I was speaking yesterday to a person who is trying to get newsagents to sell magazine subscriptions. What he offers the newsagent is a commission that is good for a virtual product. I then mentioned that newsagents are concerned, that this commission is much less than the profit that a newsagent would earn if a client buys the copies of a magazine in the shop. He replied that magazines bought on subscriptions are not really the same as those that sell in the newsagencies; so many newsagents could open themselves up to a new type of customers by selling magazine subscriptions.

After he left, I decided to investigate on the magshop

I looked around and saw their top ten listing. I then compared it to our benchmarking project for network products.

I then made this table.

Description---------------------Mag No------Newsagents
TOP GEAR-------------------------------1-------------64
AUST WOMENS WKLY-----------------2--------------9
WHEELS---------------------------------3-------------32
GOURMET TRAVELLR-------------------4------------142
SHOP TIL YOU DROP------------------5-------------36
COSMOPOLITAN-----------------------6-------------15
MONEY MAGAZINE---------------------7-------------43
CLEO-----------------------------------8-------------16
Australian GoodFood-------------------9--------------?
AUST PC USER-------------------------10-------------27

To explain the table

The top selling magazine in MAGshop.com.au is TOP GEAR; to newsagents from network it is the 64th best seller.

WHEELS ranks 3 in the MAGshop.com.au but in a newsagency it ranks 32.

MONEY MAGAZINE ranks 7 in the MAGshop.com.au but in a newsagency it ranks 43.

Australian GoodFood has a ? because it is new.

Overall these magazines make up about 6.3% of the newsagencies network magazine account. Of course there are many more magazines in MAGshop.com.au than just these, so you could probably double it.

But he is right when he said the typical subscriber is not buying the same magazines as the customers in the shop.

I looked in the newsagency-benchmarking project to see British Tobacco products. They have been falling dramatically. I then checked a tobacconist shop just to confirm and they are down 40% more then the average. Clearly, the public are reducing smoking. It must be a worry to many of our clients who need tobacco for example in Tasmania.

In addition, sales are falling in dramatic steps as newsagencies are moving out of cigarettes. In this publicity photo of a site at recent posbrowser, install in Victoria. Look at the background, behind the happy newsagents. You can see the space dedicated to tobacco products is tiny. The inkjets have taken over that space.

The top three sellers now in British tobacco in newsagencies are

HORIZON 50 BLUE
WINFIELD 25 S BLUE
WINFIELD 25 S GOLD

For many of my clients in Victoria, Tasmania, Northern Territory, ACT and though Golden Casket in Queensland Tattersall is very important.

What is good about following a public company is that they have to release their information. Clearly, Tattersall has not had a good year. I am glad I did not own any shares in them.

Unfortunately, like so many companies in the ASX, these report seems to be incomplete. For example, no mention of the growing competition from online gaming is barely mentioned. Now in the Northern Territory bookies, are turning over billions of dollars much of it I am sure is at their expense.

Also, they have so many interests that what we want in the report is buried in other figures. Considering Tattersall's importance to the industry, it is strange that an organisation like the ANF does not hire an analysist to go over these figures for us. I can assure you that Tattersall's do studies of newsagents. Like many large newsagent suppliers, they know more about newsagents than newsagents know about them. That is a big no in business.

From the report, you can see that Tattersall has suffered a huge loss to their business in Victoria and clearly they could lose more there. The move to Queensland looks like it has worked for them. I am not surprised as I know from my meetings with them, that they are good operators.

What also helped them this year was an amazing series of luck that gave them many jackpots!

Although we have no breakdown by state in the report, newsagency products have increased by 5%. Which in today's retail market is a good result? Unfortunately for us, it is unclear whether this increase was because of the large growth in Tattersall's outlets this year or because of an increase in existing shop sales.

It shows our benchmarking project importance because without it, no-one will tell you how products are moving in newsagencies. I will do an analysis of how scratchies tickets have gone in different states over the last few quarters.

If you want to join the benchmarking project and get a regular analysis of your shop please contact Nextra or our benchmarking officer Andrew Lloyd on Ph:(03) 9597-7222

As we stated at the recent Nextra conference where we displayed our benchmarking data, how limited the ABC-audited magazines' figures are to newsagents.

In the ABC list for the period from January to March 2008.

From this, here is their list of the top ten magazines

Rank...........Description
1..............Australian Women's Weekly
2.............*Woman's Day
3............ *New Idea
4............. Reader's Digest
5..............Better Homes & Gardens
6..............That's Life!
7...............Super Food Ideas
8...............*Take
9...............*TV Week
10..............Cosmopolitan

Yet from our benchmark studies, these are the top ten magazines selling in newsagencies from January to March 2008.

