The following has been sent out to newsagents with 2 weeks to go

Dear Agent – this is an early warning that Gordon and Gotch will be phasing out paper returns over the next few months. Supplementary Returns will not be accepted by paper after the 1st of August 2010 nor will any paper Point of Sale forms ( whether they are Current or Supplementary returns ). It is time for you to start exploring other options for your returns so you have plenty of time to plan for this change.

If you currently handwrite your returns on the paper forms that we send you each week then you will need to learn how to submit these returns on Gotch Connect.

If you currently have a Point of Sale system in your Store and are a member of XchangeIT we recommend you start asking your POS Providers for information on how to do EDI Returns through XchangeIT.

Our National Contact Centre will be able to assist you with your inquiries about this, or go to www.gordongotch.com.au to Register on Gotch Connect and start learning about Online Returns.

Now our users have to choose between either online or XChangeIT returns.

With Network not accepting paper printouts from our system, NDD disappearing, and now Gotch not accepting them, this means that soon our printed returns forms will not be accepted by anyone anymore.

After our meetings with Gordon and Gotch, one important issue that came out of it was getting their sales data right. Gordon and Gotch are not willing to use the sales data until the majority of newsagencies are sending accurate and timely sales data. This apparently is not happening.

As such we are re-arranging our training timetable next week to make a special course on getting XChangeIT right.

According to an announcement made at the All Things Digital conference the Australian’s iPad app has had 4,500 downloads just one week after its launch.

My immediate thought was how many of these are getting a special deal but still, that is 4,500 potential customers lost to newsagents! You would need many newsagencies to sell 4,500 Australians a day.

It is priced at $4.99 a month. That is much less than buying a physical newspaper. Is printing and distributing that much of a cost to a newspaper, or is this just an introductory offer?

Consider the economics of the offer. A home delivery of the Australian and Weekend Australian for a customer for a 26 weeks subscription $180.70, an iPad app for the Australian for the same period is about $30.00 (26 weeks x 7 Days /365 Day x 12 months x $4.99 Monthly subscription).

Clearly, you would need more than an Australian subscription to pay for the iPad but it does show the problem in technology that newsagents face now.

I was looking for the contact details for one NSW newspaper and found this. I think it might be useful for others as well.

Click here for a list of links for Sydney metro and NSW regional newspapers.

[These links have all been removed]

This webinar is now scheduled for next Tuesday.

XChangeIT errors

A recent study of XChangeIT showed that about 15% of all XChangeIT sites are failing. This webinar will take you through the setting up and administration of your XChangeIT system.

The two main surveys in the industry for publication numbers are the ABC circulation and the Roy Morgan Readership survey.

The emphasis is different as the ABC deals with circulation while the Roy Morgan deals with the readership. An example might be a newsagent would be interested in circulation while advertisers mainly in readership.

Roy Morgan readership survey has just been released and is available here.

The two results seem fairly similar.

Part of the problem I think for news suppliers in 2009, is that we lacked enough big major news that are required to generate interest which drives sales.

Now a battle is going on between ereaders in Australia now. Notably, iPad, which Apple is pushing, Amazon is pushing kindle, sony ereader which I still think could be a good chance in Australia, particularly if the large magazine and newspapers publishers adopt it and the iriver story that large Australian retailers such as Harvey Norman are pushing.

Still, the winner I suspect will be a computer. I tested the Kindle software last night, then downloaded a book and had a read.

While doing so, I felt that many of our readers here might like to experience the feel of what an e-reader is and how it functions.

So if you want to see what it is like, please do the following steps.

1) Click [link removed] to this site, and download and install the kindle software.

2) Then go to one of these sites and select a book. Read a chapter and see what you think.

[link removed]

I suspect you will notice that it is not as easy to read with the eyes as a book or magazine. This will change as the new screens come out.

The Melbourne Age has asked us to pass on to our clients that they will be making a really good special this weekend.

Together with any sale of the Age, the readers can purchase the new Norah Jones Album (The Fall) for $3.00. You will need to stock receive them. Details on the offer, codes and barcode is available here. For this offer, they should consider providing posters.

