A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Newsagents as entrepreneurs

Steve Outing in his Stop The Presses column at Editor and Publisher yesterday grades newspaper websites. Ahead of the article itself is this introduction:

Just about everyone — finally — is on board and working to address the big problem: How to transition a significant part of the newspaper business to online and new media while keeping enough money flowing in during the transition period to fund quality journalism, and prevent newspapers from entering a downward spiral. So how’s this going?

Newsagents need to read this and understand what is being said. Newspapers are transitioning revenue. This means newsagents must transition revenue as well.

Outing’s article rates newspaper sites and, overall, says newspaper publishers are not doing enough to drive the transition. He opens his conclusion with:

With all the hand-wringing in the industry about how to cope — and the acceptance at the corporate level that big changes are required right now to address the challenges faced by newspapers — I’m surprised in looking at today’s state of the newspaper website that the changes aren’t more dramatic.

At least newspaper publishers have started. Newsagents have not. Our shopfits continue to be the same, the supply model of newspapers and magazines is the same, our product mix is the same, the earnings multiple for purchase is the same. Newsagents are not embracing change. They are waiting for someone else to deliver the changes to them.

The biggest transition newsagents face is that of moving from being a servant to being an entrepreneur. Some have done this with excellent success. Most have not.

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Newsagency challenges

Yes, Sir Humphrey is working for the Government!

Further to my earlier comments about Australia Post, I received this letter yesterday from an Assistant Advisor to Senator Coonan, the Minister responsible for Australia Post. The adviser has not read my letter and considered my concerns. This letter is similar to others I have seen out of the Minister’s office on the same topic. For example, I have a letter sent by Senator Coonan to a colleague in Parliament with almost identical wording. Again, no attempt to consider the problem as something which Government policy has created and fostered.

Australia Post is creeping closer to being a newsagency in its Government owned stores. It is abusing the Act, with permission from the Government, and taking revenue from newsagencies like mine which directly compete with a Government owned and operated shop. Right now we are going head to head on calendars, cards, printer ink, gifts, stationery and a range of other smaller items. Every day this continues is another day the Government demonstrates disinterest in small business.

Read the letter and see Sir Humphrey at work.

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Australia Post

Free personals site launched

3loves.JPGWe have launched 3Loves, a free online personals and dating site as one of three social media sites which will support our Find It online classifieds model. Our research has shown that reasonable interaction with a personals site costs in the order of $30.00 a month. At 3Loves we want people interesting in making friends and finding dating opportunities to put away their credit cards – because we believe in free love.

Click here to see a map of the newsagents behind Find It. They earn commission from payments and from advertisers they bring to the site.

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Online classifieds

Logjam at the newsagent counter

Over the last three years newsagents have dramatically increased services offered at the counter, adding bill payment, money transfer, phone recharge and calling card sale to the more traditional newspaper account payment. Each involves technology. Some require customers to make decisions which often take longer than the commission is worth – calling cards are a good example of this. While providing these services is an important traffic generator for newsagents, we risk tarnishing our image of excellent customer service. Slow and out of date IT interfaces by some suppliers are delaying simple transactions such as sales of magazines, newspapers and greeting cards.

Newsagents need to demand that systems used and systems with which newsagents interface are state of the art. Not all current systems are – they cause traffic problems at the counter and disadvantage newsagents and their customers.

If the services part of our business is to grow, and it needs to, we need our suppliers to provide better IT links which reduce the technology at the counter rather than make it worse. To see our suppliers deliver better technology to our competitors ahead of the newsagent network is disappointing.

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Newsagency challenges

Worker injury risk with heavy newspapers

Further to my post, Overweight newspapers make for unsafe work practices according to OH&S study, two delivery drivers for newspaper publishers have contacted me about their concerns with overweight newspapers. Once has commented at the above entry. I’ve also heard from several newsagents, one of whom told me about a driver who went on sick leave last week with shoulder injuries. The problem with the weight of newspapers is not new. What is new is that there is now a respected report which provides evidence and demands action.

