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newspaper home delivery

Flat Wrapped newspapers close for South Australia

South Australian newsagents have been advised by Advertiser Newspapers that they are expecting the first flat wrap unit to be delivered this month.

The team at the Avdertiser will test the machinery as well as the characteristics of the paper. Three more units will follow in the coming months.

While initially Advertiser Newspapers will move to flat wrap for the home delivery runs it manages, the plan is to transition flat wrap to newsagent deliveries. The overall change over for metropolitan newsagents is expected to be completed by June 2012.

Advertiser Newspapers is providing training for newsagents and their employees. They say they will be engaging the ANF to develop operating procedures.

There is no discussion in the latest documentation about changes to delivery fees or the impact on the time taken to deliver each newspaper as a result of flat wrapped newspaper product.

This move in SA is interesting in the context of publishers around the world, including Australia, considering what life could be like after print.

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newspaper home delivery

Cafe subscription promotion from News Limited

News Limited is running a cafe subscription promotion unlike any I have seen in the newsagency channel.  The number of titles per day varies by cafe.  Even the days of week of the offer varies by cafe.  This appears to be a very flexible subscription offer.

Some newsagents I have spoken with have seen full price sales migrate to the News Limited offer.  Not only do they lose the full margin sales but they have to provide a higher cost delivery service.

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newspaper home delivery

Newspaper publishers say they got it right in cutting home delivery

The Associated Press has a story about the impact in Detroit when two newspapers moved from daily to publishing three days a week.

More than a year later, Detroit newspaper executives are convinced they made the right call. If that holds up, other newspapers could follow as they look for ways to save money to offset a three-year slump in advertising, the industry’s main source of revenue. About 100 U.S. newspapers already have reduced the number of days they publish or have shifted exclusively to Web editions, but Detroit is the biggest market to try a version of either move.

Our home delivery model is quite different here, I suspect because newsagents carry more of the distribution cost than do newspaper carriers in the US, so the pressure to cut days from the print schedule is not as great.

Those who seek to lead newsagents should be researching these moves in the US, as I noted at this place a year ago.

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newspaper home delivery

Forget newspaper home delivery says US newspaper publisher

Sam Zell, Chairman of newspaper publisher Tribune was on CNBC yesterday talking about their bankruptcy proceedings.  In the same interview he commented about the future of newspaper home delivery. and “how the media and particularly the newspaper side of the business are going to change in the future.”

Zell said: “going forward, it’s going to require all kinds of different approaches, including probably most significant, the elimination of home delivery and the replacement of it by PDFs.”

Checkout the report at PaidContent.  Then watch the video.

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Media disruption

Helping newsagents collect newspaper home delivery payments

Tower Systems is helping newsagents in South Australia collect newspaper home delivery payments through its free eziPass electronic payments platform.  Using eziPass,retail newsagents will be able to collect payments from home delivery customers and receive a service fee for providing this service.  The fee itself is being handled between News and the newsagents.

Click here to download the signup form to get ready to access this facility through eziPass.  Newsagents already accessing Touch products through eziPass will not need to complete the form.

The eziPass platform is available to all newsagents regardless of the newsagency software they run.

This project is quite separate to the PayPoint project launched by Tower Systems a couple of years ago which enables retail newsagents to collect home delivery account payments on behalf of distribution newsagents.

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newsagent software

Why the iPad is not an ideal home delivery device

The Apple iPad in its current form is not ideal for assisting with newspaper home deliveries.  The GPS is not accurate enough nor the update speed fast enough for what would be needed in a suburban newspaper distribution situation.

Also, the only sat nav facilities in the iPad are for Google maps, not Melway or other maps.

The other barrier is cost.  Would newsagents be prepared to put around $1,000 of technology in a vehicle for deliveries?

I think the iPad has many applications of interest to newsagents and other business operators – just not in the home delivery area at this stage.

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newsagent software

News Limited subscription payment plan set to launch

The News Limited newspaper home delivery account payment service is set to launch through newsagencies connected with Touch Networks through electronic payment platforms like eziPass.

While initially launching in South Australia, the technology being used by News will enable payments to be processed interstate should the project extend this far.

The newspaper home delivery model is changing on a range of fronts and newsagents with home delivery businesses need to take careful note of these changes as they modify their business plans.

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newspaper home delivery

Herald Sun production problems

The production problems with today’s Herald Sun newspaper meant that we did not receive any newspapers until 9:15 this morning.  What was most interesting is the number of new customers who visited between 7am and 9am.  These were people who usually bought their newspapers from the supermarket.  At least we offered customer service, explaining the production problem and providing an availability time esitmate. I gather that the supermarket employees were unhelpful.

