Newspapers

Some newspaper publishers don’t make easy for newsagents to manage the home delivery process. While News Ltd and Fairfax (belatedly) gave newsagents warning, some rural publishers only announced their plans Easter late yesterday – leaving their newsagents scrambling to get IT systems adjusted at less than 24 hours notice.

The time wasted making these last minute adjustments and printing new one off delivery run lists takes newsagents away from managing Easter trade. And publishers wonder why newsagents don’t comply with their requests.

On an average week newsagents receive between thirty and fifty important communications from suppliers which require action. This is on top of usual communications. Throw last minute notice about handling Easter into the mix and no wonder some newspapers don’t get delivered.

Publishers need to streamline how they communicate with newsagents. Newsagents ought to demand this. The current approach sets newsagents up to fail.

Last year I proposed something I called One Calendar – a common calendar based interface between suppliers and newsagents. Only one supplier put their hand up as interested even though it would have worked with all IT systems and offered an each IT interface between suppliers and newsagent computer systems.

It seems to me that some suppliers prefer to keep newsagents beavering away with archaic business practices.

RealMoney.com commentator Jim Cramersays that lack of financial acumen is burning newspapers:

All of these companies seem to be run, frankly, by jokers or dreamers who had no idea how to deploy capital.

These are diminishing assets. They don’t need to exist. Younger people rarely read them. And the companies acted like they would always be in demand and were simply misunderstood by Wall Street. Nope, Wall Street got it the whole time, except a couple of hedge and mutual funds that are trapped and trying to get managements to do something to bring out value.

No misunderstanding where he stands.

The original consent granted for the distribution of mX, the free daily newspaper from News Ltd, in Sydney was for eighteen months. News’ subsidiary Nationwide News has applied to the Sydney Council seeking to modify the development consent to sixty months. Check out the documents available at the City of Sydney website. They list distribution points including newsagent kiosks. The documents make for interesting reading for anyone curious about the distribution of free daily newspapers.

A letter from News’ planning consultants notes that during the current period of consent Council has advised News of only one complaint and that related to litter at one location which was corrected. I am surprised that there have not been more complaints about litter on trains, buses or ferries.

Readers tell me that mX serves its mission well. I don’t find it satisfying but I am not in their demographic. My interest is more in the impact that mX and or any other free daily newspaper might have on newspaper sales in newsagencies, especially given that the same publisher dominates the paid and free channels.

Scott Karp has an excellent post, Reinventing The News Business Requires A Little Imagination, in which he discusses the idea of people paying for newspaper classifieds as a means of supporting local journalism.

Karp’s article is an important contribution to the debate about the future of newspapers and even journalism as we know it. Even if it does not resonate with you today, print it for future reference.

We’re around two years behind the US on this issue of the future of newspapers – insulated in part by strong home delivery penetration. The US situation will hit here and when it does we will be ‘surprised’.

Easter is ten days away and still no word from Fairfax about bumper editions for their newspapers. They usually do them but unfortunately they leave the advice until the last minute and rarely let the software companies know. So, to the calls we’re getting daily we say we don’t know. We have asked Fairfax but so far have not heard back.

This is an important issue because it can alter how newsagents process home delivery and sub agent accounts and manage distribution. The greater the heads-up the better the newsagent is able to manage the situation.

So, here we have newsagents wanting to better serve the needs of their supplier and lack f communication denies them that opportunity.

We, at my software company, need a heads-up so we can create a bumper edition advice sheet specific to dates etc.

Beth Lawton has posted a list of essays on ‘how to save newspapers’ and ‘why print isn’t dying’ at the Digital Edge (Newspaper Association of America). The list is well worth reading as it provides balance and perspective to the queston over the future of the newspaper. Mark Glaser’s essay at MediaShift and Robert’s Kuttner’s essay at the Columbia Journalism Review both make valuable contributions to the topic and crystallise the discussion – journalism has a future even if paid for print product is challenged.

Here’s the front page of The Herald, a Hunter Valley based newspaper, with a stuck on ad for independents.

Is there no end to this stuck on ad craze.

From today’s Sydney Morning Herald demonstrating that ad revenue is more important than the brand to Fairfax.

Photo courtesy of Jarryd Moore – a commenter on this blog.

Independent newspaper analyst John Morton and media economist Miles Groves have announced they will cease publication of their well-respected Morton-Groves Newspaper Newsletter. Forbes has the story including this quote from Groves writing in the final issue:

Instead of making the technology, personnel, marketing and product investments critical for success, industry leaders have accepted that desirable circulation levels are not sustainable and circulation declines are inevitable.

Many working with newsagents would not want news like this to be reported. My view is that the sooner newsagents accept that fundamental and far reaching change is impacting their core business the better. The change is an opportunity.

Checkout this 5 minute video by vlogger Danwei about newsstands, newspapers and magaiznes in China. Fascinating.