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Newspapers

Fat magazine packs cause a real-estate problem

drift.JPGThis month we cannot fir our usual seven copies of Drift into our magazine fixturing. The publisher has created a triple pack – I guess to make their offer more enticing. As the photo shows I can fit three of the triple packs into a usual magazine pocket. I have to jam the other four into another pocket. This costs me an extra $3.50 in real-estate for the month and while that will not break the back, based on sales of this title, the decision by the publisher wipes out the profit I would have made based on usual sales. It also means I have to take the pocket from another title or, horror, double up titles. The alternative is to put the extra copies of Drift in the back room and pull them out one there is room, however, the labour involved in that approach would be worse than taking the extra pocket.

Magazine publishers and distributors need to understand the problems these triple and double packs cause retailers.

Newsagents need to be more business-like in terms of labour and real-estate. They (we) ought to change the magazine model, and charge for space used by title selling fewer than, say, twenty copies and or selling less than 50% of the product received. In the current model we take everything suppliers and invest our time and real-estate. For titles outside the top 200, the return is all too often nil. It is only once we take control of our space that we will become competitive in the magazine space.

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magazines

Taking my customers from me

As a retail only newsagent now I don’t like the post-it note ad on the front of The Age today luring customers to get the newspaper home delivered. There’s nothing in that for me. If the folks at The Age want me to engage in in-store promotions to drive over the counter sales, they need to NOT undercut me in this way. What they are doing is disrespectful to all newsagents – delivery newsagents make less from a subscription delivery than they make from an over the counter sale. The retail channel is important to publishers – taking sales out of retail weakens the channel, leaving what? Not much.

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The stuck on ad covered a promotion for a feature. Surely there are arguments going on within Fairfax about these stuck on ads?

I note that not all Ages in Melbourne had the ad. In two newsagencies I saw product without the ad whereas in mine and a convenience store the ads were in place.

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Newsagency challenges

Reclaiming the magazine specialist title

If newsagents are to maintain (reclaim?) the title of magazine specialists we need to bring our magazine displays up to current standards. While our competitors display full face in most cases, we continue to hide attractive covers in our fixturing. This will only hurt sales.

aww_christmas2.JPGHere’s the view of this month’s Women’s Weekly from a customer perspective in traditional newsagent racking.

Barely the top third of the title is on display. While you can see what the magazine is, the key value propositions are lost. Browsers are not as enticed as they could be and this affects impulse purchases.

aww_christmas.JPGHere’s the full cover of the magazine. Now you can see that it’s Bindy Irwin on the cover and that the magazine comes with a free CD of Christmas music. Both reasons to display the full cover and not the top third.

We are doing high volume titles like Women’s Weekly a disservice by using racking systems which are years out of date.

Shop designers and fitters are doing newsagents a disservice by continuing with such out of date racking systems. They need to lift their game and help newsagents lift theirs.

We carry too many titles to full face display all. What I am planning is to introduce full face racking for the top 25 titles at the counter and a further 250 titles at the high traffic entrance to the magazine area. The rest of the magazines will be displayed in racking which is a step ahead of current racking. The cost of this partial refit will be in the order of $35,000. That’s a high price with magazines generating 25% GP but worth it if I am to be the magazine specialists in the area.

A consequence of bringing magazine display into today’s standards is a cut in the space allocation.

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magazines

New Idea beats Woman’s Day?

This week’s New Idea hit the shelves three days early – Friday last week – with the Belinda Emmett feature. Woman’s Day came out as usual on Monday with a similar feature. The three days have made a difference in my newsagency and others I have spoken with – New Idea is ahead of average weekly sales by 20% and Woman’s Day behind by 15%.

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marketing

Newspaper future?

Thanks to Jeff Jarvis’ BuzzMachine I read this article by Michael Hirschorn writing at The Atlantic. He tells it how it is for newspapers and lays out a future for journalism. It’s good seeing a newspaper publisher give space to his balanced view. Here is someone from the inside acknowledging that newspapers as we know them are fading yet outlining how the future can be bright. Now, how do we get newsagents to engage with this?