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newspaper home delivery

Newsagents negotiating on workplace changes

In another example of the high cost of rushing changes, representatives of the federal government are working with newsagents and their representative bodies to overcome problems caused by the workplace changes introduced earlier this year.

I don’t know who is to blame for the changes which looked set to significantly increase newspaper home delivery costs and make many casual employment arrangements untenable for newsagents.  That said, it was a government initiative and so the government must be responsible for the months of uncertainty and stress for many newsagents and their employees.

The resolution which is ultimately negotiated ought to have been put in place prior to making the changes.  Had this been done, considerable time and money could have been saved.

Governments have an obligation to get it right.  They keep telling us how hard they work for us – maybe they could show it by not introducing problems.

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newspaper home delivery

Bigpond blocks newspaper home delivery account emails

Spam rules within Telstra’s Bigpond organisation are getting in the way of some Victorian newsagents who want to email customer accounts.  This has meant that the newsagents have had to make other arrangements to get the business accounts to their customers by email.  Tower Systems has helped out by providing newsagents with free mail server facilities for sending out home delivery accounts.

This issue has come to the fore in recent days because of the fee changes announced by the Herald and Weekly Times.

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newspaper home delivery

US newspapers continue circ decline

The New York Times yesterday reported that average weekday sales in the six months to the end of march declined 9% over the same period a year earlier.  The Wall Street Journal was the only newspaper in the 25 largest to report a weekday increase – 0.5%.

Australian newspaper publishers have retail and distribution newsagents to thank for a healthier marketplace here.  We provide a retail profile and consistency unlike anything you would see in the US.

Take the current AFL card promotion.  It drives newspaper sales.  No doubt about that.  Such a program would be hard to execute in the US due to an inconsistent and disparate retail network.   Look across a year and the promotions we run on behalf of publishers and you soon see the value of our network to a publisher wanting to drive single copy sales.  Yep, newsagents are important to publishers.

Elsewhere in the US circulation newspaper news yesterday was the news that sales of electronic editions increased 40% for the top titles.

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newspaper home delivery

Newsagents to mount a legal challenge on overweight newspapers?

Further to my post on Saturday about the response by News Limited to the problem of overweight newspapers, I have been sent several copies of letters received by newsagents. On state based letterhead, News has effectively sent the same letter to all recipients. In the letter, three and a half years after newsagents raised serious concerns about overweight newspapers and the prospect of implications for OH&S, News says that newsagents are responsible for OH&S issues stemming from newspaper delivery.  This has some newsagents seething.  It’s been put to me that newsagents could form a legal fund to challenge the position of News Limited.

As I noted on the weekend, I think newsagents should consider…

  1. Re-engage David Nery for a response.
  2. Talk with Worksafe and other state government OH&S bodies for an opinion.
  3. Talk with insurance companies to determine liability on the insured should an injury claim be made relating to this issue.
  4. Assemble a team of experts to research and guide a whole of industry response.  The team would include an appropriately skilled lawyer, OH&S expert, medical expert, a newspaper deliverer and a newsagent.
  5. Discuss with the federal government funding opportunities to help newsagents pay for the necessary research and advice in navigating such a complex issue.
  6. Set a timeline for progress on this.
  7. Seek agreement from News Limited to engage nationally given that they are dealing with it internally nationally.
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Newsagency challenges

Newsagents should research the total cost of giving up the newspaper run

Despite the recent increases in newspaper home delivery fees, I have heard from newsagents contemplating giving up their newspaper distribution runs. In a couple of cases I have looked at this week, the new fees still do not get the run to a break-even point.

I have advised several newsagents recently consider not giving up their runs since in their particular circumstances they would most likely miss the customer traffic and revenue from their lucrative sub agent business.

While the home delivery side of a newspaper run may be loss-making, in-store traffic to pay accounts and otherwise engage in run related activity and or sub agent business can make the overall distribution business profitable or least break even.

The home delivery database can be used to drive traffic through email and print newsletters as some newsagents already do with tremendous success.

Five or six reasonable size sub agents, nurtured and cultivated, can provide an excellent return for the time invested.

It is important to carefully do the numbers before giving up the distribution business. Have them checked over to ensure that you have covered all bases in your analysis. It may be that keeping the run is better for the business. You’d want to find this out before you make the move.

I know I have written here before about the downside of newspaper home delivery. My point with this post is to reinforce that each newsagency is different and that care needs to be taken to assess all factors before you make the decision for your business.  As one newsagent has found out recently, a year after giving up the run, poor research can lead to a decision which hurts the business.

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Newsagency management

Newspaper publisher gives and then (by stealth) takes

Coinciding with the recent newspaper home delivery fee changes announced by the Herald and Weekly Times is an adjustment to what constitutes late delivery of newspapers to distribution newsagents.

