Despite what has been a bad retail period, magazine readership was not all bad news. Some are up particularly those in women's fashions like Madison and Frankie.

Some are expected such as MasterChef to go down, since it is not doing well in its rating on TV.

Of major concern now are TV magazines, those targeted at men like Zoo Weekly and motorcycling magazines.

Roy Morgan Research released its newspaper readership figures for the year ending March 2012. They confirm the ABC circulation figures.

These were released today, everything down. Looking though the figures the main reason is that Victoria, NSW and Queensland in that order went down. The big losers tend to be Fairfax's publications. News Ltd, I noticed tend to be much more stable, Monday to Friday looks better than Sunday.

According to the publishers, newspaper sales are down as people are migrating to be digital.

I decided to check with a few newsagents first, what is interesting is that several did not report these falls. What they think is happening is much of this fall is due to many peripheral sellers (subagents) of newspapers who are no longer handling newspapers. Furthermore, they think some of the drop is because many people are dropping marginal runs. If so maybe people are switching to digital as they have no choice.

A while ago, I blogged that Fairfax shares were doing badly here.

I was concerned then as Fairfax shares were 86 cents, then they went down to 69.5 cents. Then part of the reason could be explained as much of the ASX went down too. It went up with the market but now, unfortunately, the slide has not stopped, shares in Fairfax Media are today hit the lowest point in the company’s history of 69 cents. This is despite that the ASX as a whole has moved upwards since.

How it will affect us all remains to be seen. I can only imagine more of the same. More cuts, including layoffs, years ago Fairfax before they did anything would send a few people over; they would discuss possible changes and scenarios. I used to see their reps at newsagencies; their senior reps were regulars at our user meetings.

Now I think the number of people have gone n Fairfax has affected service levels. People I have worked with for years are no longer there. The new guys seem to change around a lot. I do not see how they can collect the relevant experience simply because they keep changing around. A good distribution executive needs years on the job to learn.

The last major price change was disgracefully handled. The advice is given only in the last minute, much of the important details were missing, such as the dates and there was a refusal to supply details. Their attitude I think could be described as “We do not care."

For a company like Fairfax, the distribution should be one of the top priorities I wonder what other departments are similarly affected and maybe these lower prices on their share reflect some of these concerns by the shareholder.

Note: If Fairfax believes that they can get the revenue required from digital and drop printing in the short term, I think they are dreaming and maybe that is what the shareholders think too.

Nielsen's data released today showed advertisement measured by pages fell 4% in 2011.

Pacific Magazines declined 2%. ACP Magazines declined 4%, and Fairfax Magazines had a 31% decline (now that would hurt).

Here is a radio interview on the closure of country newspaper distributions with Carolyn Doherty from the Australian Newsagents' Federation and Brad Layton the owner of a country newsagency in New South Wales.

I thought it was very good. The points were clearly made. I was disappointed that no-one from Fairfax was there to respond.

One issue that I think should be mentioned is that it is all well and good to complain, but nothing was said about what could be done to try to fix the situation. For example, why was the local newsagent not armed with special offers from News Limited that is still delivering there in an attempt to save these seventy five (75) clients that he has possibly lost?

The Newspaper works is the industry body for the major newspaper companies in Australia.

They have just produced to recent reports on newspapers in Australia

State of Australian Newspapers

Newspaper fast facts

Both I think many will find quite surprising. These I think confirms what I have been saying for a long time that newspapers are still a good product. They bring plenty of people into the shop, the margins are reasonable, take up only a small space, etc. but newsagents need to change to accommodate the new market realities.

Read it and make your own mind up.

Another newsagent point of Sale supplier NewsPOS has given up on newsagency software. It is a bit scary what is happening now in the market place which has been so stable until recently.

Last year another well-known Point of Sale software supplier almost went under and could not sell. It still cannot be sold. I know to look at the figures I was not interested.

I do expect that there will be more dramatic changes in the marketplace in 2012.

Overall magazine circulation dropped 5.6% for the October to December quarter in 2011 compared to 2010.

Some publishers like ACP went down a lot 6.4% others like Express went up 1%.

What seems to be happening is the larger circulation figures dropped less than the smaller ones. I am sure this in part has to do with the reduction in shelf space that retailers are now allocating to magazines.

Overall newspapers circulation dropped 4% for the October to December quarter in 2011 compared to 2010.

What it does look like is that those newspapers that are number two in their category took most of the damage. We are still slowly moving to a one newspaper, a town model.

In NSW, the Sun-Herald took the biggest hit, although overall Victoria's figures are worse.

Sunday newspapers are down, compared to the rest partly I am sure as the number of outlets selling these are going down.

And Fairfax did worse than other suppliers.

I wonder if there any economic logic to these deals maybe it is more to artificially, build up circulation figures?

[image removed]

A subscriber gets a copy of Herald Sun Monday to Friday to be picked up at the university and on Saturday and Sunday home delivery for 40 weeks. Plus they will get a home delivery of the Herald Sun, Monday to Sunday for 12 weeks during the summer holiday break.

A paywall is a term used by newspapers where someone online is offered a newspaper, but they have to pay for it.

The Australian is offering now a digital version free for three months. The idea being in three months they are trying to move people online and get them to pay with a paywall.

nd it interesting to see comments here from the Australian public what they think about these paywalls here. The consensus was as the Australian public are used to free news online, they are now upset that the Australian intends to make them pay for it.