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Newspapers

The masthead ad addiction

Another day, another post-it type ad on the masthead of The Age. What is odd is that not all copies of The Age in Melbourne yesterday had this ad. I wonder if they are targeting certain areas?

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Here’s today’s ad. Three this week. It will take more than 12 steps to break this addiction. I note that a work colleague bought The Age elsewhere and his copy did not have the post-it ad. More geographic targeting?

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I bought this copy at a 7-eleven. As I was leaving I realised there was a free magazine which was not inserted. I went back to the paper stand and hunted around. There it was upside down on the floor. I know that by 7am in newsagencies across Melbourne the Melbourne Magazine will be either well displayed next to the newspaper or already inserted. The 7-eleven counter person asked what the magazine was – thinking I was stealing something.

Publishers need to understand the value newsagents bring to the table through better compliance and service. Newsagents need to be loud and proud of their service levels rather than bowing to publishers all the time.

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Newsagency challenges

Bits from the Media & Broadcasting Congress

The two day Congress in Sydney earlier this week was worthwhile beyond what I have already covered. Here are some of the other highlights as I saw them:

Magazines and the Internet: Patsy Keegan of Vanishing Point Media reinforced how important an online strategy is for magazines. She made sense talking about how successful titles use the Internet to engage with readers. Good local example: Girlfriend – brilliant reader engagement.

Old media adapting to Internet opportunities: Rohan Lund, Director, Digital Media and Strategic Investments, Seven Network took us behind the scenes on how Seven has embraced Yahoo! and embedded Yahoo! people with TV shows and magazines to create a more valuable relationship. The Yahoo! Side of things is providing a level of engagement that a pure broadcaster cannot achieve.

Today’s media Company: Tony Faure, CEO, ninemsn was opening keynote for the conference and set the tone. The world has changed. Media companies are not what they used to be. Those in the media need to adapt. This is an era of engagement and personalisation. Of course, the newspaper folks who followed Tony – see earlier blog entry – weren’t listening.

See the theme – engagement. We have engagement in newsagencies with every customer contact. However, few of us really engage – certainly not in a way which is comparable to the liberating engagement of a good website.

The biggest highlight of the Congress, from a small business perspective, is the opportunity to listen to representatives from suppliers and major media companies talk in broad terms about the new world and do some naval gazing about that. Back in my newsagency this morning dealing grass roots issues, it’s easy to forget the lofty ideas swirling around my head during the Congress. Day to day newsagents have little time for naval gazing and business planning. Their twelve to sixteen hour days are overcommitted with heavy labour, customer service, accounting, dealing with reps who are always ‘dropping in’, putting up displays, taking down displays, putting out new stock, processing returns … and so on. Back in they day they had more employees to do this work. As wages, rent and competition increased, newsagents kept busy and have not modified their businesses to address these very issues. Now, newsagents face, in my view, a tsunami. Newsagents and those who lead them need some serious naval gazing time to plan for the future – but they better hurry because the future will be here sooner than they think.

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Newsagency challenges

Borat viral campaign at YouTube

borat.jpgClick on the image to play the first viral ad we have loaded at YouTube to promote our Find It online classifieds site. We’re planning several ads to get people visiting our site during its beta phase. The Borat ad was made completely in house. Given that we don’t have the budget of News, Fairfax, PBL or Telstra, we have to find more creative ways to get people engaging with our offering. We hope to launch our second ad mid next week.

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Uncategorized

Find It online classifieds re-design launched

findit_logo.JPGWe have launched a new design for our Find It online classifieds model. The new design is very web 2.0. Clean. Easy to navigate. Easy on the eye. All ads are currently free as we are in beta. When we do charge in three months time more than 60% of our categories will remain free. For example, most of what is listed on eBay will always be free at Find It and these free ads can include photos, video and sound – free too.