Norah Jones is Billboard's 60th-highest artist of the decade based on charting of her songs. Click here for her details.

The Magazine Publisher’s of America has just issued their report on the latest trends of magazine circulation, although American, it does have relevance to Australia too.

I particularly found interesting the figures that show a decline in single sales of magazines and the increase in subscription. This suggests to me that the current emphasis on newsagents selling single copies is wrong. Newsagents need to be encouraged to sell subscription, and they are in a perfect position to do this.

Click here for the report.

It would be nice to see an Australian version of such a report too.

The latest delivery fees for NSW are here.

As expected NSW newsagents got less than Victoria but what was a surprise was that they got such a big increase of 30%. This increase is probably is as much as the public will take.

In fact they picked up every award

Winners of the VANA awards

Congratulations to all of them from POS Solutions.

Retail Newsagent of the Year
Nextra Sunbury Newsagency

Distribution Agent of the Year

Local Delivery

Employee of the Year:
Matt Rice from Clayton Newsagency

Also two other POS Solutions clients were honoured as life members of VANA

Ron Geyer (Nextra Sunbury Newsagency) and Rick Richards (Clayton Newsagency)

[Images removed]

Take a look at the Financial review figures from the current ABC figures for newspapers.

{chart removed]

On this list, Fairfax did the worst despite their giveaway deals which I discussed here.

Despite our growing population, we saw a 2% drop. What is also disturbing is a recent study of newsagents showed a drop of 4% in newspapers. Part of this is probably deliberate as many newsagents are changing their emphasis to other products, many did not even bother to renew their News Corp contracts. Another part could be the decline in tobacco, cigarette sales and newspapers are often linked. I think we are seeing all of that and more here.

Still, from a newsagent view, a newspaper is a very good product. They take up little room, margins are reasonable, and they bring many to the shop.

For over a decade, consumers have been reading newspapers free on the net. More people are reading the newspapers and fewer are buying it.

One possible answer newspaper sees are paywall. These paywalls make people pay before they can read newspapers online. In the early days on the net, these were tried and slowly dropped. Now many newspaper companies want to try again.

If the rumours are correct, soon some of the larger Australian newspapers will be putting up paywalls.

I confess being sceptical that these *paywalls* will work for newspapers.

Here are some preliminary figures from the USA. Newsday in 2009, weekday circulation was 377,500 making it the 11th-highest in the United States.

The newspaper paid $4 million to set up a paywall. On October 22, 2009 it went up. Since the paywall gone up, there has been a 41.5% drop in site traffic. Over that period, they have gained 35 subscribers paying $5 a week{Link removed].

At present, the only financial model that works for mass newspapers is print.

VANA have what should be a very good meeting coming up with

Andrew Hockley-General Manager: Sales & Marketing and Stephen Kaye-Circulation Director from The Herald & Weekly Times

talking on HWT publications, their future plans and the process of newsagency involvement.

It should be a topic of great to many newsagents.

It will be on

Tuesday - 16th February 2010

If you have any topics or issues you would like asked or you want to know more details please contact Alicia Carmichael on
Telephone: 03 9482 2911

I suspect the questions from newsagents will be more interesting than the talk.

Since I wrote about the new computers coming out now with the improved screen.

If you are unsure what they look like, here is a demonstration by Microsoft on these new computers that are being released now. That are called tablet or slate computers.

This is a magazine displayed on one of these new computers.

{links were removed}

One of the big highlights now are e-readers. More than forty companies now have e-readers all promising competition to the Amazon Kindle and the Sony e-reader. Clearly a flood of e-readers is on the way to Australia. Going by past experience Australian being rapid absorbers will take them much quicker than the US.

Much of the interest in the e-reader is because many newspaper and magazine companies are looking to the e-reader like the Messiah that is going to save them from the internet. Once their readers get e-reader, these readers will take out subscriptions then they will have revenue without the expense of publishing and the cost the intermediary (the newsagent).

I do not think it will happen. The real competitor to an e-reader is a computer. Essentially an e-reader is a limited computer with an improved screen for reading. As these improved screens get generally released, almost every computer will be an e-reader. These computers will be able to access free material just like now.

