Newspapers

The American Journalism Review has an good article by Donna Shaw about ore advertising getting onto the front pages of newspapers.

Page-one ads may net premium prices, but they’re distasteful to many journalists who believe they violate the purity of page one and the sacred wall between news and business. From a design standpoint, they can detract from the flow and order of a page. They also eat up space that otherwise could be devoted to stories, particularly in an era of dwindling newsholes.

I wonder what Shaw would make of the post-it type ads which Fairfax sticks on their mastheads here in Australia. These stuck on ads are more intrusive than front page ads.

I spent an hour walking around the hotel early this morning and while I could not find a newsstand, I did find evidence of home delivery. These paper delivery boxes were on the gate to an embassy nearby. I am not aware of current use of newspaper delivery boxes in Australia but they were certainly a feature in the 1980s.

The newspapers I found o the street were at ‘fast food’ street stalls where people were reading a well thumbed shared paper from the stall operator.

I visited three petrol outlets – no newspapers or magazines and two 7-Eleven outlets – no newspapers or magazines.

While none of this is hard research or even culturally relevant to Australia, it is interesting to me in the context of the moves to get newspapers and magazines into more outlets in Australia.

A consequence of the flood two weeks ago was that we had to move things around in our shop including the newspaper stand. Sales picked up, customers found newspapers – even though it was moved only a metre and a half. There were no other changes.

It certainly supports the case for shifting products around regularly.

Melbourne Observer is a solid performing independent title in my newsagency. It’s customers are loyal, delivering good sales every week. This week there has been an excellent kick thanks to the 56 page tribute to radio man Keith McGowan. Take a look at sales in my newsagency over the first three on-sale days compared to the average for the last month:

While the Melbourne Observer would not be on the radar of many newspaper and magazine publishers, in my newsagency it is an important title because of the loyalty of its readers and the efficiency of the baskets in which it is purchased – rarely do people come in and purchase the Melbourne Observer and nothing else. It’s an example of an independent local title doing well.

Ash Long and the folks at Local Media, the publisher of Melbourne Observer, actively support and promote newsagencies and this is another reason I am happy to support the title.

I may be jumping at shadows on this but MX, the News Ltd free daily newspaper, seems to have evolved into more of a newspaper. The edition I picked up in Sydney this afternoon appears to have more local hard news than what I saw two months ago. It’s still a light read but feels like it has more substance than last time I checked. If I am right and there is more real news content I’d like to know if the Melbourne and Brisbane editions have evolved as well.

I could read today’s copy and pass fifteen minutes or so whereas other editions I have looked at kept me interested for a minute or two.

If this is a trend – to make MX more of a newspaper – then I’d say it makes sense. Even though as a newsagent I would have concerns, from a News Ltd perspective a more valued product will deliver better advertising results.

Today’s defiling of The Age masthead is brought to you by Virgin Money. The bean counters at Fairfax prefer money from Virgin over respecting the brand of their product is the stuck on ad placement is anything to go by.

What do you make of this? On the day Fairfax increases the cover price of the Sun-Herald to $1.80, News Ltd boldly advertises, above their masthead, a $1.00 home delivery offer for the Sunday Telegraph. The pitch to their readers is clear – DON’T BUY RETAIL. Hmm, yet they demand retail newsagents place their product in the best possible, and most expensive, position in-store.

From this amazing $1.00 deal, News is apparently paying newsagents no delivery fee for the first six months and half the usual delivery fee for the next six months if they renew – on top of 25% of the cover price. So, newsagents share the risk/costs of the promotion. It would be fairer if newsagents shared in the resulting upside of advertising revenue.

I appreciate that News Ltd needs to look out for itself first. Newsagents need to look out for themselves first. It’s unfortunate that newsagents get caught in the battle between publishers – we only make money from the cover price.

Last week I blogged about the growth in home delivery business consolidation in Victoria. This week there has been a spike in activity in New South Wales and Queensland. I’ve fielded eight calls in three days from newsagents wanting to talk about the implications of selling their territory and retaining their retail business.

It is a challenge running a home delivery, wholesale and retail business all in one. My own experience is that selling home delivery and wholesale focuses the mind in a very profitable way. Yes there are risks but they are less, in my view, that if you retain all three businesses in one. I know from the delivery side that delivery only specialists say the same thing – by eliminating retail from their businesses they reap better rewards from focusing only on distribution.