I’m told the Sydney Morning Herald today had a post it note type ad stuck across the masthead saying Don’t risk Debnam. 20,000 job costs to public services. Workplace laws to Canberra. Similar to the pitch at the SMH website (see above). Whacking a post it type ad on the front of the paper like this – for the State election this weekend – over the masthead really pushes the envelope in terms of brand damage. It politicizes the newspaper more than a traditional print ad.

It is six months since we sold our newspaper home delivery business. Time has shown this to be a wise decision for us.

We have eliminated the weekly loss generated by the home delivery business, freed up employees by not having to fix mistakes and lost newspapers, eased management effort by eliminating four employees and benefited by specialising in retail as opposed to splitting our attention. We have also eliminated some over the counter frustration.

Prior to the decision to sell, we had sought for some time to acquire other runs so we could grow a profitable distribution business. We had just over 600 home delivery customers but not all were seven days. Our financial modeling suggested that we needed around 1,200 with better than average street penetration to make the home delivery model viable.

Since we were unsuccessful in acquisition, selling was something we considered. For a year we thought about but could not bring ourselves to disconnect from the core newsagent function of newspaper home delivery. It was like we expected the world to end when we sold the run.

Selling the run did not bring our world to an end. The opposite has happened. Our retail business has flourished. Our old delivery customers still shop with us. None complain about the change in service provider. We’re better off and our customers are better off.

Given what I see as an inexorable march toward lower margin home delivery business I am glad to not have to balance the competing needs of home delivery and retail. I am sure that both will prosper but more as separate businesses than we have seen in the past.

I was surprised to see this stack of the free daily newspaper mX in front of a newsagency in Sydney this afternoon. There was another stack right in front of the newspapers. Some newsagents have asked me whether newsagents are involved in distributing the free papers. Based on this I’d say yes, some are. I’m not sure of the financial arrangements but I would expect something to be flowing back to the newsagent.

I was fascinated by the energy of some of the mX distribution folk, particularly down by circular quay. I saw one hand out 50 copies in a minute – he was really enjoying his job. Admittedly it was peak hour but 50 is great going. Even the best people I saw in London last year didn’t get close to that.

My office is not in the city and I have not seen the mX distribution process first hand until today. This afternoon was an eye-opener. Many commuters really do want want their free paper. mX is clearly well established in Sydney. One surprise, however, was lack of distribution points at the major bus stops I saw. There were over 100 people and no mX copies in sight.

I was in a petrol outlet this morning when a customer came in and asked if they had the AFL cards with today’s Herald Sun. The owner told the customer they had to go to the newsagent. The customer put the newspaper down and walked out. The owner then said to me that these newspaper promotions were “a waste of money”.

My takeaway was that newspapers are a distraction for this chap. He’s clearly frustrated with the product. His is a petrol outlet after all.

Publishers in their push to get into more retail outlets see their product treated as a poor cousin to the main product and while they may still get some impulse purchases, it is with the brand supporting promotions where they miss out.

Check out the American Express ad stuck on the masthead of The Age today and see another example of revenue coming before the brand.

I am astounded that this placement passed quality control. While Fairfax bean counters may like the dollars, the editorial team must wonder where this will end.

Check out the National Distribution Monitor webiste to see how wholesalers and retailers transparently handle newspaper delivery times. It was created as part of a strategy to improve newspaper delivery times, thereby enabling retailers to maximise sales. For those involved in negotiating supply issues with publishers around Australia, the UK website model could be worth considering. Newsagents often complain about the high cost to their distribution businesses of late newspapers.

I could be way off the mark with this but on a flight from Brisbane to Melbourne tonight many of the passengers walked on with a copy of mX, the free daily newspaper launched by News Ltd in Brisbane yesterday. I didn’t notice it anywhere in the airport but I was not looking. I don’t recall ever seeing anyone flying out of Melbourne or Sydney with mX. If they are distributing from the airport it’s a significant change.

Talk about in your face advertising. Here’s another ad stuck on the masthead of The Age today.

The rumor put to me today is that Australia will have its first suburban free daily newspaper by the end of this year. I’ve been told to expect a newspaper which is mX like but for an older demographic, something which takes a statewide or national view of issues as opposed to what we see in suburban newspapers today.

I’m suspicious of the rumor as it would go against the trend of newspapers – but then there is the US model seeing hundreds of thousands of newspapers delivered daily to ‘subscribers’.

Whether the rumor is true or not, new newspaper models need to be discussed and debated by newsagents.

I missed the launch last year of G24, PDF versions of the Guardian newspaper by section. What I like about G24 is that it is always up to date since it is compiled automatically as news is published, layout is good and I can select the sections which interest me and therefore manage the download size. As a consumer I also like that it is free.

Given the anecdotal yet important evidence emerging from London about the impact of their free newspapers on paid circulation in that city, it would be appropriate for a study to be undertaken in Melbourne and Sydney to determine the impact of MX on paid sales – especially if rumors of extensions to the circulation reach in these cities are true.