivery businesses has increased. This is a message publishers are yet to grasp. But maybe they have and maybe that is why the percentage fee increase is less than necessary to keep ahead with costs.

I’d love the people in News Limited who were responsible for this decision to front an open forum where they can present the merits of the decision and submit themselves to debate. I would be there for sure!

Newsagents need to put food on the table for their families and the families of employees. The decision by News Limited leaves newsagents financially worse off than a year ago. This is not just. It is socially irresponsible.

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newspaper home delivery
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