newspaper home delivery

Newspaper home delivery is on the move with more newsagents selling, merging or walking away from their newspaper distribution territories. While I do not have accurate data, there is no doubt, based on newsagents I have directly spoken with, that movement around distribution businesses has picked up pace this year.

I suspect that the surge in movement is due to new contracts from News and Fairfax which are expected to further challenge the model, a model which the publishers themselves created and which they have controlled since its inception.

It is interesting seeing more corporate distribution businesses emerge through this period of disruption and consolidation. There appears to be more activity in Victoria in this area than any other state from what I can tell.

While the challenge for newspaper distribution businesses remains, the larger businesses do have more opportunities for leveraging scale to their advantage.  They can achieve this by reducing management and other overheads.

That said, the newspaper home delivery model is a problem which needs attention.

A model where you cannot set your sell price, cannot reasonably control your costs, cannot leverage ‘your’ customer base for other revenue and have to lower margins when your supplier discounts their product is a difficult model in which to grow outside of acquisition and this has its own costs.

Australia Post has announced a one percent fuel surcharge on domestic and international parcels and international letters.  The Sydney Morning Herald has details.

Given that newspaper home delivery drivers are paid under an award relating to transport, newsagents should have the capacity to pass on cost increases, such as the fuel hikes which have hit since the newspaper distribution fee structure was last set.

While there has been some movement in some states, it has nowhere near kept up with the increase in fuel costs.

This situation where distribution newsagents have no reasonable business levers with which to manage the profitability of their business condemns them to shoulder an unfair burden in the cost of getting newspapers to subscribers.

Like Australia Post and other transportation, distribution newsagents, local transportation companies, need the right and capacity to pass on cost increases to those who use their services.

I bet newspaper publishers factor in cost increases when they set their advertising rates.

NANA President Andrew Packham contacted me tonight to advise that he had tonight received a call from Adam Lamb, Director, Circulation Operations, Fairfax Media to advise that they had considered the NANA / ANF proposal and considered it to be a fit.

The Guide will continue to be inserted into all copies of the Sun Herald by Fairfax Media and Newsagents will insert The Guide into The Sydney Morning Herald on Mondays for the customers who opt in and for the previously offered 15c fee.

This process will commence this weekend.

Click here to see a document from Fairfax outlining details.

Newsagents will receive faxed advice of the subscribers for next Monday in the morning.  Details of the changes will be on the Connect website tonight.

Click here to link to the original thread with more than 180 comments on this topic.

Kudos to NANA and the ANF … and to Fairfax for listening.

NANA has developed a Cost Benefit Analysis (CBA) spreadsheet with the aim of the final information for presentation to Fairfax Media (FM), showing the true costs of the TV Guide insert process. FM will be given the invitation to review any of the figures which are presented. At all times Newsagent anonymity will be maintained, unless the Newsagent gives written permission to NANA for Fairfax Media to review a specific Newsagents’ data.

An early determination, from limited input, has revealed that this process would be a multimillion dollar loss across NSW Newsagents. Therefore, the importance of participating in this evaluation, for the full 5 week period, cannot be overemphasised. It is for your benefit and clearly elicits the dollar impact on your business.

To obtain the spreadsheet, relevant to your version of Excel, go to the NANA website www.nana.com.au and also read this article in full.

I have published this information from NANA with their permission.

Fairfax has this evening contacted NANA President Andrew Packham and advised that they will delay the implementation of the delivery changes for the TV Guide for a week.  They will post details on the Connect site for newsagents.  NANA will have more to say about this tomorrow.

Hopefully, commonsense will prevail and Fairfax will take on board the details of challenges associated with their proposed TV Guide move as articulated y NANA, the ANF and many newsagents through forums like this place and not proceed at all.

Click here for the original post and all the comments by newsagents.

Just after the announcement that Fairfax and News Limited had met to discuss newspaper distribution, the collective of newsagent associations released their New Territories Report.  This report lays out several principles which they consider to be important to newsagents in negotiating the newspaper distribution model of the future.

Internally, News and Fairfax are playing their cards close to their respective chests.  Newsagents need to approach this project in a similar way.

In the late 1990s newsagents botched the negotiation of new contracts.  The egos of a couple of blokes got in the way and newsagents were left with poor representation on a crucial matter.

While the report from the associations released yesterday makes a range of statements with which I agree, I would feel far more comfortable if I knew that they were being advised and guided by a text of professionals from outside the channel: legal people, economists and business strategists.

If newsagents want to have a strong position at the table discussing the future of newspaper distribution, they will need to stump up the funds necessary to be as well prepared and represented as the publishers.  This is not happen in the late 1990s and the result was a poor one for newsagents.

I applaud the associations for making the report public.  Now, I’d like to see details on their expert external advisors.

A couple of days ago I was contacted by The Australian to discuss Christmas newspaper pricing plans.  They wanted to make sure that their plans fitted in with what newsagents could handle with their software.  Not all publishers think about the impact on newsagents of their pricing an supply decisions so kudos to the folks at The Australian for their initiative.

With advance knowledge, the team at my newsagency software company, Tower Systems, is better able to help newsagents who want assistance in dealing with the one-off changes.

An article in the Australian Financial Review on Monday foreshadowed major changes at Fairfax, especially for The Age and the The Sydney Morning Herald.  While the next announcements are expected to be more about editorial than distribution, it has been suggested to me that a distribution review could lead to a shake up in the model.

The issue, as always, is about cost.  The cost of landing a newspaper on a subscriber’s lawn is considerable.  It is natural that publishers are looking for ways to cut distribution costs.

The Age newspaper was five hours late getting to some newsagencies yesterday.  Many customers did not receive home delivery copies at all.  This made for some very angry customers – especially in retail only newsagencies.  In a couple of instances I have heard of, the limited stock which did ultimately arrive was sold out by 2pm.  Not a good situation all round.