Newsagents are our partners and will be our only retail payment point. More than 1,000 newsagents are part of the Find It network. This week they are handing our 500,000 bookmarks as part of our promotion of Find It.

This is a David vs. Goliath challenge. We’re small and have little content to offer. Our success will depend in part on how much newsagents engage and promote Find It to their customers to attract content.

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Online classifieds

Citizen journalism Australian style

FPC has Village Voice and created what they claim is “a one-stop-shop for local community information and a unique forum for citizen journalism”.
The key is engagement. In the US and Europe there has been more success at citizen engagement initiatives. Here in Australia we’re slower to engage. Their approach to getting the stories from readers online is old – I’ve seen sites in the US far more advanced. Likewise with free classifieds. It seems simple is free and complex (?) is not. Those issues aside, Village Voice is a welcome initiative in the changing media offering.

I’d like to see newsagents play a role in facilitating citizen engagement with news outlets – our network of stores could become soapbox points where people submit stories, photos etc for inclusion in sites like Village Voice.

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Newsagency challenges

YouTube – unedited, unfiltered, raw – news

Two recent clips at YouTube demonstrate the power of this medium above more filtered news outlets. First up is the video of the Michael Richards’ (AKA Kramer on Seinfeld) racial dummy spit. Then there is the video of an Iranian-American U.S. citizen being repeatedly tazered by security officers at UCLA. The Richards video achieved over 500,000 viewings in 24 hours and the tazer footage achieved 425,000 viewings in 6 days. In both cases YouTube viewers see the story as it happened. They don’t rely on filtering by journalists and editors. While such filtering can be appropriate in many instances, with these two stories the video is better than any reporting. I want to see the raw material so I can make up my own mind with stories like these.

That such footage is so readily available is educating a generation to trust unedited content rather than the masthead. This is a challenge for mainstream media and all who rely on it for income.

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Uncategorized

Newspapers and their future – a round table discussion

Eric Beecher, CEO of Crikey, Peter Lynch, Executive Editor, Editorial and Business development at Fairfax and Tony Hale, CEO of The Newspaper Works participated in a round table at the Media and Broadcasting Congress in Sydney yesterday. It was 2 against 1 as Lynch and Hale spun and denied for their masters about the impact of the Internet and mobile technology on newspapers and Beecher draw our attention to the move of advertising revenue away from newspapers and online, that newspapers are bleeding classified revenue and that this is their lifeblood. The audience was clearly with him on this – most were from the online space. While neither Lynch or Hale addressed the classified problem, Hale did counter with “Classifieds are moving online at the speed of a receding glacier”. Hmmm Not the best analogy. Hale talked up free newspapers and Lynch even hinted that Fairfax could play (again) in this space.

Beecher made the point several times that he likes newspapers and good journalism. His core concern is that newspaper publishers are in denial. Based on yesterday’s performance in the round table I’d agree. Lynch and Hale ignored the big issues and would have us believe that it is business as usual. The investments of their parent companies tell a different story. I would have thought that if newspapers were as valued by consumers as Lynch and Hale suggest, then the cover prices ought to reflect the added value. Instead, the cover price is used to restrict revenue share and to ensure consumers don’t have a reason to reconsider their habit.

Ten days ago at the newspaper conference I attended in Vienna I heard from newspaper publishers who would have laughed had they been listening to Lynch and Hale yesterday. In Vienna newspaper publishers were proud to talk about how they are pursuing revenue online and with free models to deliver the revenue necessary to fund good journalism. Many said the product as we know it today has no future.

Newsagents reading this should be concerned about the future of their current business model. Not next year and probably not in 2008, but soon, newspaper sales will fall. Just as publishers rely on classified revenue to fund other parts of their business, newsagents rely on newspapers for traffic, they are central to what a newsagency is. The fall in newspaper sales will bring about changes in the distribution model which will affect our businesses. This is why we need to listen to people like Eric Beecher – his newspaper editorial and management background make him well qualified to observe and comment. We need to be better informed about what lies ahead so that our business plans today can reflect a more truthful view of the future.