Rank.........Description
1............WOMAN'S DAY
2.............NEW IDEA
3.............THAT'S LIFE(N)
4.............TAKE 5
5..............NW
6..............OK WEEKLY(N/A)
7.............TV WEEK METRO
8.............SELECT NRL CARDS
9.............WHO
10...........ZOO WEEKLY N/A

As you can see, it looks different. It does not even start the same and the further you go down the list, the more different they look.

Also, note how number 8 SELECT NRL CARDS shows that this analysis for magazines in a newsagency should be by state and how items can be missed. SELECT NRL CARDS is a major seller in newsagencies for Network Services, yet if you depended on the ABC list you would miss it as it is not a magazine.

Newsagents now can get better figures then the ABC figures.

Here is an interesting article on the status of the “hell or high water” contracts that newsagents though Bill Express have with Mobius Financial Services. Apparently the potential value of these totals about $15 million.

I noticed that Allco, the owners of Mobius have not released an ASX announcement about it probably as it does not affect them, as this potential loss will be worn by many of the bond holders of Mobius not them.

There are some interesting points in this article here.

Despite what some people said, the rumours of the debt owing were accurate. The administrator said that Bill Express owes ANZ $53 million and the biggest telcos another $110 million. Overall he states the total is over $250 million without the newsagents' claim. Clearly the administrator is not accepting the newsagents’ claim yet, only that it exists.

Not that it matters as there is nothing in the Bill Express's kitty to pay the $250 million much less the newsagents. Now there is a new debt, the administrator who charges $580 an hour! Since they are paid in full first, I guarantee that they will be clocking up many hours.

Readers here will know of Corie and Tammy Schwarzl of the newsagency at Tuggerah. What happened is they took a franchise with Supanews and it did not work out! So now there is a massive court case in progress.

Corie just emailed me that they have added some comments.

It seems to be getting some comments now.

You can read their notes and people's comments 

Supanews is the largest newsagency in Australia. They have 41 goods shops or which they own all but 18 which are franchised. You can read about them online

What do you do when an armed robber comes into the shop? Do you stand up or just give him what he wants? It is probably a question you will not know the answer till it happens.

Well one of client's Beechboro newsagency decided to stand up. When a gunman came in with a sawn off rifle into this newsagency, the employees wrestled the gunman to the ground in the process gave him a blood nose and held him till the police came. Details are here.

"" />

GNS is holding a series of market fairs for 2008 throughout Australia.

Sat & Sun August 9th & 10th - Melbourne
Sat & Sun August 23rd & 24th - Sydney
Sat & Sun September 13th & 14th - Brisbane
Sun October 5th - Perth

In previous years, the technology on our stand has always generated much interest. It has proven to be a great opportunity for us to meet with our clients and help others to upgrade in technology.

Here was the scene last year with standing room only as people packed in the corridor queuing up.

We hope that we will be this busy year this year too. After all, we do have some incredible new technology this year to display.

You can find it here. {link has been removed}

I did not like the bit that we had checked the Mid Year Big Stationery Sale promotional file by Tuesday, June 3, 2008. We certainly had not!

On the other hand, the stuff about Morwell is great.

We had a meeting today with Bill Express. They came because they knew that we needed to be briefed. Unfortunately I cannot blog much about it. Yet they clearly have some fantastic plans and new extensions to their product lines.

I still think that they will remain the major Bill Payment supplier in the newsagency industry. No-one else has the critical mass. Despite what some are saying, in my experience almost all newsagents are still using them unless they have E-pay and E-pay admits that they are too busy with Coles and Safeway to worry about newsagents.

So although I would be the first to agree that newsagents were hurt, I do not see an alternative for almost all newsagents. I do not know if it makes many of the upset newsagents feel better to tell them that you are not the only ones hurt. There are your clients who depended on you, now you look bad and it is not your fault. We did months of program development for Bill Express now just sitting uselessly and unused. Then there are the really big losers ANZ bank, Optus, and Vodafone.

But it is gone and we need to look to the future! That was the purpose of the meeting.

It is the most comprehensive report available, with over 80 pages of statistics and facts on the U.S. magazine industry. Which is not that different to Australia. Unfortunately, it is mainly for potential advertisers, a subject of minor interest to us.

It had quite a few details that surprised me while reading it for example how important was the appeal of the portability of magazines to the consumer.

It is well worth, a look.

http://www.newspaperinnovation.com/

Coming from a small-business background where everything is in short to the medium time frame, I find it fascinating to follow large corporations with their long-term time frames. One example is how much money the newspaper companies spend to make a newspaper. Years ago, I remember how the Australian ran at a loss for years, yet the publishers were willing to keep spending to make a long-term paper.