The experience in Victoria over the last three years will help newsagents in NSW and QLD.

The Chaser boys tonight on ABC TV stuck Fairfax CEO David Kirk with post it notes to make a point about the stuck on ads Fairfax has been running on its newspapers for months. Well done Chaser. I’d like to think that my obsessive blogging about this was their inspiration but I doubt they even know this blog exists. Kudos to the Chaser boys!

Thanks to Brett at newsXpress deception Bay for the tip.

In Townsville today and some newsagent colleagues told me about the Townsville Bulletin tipping competition. In many newsagencies it’s driving excellent sales with some customers purchase 20 and 30 copies of the newspaper to get the original entry forms.

Australian newsagents might spare a thought for New York newsstand colleagues. For years the News Corp. owned New York Post was 25 cants. Two weeks ago, having grown circulation by 50% over five years or so, the cover price was doubled. Two weeks on and with sales reportedly crashing, News has retreated to the 25 cent price point. Crains has an excellent story on what happened.

Newspaper publishers are on the record saying that cover price is not key to their overall revenue model. Cover price primarily funds the supply chain. Retail Newsagents rely on the cover price as their only source of revenue – cover price is crucial to us. That it has not kept pace with CPI over the last 10 years makes investing capital in newspaper fixtures challenging.

I hope we don’t experience New York like price wars here. If guess we do with some of the home delivery deals but, overall, newsagents are insulated from most of the discounting.

The advertising department at The Age continues to have more clout than the editorial department. Today we have a GIO post it type ad stuck over a pointer to a story about the maths crisis in schools.

When you remove the ad to read what’s underneath the text on the newsprint is removes as well.

In the bundles I checked today the GIO ad was folded over 50% of the time, making their message invisible unless you unfold the stuck on ad. I wonder if they have a make good clause in their advertising agreement.

The Age has another post it type stuck on ad. One in three of the ads I checked were folded as shown in the photo. Most were stuck partially over the coat of arms. Customers still complain about these ads.

Editors Weblog reports that Guardian Weekly, sold here, is shrinking from tabloid to half berliner format. While not a big deal if there are many size changes newsagents will need to look at fixtures as they are made for common formats.

Here’s the masthead of The Age today. Once again the money from the advertiser is more important than their brand.

Read what Roy Greenslade of The Guardian thinks. Read what Project Freesheet has to say – where the campaign started. They are collecting 1.5 million photographs of free newspapers to raise awareness about the issue of waste.

Several newsagents have contacted us saying that there will be supply problems with the Sydney Morning Herald in regional areas tomorrow as a result of industrial action at their Chullora plant. The timing would be unfortunate because of the launch of The Form tomorrow – the free racing newspaper with the SMH – it used to be part of the paper and is now separate.

UPDATE: There is a stop work tonight from 10pm and another planned for tomorrow afternoon – this could impact Saturday’s paper.

Victoria is a hive of activity as newsagents sell, licence or lease off their newspaper home delivery territories. By my reckoning there have been more deals in the first three months of this year than all of last year and even that is probably understating the situation. Some of the deals are long term newsagencies getting out of home delivery.

There are three types of deals: outright sale of the territory (as I did in my newsagency); contracting another party to undertake the physical delivery while you maintain the accounts; contracting and or licensing the entire delivery business including accounting for a fixed term. There are other variations but these three are the most common.

The most common reason newsagents cite for getting out of home delivery is that the economics no longer work for the average size newsagency. Given that the net return from delivering a newspaper has not increased in more than fifteen years and given that newsagents have few options for reducing costs there is no choice for many but to quit. It is only when an operator manages 2,500+ home deliveries a day out of a warehouse that they can start to make progress on their net return.

I’d be surprised if the newspaper publishers – Fairfax and News – are not concerned about this trend. As these distribution businesses become bigger and stronger they will be more demanding of the publishers. The publishers must also be concerned about their fading connect with retail newsagents. In fact, the situation is so dynamic at present that I would suggest it is time for a forum where newsagents openly discuss the various models. One was held over a year ago – the world has changed considerably since then.