This adjustment means, I am told, that newsagents are now less likely to be compensated for late newspapers, that newsagents will have to carry more cost themselves for late newspapers. The costs can run at over $100 an hour depending on the size of the business. This is a considerable sum for a small business with slim (newspaper publisher controlled) margins.

If what I have heard is accurate, newsagents will be frustrated at being given a boost with one hand while the other hand takes money off the table. The new terms for the late payment fee means it will be paid less than previously.

Publishers need to be commercially responsible for late delivery of newspapers. Given their zero tolerance approach to services provided by newsagents it is only fair that newsagents have a zero tolerance flowing the other way.

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newspaper home delivery

Variation in newspaper home delivery fees

It is interesting to see the variation in newspaper home delivery fees just approved by News Limited:

  • QLD:  A 17% increase in newspaper home delivery fees and the knock-on effect of a long overdue cover price increase by 10%.
  • NSW: 25% increase in 7-day newspaper home delivery fee.
  • VIC: 20% (approx.) increase in seven days delivery fee; $0.55 postage fee permitted on mailed accounts.
  • TAS: No change for interstate newspapers (important for some newsagents); approx. 20% increase in home delivery remuneration.
  • SA: Country Newsagents: increase of up to $1 per week per account plus a $1.50 per invoice fee and a $3.00 fee for late payment.
  • WA: The Sunday Times delivery fee increases 5 cents.
  • NT: No increase at this time.

I wonder if the News Limited executives setting these pay rates for newsagents would have accepted the same level of increases newsagents have achieved over the last, say, ten years.  I’d also be interested in researching what a News Limited employee gets paid for an equivalent unit of work to delivering a newspaper every day.

As for the variation, it is intriguing.  While there will be argument that it reflects different conditions, I’d suggest that in most rural and regional areas the conditions are quite similar.

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Newsagency challenges

Newspaper and magazine publishers should work together

Australian newsagents are being held back by newspaper and magazine publishers not working together on a single IT pipeline with newsagents.  The handling of the price change for Best Bets last week is a good example of how relying on a manual process can cost money and time for newsagents.

Newspaper publishers were going to operate with XchangeIT when it first launched years ago.  Negotiations had gone on for some time and an agreement had been negotiated.  Unfortunately, they pulled out the day before the official launch.  I did not agree with their reasoning then.  Today, years on, newsagents have missed out, newspaper publishers let us down by not enabling us to access greater efficiency.  No, having to go to a website is not efficient for us.

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Newsagency challenges

NSW newsagents win home delivey fee increase

NSW newsagents have been granted an increase by News Ltd’s Nationwide News of 4 cents a day for delivering newspapers over two or more days a week.  A delivery only on one day a week to an address does not attract any increase.  A seven day delivery achieves a 25% increase in the delivery fee.

The new fees take effect from April 12 and are being announced to newsagents today.

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newspaper home delivery

Newspaper home delivery becoming too expensive

I have heard of more newsagents being visited by Fair Work Australia representatives and guided to adjust employment arrangements for newspaper delivery drivers.  The changes have led to annual cost increases of between $15,000 and $35,000.  To add this level of cost to an already marginal operation will kill some businesses and hurt the working families the government says it is so concerned about.

Despite words by the federal government that there are mechanisms for dealing with some of the issues, I don’t see the government proactively working with newsagents on this.  Instead, they are sending inspectors to visit newsagents and other businesses to enforce the regulations.

The silence from newsagents about the challenges around the employment changes is concerning.   My blog post of March 15 on this topic has generated plenty of behind the scenes discussion but little public comment.

Newsagents are scared. I know that some in some newsagents associations are scared too.  I have heard that some representing newsagents believe that this issue should not be discussed publicly.  The trouble is, lack of discussion is leaving newsagents to break the law.

While newsagents need to ensure that they operate within the law, they also need to engage on a co-ordinated campaign to lobby the federal government on the personal and economic impact of the legislation of working families – a term they love to use.  This legislation is leaving many working families worse off – newsagents and employees.

Newsagents can use their geographic footprint to lobby on this.  But for that to happen they need a strong national plan and they need to work together.

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Newsagency challenges

Is the federal government killing off newspaper home delivery?

Newsagents are just starting to understand the implications of the new employment rules introduced by the federal government at the start of this year.

In addition to an increase to minimum length shifts, there are other changes which I am told significantly add to newsagency costs, especially in the slim margin area of newspaper home delivery.

In one case for which I have considerable data comparing wages and other costs for a full year, the newsagent is facing an increase thsi year in home delivery expenses of $85,000. Such an increase, if accurate, is unsustainable for this business.

Newsagents have little capacity to absorb cost increases in their home delivery businesses. They do not control the price of what they sell nor do they control the fee they charge for the service as these are set by newspaper publishers.