So I believe the problem of ebooks is much bigger and more immediate then most.

Our understanding is that now 30% of newsagents have signed the new agreement which is in line with an ANF survey done a short time ago. This survey said that only 30% would accept it AS IS.

What is wrong is the ACCC have created this unfair David and Goliath conflict by allowing newsagents to bargain collectively only voluntary on a state level. This makes it a pointless exercise, to include the newsagents’ state organisations. It also forces the ANF to stay out.

As there is no monopoly now, what the ACCC should have done is forced publishers and distributors to deal with these state bodies for those newsagents that nominate their state organisations as their agent to negotiate on their behalf.

Still, the state organisations are doing the best they can for their members. VANA newsletter detailing their concerns about these contracts.

For those of you that have not signed and returned your agreements, VANA advice is to contact News Corp to discuss any issues you have.

From my discussions with newsagents that have given up these contracts, the long-term effect to the business is greater than you might think. I know a person who sold his territory to another newsagent on the understanding that he would continue to get the publications at 25%. That newsagency was soon taken over by another newsagency and that one refused to honour this contract with this new subagent saying they could do it for nothing. Now the new subagent is at 12.5%.

I read the following story, in a press release by a gaming company Amuso, {link removed}. It appears that News Ltd may include online gaming in its websites attempts to charge customers for reading its news stories. Although I do not think that micropayments will work for news, this idea I think may work. As it makes payments voluntary.

News Ltd is to introduce gaming as the next part of its strategy to extract money from users of its news websites, with the launch of a pay-to-play trivia game on its Daily Telegraph website. Daily Telegraph Trivia will be a flash-based game embedded on the Telegraph site. Users will be charged in the region of $1.50 to play. The platform is being provided by the London-based company Amuso, which has an existing relationship with fellow News Corp company MySpace. Users will either be able to play for free or pay to enter games against other players with the entry fees pooled as a prize. Amuso already powers gaming across the world, so there will be an immediate pool of opponents. The contestants are able to communicate with one another via live chat during the game and invite friends to play too. Topics include general knowledge, entertainment, celebrity, music and movies. The technology is a simple, embeddable Flash widget, making it easy to roll out to other News Ltd sites if it makes good money for the Tele’s site. However, a spokesman for News Digital Media told Mumbrella: “At this stage it is just a Daily Telegraph initiative.” Barak Rabinowitz, the CEO of Amuso, said: “Having experienced great international success with companies such as MTV and MySpace, we are very excited to be launching into the Australian market with dailytelegraph.com.au.” Michael Robinson News Digital Media’s CEO of media, said ”Our users will now be able to take advantage of world-class gaming technology.” Amuso is bankrolled by Mangrove Capital Partners, one of the founding investors in Skype. The move is the latest by News Corp as the company seeks to widen the revenue streams for its news-based sites beyond advertising. Boss Rupert Murdoch has been signalling for more than a year that he intends for the company to start generating significant revenues from its online news sites. In the UK, News Corp is further down the path with Times Online set to charge users for 24 hour access and the Sun newspaper the biggest short haul travel firm in the UK.

Although the Australian newspaper circulation stood up well compared with its overseas counterparts, it did record a slight fall in the September quarter of 1.7%. The question arose how relevant it to a newsagent as several said that they did not feel it.

So one Victorian newsagent that claimed not to feel it, we decided to check their newsagency’s figures using our benchmarking project and compare it to the ABC figures for July to September quarter. The benchmarking result for their newsagency when we examined their information was this.

{image removed]

As you can see, it did not follow it exactly but the trend is similar. What we think happened is as newspaper sale's slight drop (1.1%) was not enough for a person to notice anecdotally. Another would be that his main newspapers had a price-rise so much of the sales drop was hidden by the price rise.

I am not allowed to release the ABC circulation figures so I pulled this public chart from an article that admit-ably negative towards the Melbourne Age. Check how your newspapers go compared to the national figures.

[Removed]

What I noticed looking at these figures is that overall newspaper circulation has dropped more for number two newspapers in a region. The era of a one-newspaper city in many places will possibly be a reality in Australia.