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Newspaper marketing

Newspaper publishers poorly represented by their new body

newspaper_works

Newspapers are incredibly profitable enterprises.

Tony Hale, CEO of The Newspaper Works – a coalition of newspaper publishers created earlier this year to talk up newspapers – was speaking earlier today at the Media and Broadcasting Congress in Sydney. In his speech, Hale flippantly and without real context derided respected commentators including Jay Rosen and Michael Porter. An easy target was anyone talking down newspapers. Hale reminded us of Bill Gates’ prediction in the 1990s that newspaper and magazine publishers would close. He relied on Gates being wrong to ‘prove’ that today’s naysayers will also be wrong.

Hale took us through an amazing set of numbers covering circulation, readership and advertising. He left off cover price – I guess because in Australia we have seen below inflation rises. While Hale indicated that circulation growth came primarily from the free commuter dailies, he did not present data to address problem the migration of classifieds online. By not talking about this he ignored the elephant in the room.

Hale will need to lift his game if he is to get advertisers believing that newspapers have as bright a future as he suggests. Making fun of commentators may get some laughs but it will not address the impact of the Internet on the print product. While Australian publishers are dong well with their online models, significant costs in their businesses are tied to print and this will have to be addressed as sales of the print product in its present form decays.

As one who relies on newspapers for traffic and revenue for my businesses and for enjoyment to read, I would prefer Hale to take a smarter and, dare I say, more accurate, approach to talking up the medium – especially when speaking at a conference so focused on new media.

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Newspapers

Newspapers to become bit players in media shake-up?

Graeme Samuel, Chairman of the ACCC, delivered an interesting speech at the Broadcasting and Media Congress this morning looking at the flurry of changes in media ownership. Much of what he discussed was about distribution. He started talking about how it was (is?) with the newspaper landing on the doorstep but quickly moved to the smorgasbord of options we have today. He is right to observe that the “Internet has turned distribution on its ear”. He said Australia will get a faster broadband service. This will increase the pace of change. Toward the end of the speech, Graeme Samuel asked a question which goes to the heart of newsagent concerns – “How relevant will it be to have two major newspaper publishers?” While he was talking in the context of media regulation and ownership changes, my interest was more one of how much the question sounds like game over for newspapers – certainly in terms of diversity and relevance.

It’s another reason newsagents need to plan today for this world where newspapers are not the habit they are today. Newsagents need to sit at the table with newspaper publishers with this perspective of a dramatically changed world and to have business plans which pursue traffic and margin outside the sale of newspapers (and magazines).

As Samuel told the audience this morning, the ACCC has published a discussion paper which provides guidance as to how future cross-media merger proposals might be assessed.

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Media disruption

Irish Echo – the worst newspaper

Irish Echo is the worst newspaper according to many newsagents. We lose money on this every week of the year bar one – the week of St Patrick’s Day. While it is supplied on a sale or return basis, Irish Echo takes up real-estate and requires labour – these are costs to newsagencies. Either newsagents need to be paid a handling fee or they are provided much better terms. The current situation disrespects newsagents.

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Newspapers

BRW mastheads confuse

brw.JPGBRW has two special issues and it’s weekly issue on sale at the moment and it’s confusing customers. In regular magazine fixturing it is impossible to tell the issues apart – hence the confusion among customers.

While full face display fixes this, few newsagents would have the space for a full face display of BRW nor could they justify this based on the cost of retail real-estate. Cover designed at BRW need to take this fixturing into account with future special editions.

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magazines

Ashes cricket pins soft

The folks at the Herald Sun have done a great job making sure newsagents have stock of the Ashes team pins. We were ready with a good process for handling back orders and advance orders. The expected rush didn’t happen. It’s been very well supported in the newspaper so who knows why this one has been soft with consumers. These things are hard to pick.

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Newspaper marketing