Newsagents made good strides in the 1990s on operational efficiency. There are not many additional gains to be made in this area.

So, with no opportunity to increase prices and limited opportunities to cut costs, newsagents will have no choice but to absorb and cost increase caused by the federal government changes.

Unless newsagents achieve concessions from the federal government or fair Work Australia, the only option is for newsagents themselves to work more hours in the newspaper delivery business since they will not be constrained by minimum shift times and the requirement to pay the higher per kilometre fees. This would take newsagents away from developing the business and spending time with their family. I wonder if the government thought through the implications of the changes.

Changing workplace conditions is complex and fraught with danger as both sides of politics in this country will know from what has happened over the last four years.

The latest changes are not good for newsagents. If allowed to stand without adjustment or relief, thousands of working families will be worse off. The economic knock-on effect will be considerable.

Newsagents need to organise themselves on this issue and consider using the considerable contact they have with Australians every week to get their message out to voters.
I sold my distribution business a few years ago. If I were affected today I’d be in contact with a raft of politicians and I’d be running a campaign to let my customers know how my small and local business has been hurt by poor policy work.

A footnote to this issue is the new newspaper distribution contracts many newsagents have just signed. Had newsagents been fully aware of the labour changes, I suspect more would not have signed. Some newsagents wonder about the timing of the contracts.

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Newsagency challenges

Biggest Loser pedometers a hit

pedometer.JPGThe Biggest Loser Couples pedometer giveaway with the herald Sun went well for us in most newsagencies I am connected with. At our Forest Hill store we received plenty of pedometers and didn’t run out until late in the day. We had plenty of happy customers and happy people dropping in to pick up their pedometer only.

We were not so happy at one other newsagency where we received 30 pedometers for 74 newspapers (we actually didn’t get any and had to go to the distribution newsagent to collect them) and ran out in no time at all. In this instance, the problem is with the distribution newsagent and the publisher.

Complaints aside, I like these promotions with newspapers. What is needed is a fix for the distribution issues we have covered here in recent weeks. I see this as much a publisher as a distribution newsagent issue.

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newspaper home delivery

Is newsagent privacy being breached?

I have heard from several newsagents that their neighbouring newsagents have allegedly been told by publisher representatives that they have signed new newspaper home delivery contracts.  The allegation is that this information has been put in terms of well they have signed, you should too.  It has also been used to say, if you don’t sign they can take your territory and give it to them.

While I cannot verify if the allegation is true, I’d note that three separate (and unconnected) newsagents have shared their stories with me.  I cannot imagine any publisher condoning such activity.

If true, such a disclosure about someone else signing a contract would be a breach of privacy.  The challenge is how do you act on this?

The stress around the new contracts is not yet over for some newsagents.

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Newsagency challenges

Newsagents negotiate with News Ltd over newspaper contracts

I have heard from a number of newsagents that News Limited moved ground last week on the new contracts on an effort to get newsagents to change their minds and sign.

I am told the change in approach became necessary given the considerable number of newsagents who had not signed the new contracts.  I’m also told that most of those applying to take over delivery runs were not appropriate to News Ltd needs.

The contract variations I have head about include:

  • Three month opt out clause.  Newsagents to have the right to opt out for any reason within three months of signing.
  • Elimination of unprofitable territory areas.  Some newsagents have finally been successful in eliminating unprofitable parts of their territories.
  • Additional weekly payment from News.  Some newsagents have negotiated a fee as high as $100 a week on top of other fees in return for signing the new contracts.  It appears that the fee size relates to the profitability of the run.

These and other benefits negotiated individually by newsagents demonstrate that News is prepared to move in order to keep good newsagents in place.   It also shows what newsagents can achieve when they work together.

The meeting organised by South Australia newsagents prior to Christmas has been crucial in achieving a more equitable outcome for newsagents.

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newspaper home delivery

News Corp. and advertising

Jeff Jarvis has written an excellent post about News Corp. and advertising at his BuzzMachine blog.

So I think we’re seeing News Corp. milk the dying cash cow. Newspapers aren’t going to grow and will shrivel and sometimes die. The value of local stations is only going to shrink. (MySpace was a mistake.) So News Corp. is begging for cash wherever it can get it — from readers online or viewers on cable (via cable companies’ billing) — no matter that there’s no strategy there.

Australian newsagents are wrestling with the new take it or leave it newspaper distribution and retail contracts from News Ltd.  In the documentation accompanying the contracts, News makes it clear that it is reviewing its newspaper model in Australia.  This review is about News and its costs and revenue requirements. It is not about newsagents.

Given that a review is under way, newsagents could argue, in a court or some other appropriate forum, that it would be more appropriate to extend the current contracts than to sign these new non-negotiable contracts which weaken the position of newsagents.

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Newsagency challenges
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