The reality it appears that few of these free papers make money.

Another disturbing trend coming out of this free paper model, not discussed here is that to remain competitive several paid newspapers overseas are using a semi-free model; they are free now in the metro areas and normal price in the suburbs. This is almost what is happening in Australia now in some universities.

The best site for studying the free paper model is here.[link removed]

Newspapers are now a great product, very important which is why we all spend so much time on them but I suggest that many of my clients should look at their business model at the long term like the publishers are here because it is going to change.

There is a major shareholder conflict at the West Australian Newspapers Holdings Limited (WAN).

Kerry Stokes's conflict with the West Australian Newspapers has gone Cyber public. I never saw anything like it. Stokes has made a website ([Link removed]) which issues a steady stream of statements, interview transcripts and videos.

He claims to support the Western Australian newsagents’ recent arguments, among other issues. Does he think that newsagents have forgotten Canberra when he was there?

It is a great chance to read up on the conflict in a major newspaper from the top view. Enjoy.

Harvey Norman's have done what they said they would do and started a new stationery chain, Ofis.

While talking to a group of newsagents in a meeting yesterday, I noticed several did not know about Supanews.

It has 41 stores, a turnover of over $100 million a year, and is growing rapidly. It is innovative and owned by a huge company, A&R Whitcoulls, which has a group revenue of AUD 394.9 million. This group is also the biggest bookseller in Australia.

Supanews considers itself to be the most professional, successful and leading newsagency retailer in Australia.

It claims that it has newsagents worried and there is much truth in that although my meeting showed not everyone.

Like everyone in the newsagency industry, I went to look at the Audit Bureau of Circulation (ABC) figures.

Of course, the main one that interests me is the newspapers, and the same patterns I reported earlier on a previous ABC audit showed up again. The national newspapers did increase in circulation, but the overall rate of fall in newspaper circulation is less than almost everywhere else in the Western world, and magazines are a real source of concern.

The results show an overall loss of about 1% in newspaper circulation for the last quarter of 2007 (October to December). Of concern is that this period included a federal election, which should have increased sales. So, like before, the newspaper market appears to be static.

Looking at them individually, it appeared that many News Limited publications took a hammering, although others like The West Australian also went down. That, of course, is more of an issue to the publishers, not us.

mX a free newspaper is now offering advertisers scented choices from today so they can have a newspaper that smell for example like roses. That is something different.

The mX newspaper is a free newspaper owned by News Limited given out throughout main CBD locations in Sydney, Melbourne and Brisbane. If News Limited introduces this technology throughout its other publications, imagine what it would be like in a newsagency! Roses I can take but what if they made it smell like mint toothpaste?

The Australian Competition and Consumer Commission (ACCC) have allowed A&R; Whitcoulls Group Holdings to buy Borders bookshop in Australia. The decision is here {link removed}

A&R; Whitcoulls Group (ARW) is a huge company who among other concerns owns Angus & Robertson and the Supanews chain of newsagencies. They currently have the largest market share in books in Australia. In total, they may also already have the largest market share in magazines too although their market share of magazines would be much smaller than books. I suspect soon this decision will have dramatic consequences to the newsagency industry if only because I remember an early attempt by A&R; Whitcoulls to use their market muscle to demand bigger margins from suppliers. If you don't remember this read here.

For those of you that sell books, I thought that this comment by the ACCC was interesting.

The ACCC's inquiries confirmed that Angus & Robertson currently prices many of its books above recommended retail price. The ACCC was concerned that Angus & Robertson would attempt to roll out this policy in Borders post-acquisition. However, the ACCC noted that Borders has also recently implemented a policy of selling some books at prices above RRP anyway. Further, as customer and retailer awareness of backlist pricing grows, other book retailers will be in a position to highlight their lower prices and win customers from Borders and Angus & Robertson if they attempt to increase prices further,"

I got a document issued by the government and notice it claimed that the newsagency industry is extremely competitive in world standards in recycling paper which is its core product.

Doing a quick net search, I discovered that newspaper recycling rate here has gone from 28% in 1990 to 75.4% in 2005. About 86% of Australian-made cardboard, 9% of tissue, 31% of newsprint, and 9.5% of printing and writing paper is from this material. Overall Australians are one of the highest reusers of recycled paper. Did you know that?

If you want to read some details on the newsprint and magazine recycle programme it is available on the pneb site

Yet I was shocked! No-one is telling anyone that newsagencies are green and so no-one knows about it even in the industry.

My suggestion is that we should as an industry looks into this AS SOON AS POSSIBLE.