I still think that these paywalls are going to have only very limited success. That there is going to be little money for the publishers online and they are better off sticking to brick and mortar companies like newsagents.

This is an advertising campaign, run by Victorian Newsagents. It is being promoted to the public and has a nice prize, a trip for two to Paris.

You will find details here on this website. {Link was removed} 

They also have a facebook account here, please click Like to build up the numbers.

The newspaper industry has issued a response to the latest ABC circulation figures. You can read it here together with the actual figures.

They blame the result on the current bad retail environment plus the move to digital devices like smartphones.

Since I do not see such bad results as these figures in newsagencies. I suspect that much of these losses are in sub-agencies and supermarkets.

The latest quarterly newspaper circulation figures are almost everywhere down according to the Audit Bureau of Circulations report.

The only exceptions are very marginal increases in Fairfax. What makes it worse is that these figures include a period with the floods in Queensland and Victoria, which generated a lot of interest with the public. Queensland is a very high loss but much of the loss there may be an actual loss of sales in Queensland as many retailers did not receive newspapers to sell.

It is almost a percent higher than what we expected, it is now 3.8% down. This may be because newsagents maybe affected less than other retailers.

Weekly magazines also went down, much of this could be because many retailers could not get stock but their total sales are down 6.58% in the three months to March. Women magazines took a big hit.

A more detailed ABC report on newspapers is available here.

{report has been removed]

Almost all newspapers sub contract out the work for writing newspapers. Instead of the newspaper having to produce a section for entertainment, they can hire a subcontractor who works for many newspapers.

The sub contractor writes for many publications say an entertainment section. Because they have more specialization and probably budget, they can probably to be fair, do a better job. Then they make a few local changes and at a fraction of the cost of an original production the newspaper has an entertainment section. If the subcontractor uses contractors in India or the Philippines it can be cheaper still. Click here for some details of what they do.

The Sydney Morning Herald, the Sun-Herald, The Age and The Sunday Age will soon greatly expand out their sub-editing. That may cost hundreds of reporters’ jobs.

Much our newspapers today are not a local product, soon even less of it will be. It will make the newspaper cheaper and possibly a better quality but this will probably make the local newspaper less attractive to the consumer who are looking at a local perspective, reduce the point of difference between the newspapers, and make the newspaper less competitive to the internet.

Note the same is happening in magazines but its effect is probably much less here.

Network Services have just released their half-yearly analysis on magazines based on the ABC Audit results compared with the previous year. Overall the results are not good. However, the little one can do about this!

However, no matter what happens overall there are major changes in the type of magazines that get sold. This is because as fashions and peoples’ taste change, so you will see over time categories going up and down. This is something we can do something about immediately such as increase the amount of space a magazines is allocated, put them in a better location, put more titles in that category out etc.

What I am primarily looking for is what is going up. My clients after all through their comparison reports over a period know what is going down. What they sometimes miss is magazine category going up because they are not giving that category a chance. Say for example, a newsagent and tried ABC magazines years ago, and they bombed, so now he always puts them in as an early return. Now if peoples’ tastes have changed and ABC magazines now sell, because he never gives them a chance, he misses out.

Now in this Network Service report, a key finding was

Photography publications, under the craft and hobbies category, grew by 11%.

So I thought to myself that sounds reasonable, people have more digital cameras, people are taking more photographs, computers are making photography cheaper and more popular and with Facebook and email people are sending more photos than ever before. So it makes sense that magazines on photography are doing well.

So I decided to report it, but before I did I checked on our benchmark figures to give a newsagencies perspective.

I created using our software a virtual class for photography called it P1, and then decided to check its sales figure in newsagencies.

Here are some newsagents figures.

This is a suburb newsagency.

In 2010, they had 43 titles in this range, which sold 775 copies for $8835.
In 2009, they had 35 titles, which sold 783 copies for $9071.
In 2008, they had 32 titles, which sold 800 copies for $9326.

Hardly, what I would call a growth category, over the years we see more titles, which means more work. There are fewer unit sales, and turnover is almost $500 less.

I decided to look at a country newsagent. So I set up again my virtual class P1 and checked out their results.

In 2010, they had 50 titles, which sold 226 copies for $3774.
In 2009, they had 49 titles, which sold 350 copies for $5042.
In 2008, they had 44 titles, which sold 364 copies for $4525.

These results are even worse. In fact, they are terrible.

So at this stage I was very confused, so I went back to the initial report by Network Services. Take a look what was said “Photography publications, under the craft and hobbies category, grew by 11%.” Emphasis added.

Then it clicked. I suspect that photography magazines have not grown at all. What has happened is that because photography publications are split over several categories, and in one of these categories photography magazines has done well this is what they have selectively reported.

When reading any of these reports, please remember the old Roman saying “caveat emptor”, buyer beware! Just because it looks right does not mean that it is.

A blogger in England shows a picture of a papershop in England. See on the top a sign advertising a magazine "INSTYLE",

now the same paper shop, has a sign on the top is advertising phone recharges.

At some point this news/gift outlet just across the road from Paddington railway station has lost its InStyle magazine branding and accepted a new fascia sponsored by a mobile phone card company. It speaks volumes about the relative marketing power of the two industries.

This comment by the blogger in England may be applicable in Austalia soon too.

If you want to read more about papershops in England has a read of his blog here..

Contrary to what some are saying, this group is not gone. It is now under voluntary administrators.

This group through its bookshops sells about 30% of Australian book industry, and it also controls the largest newsagency franchise of over 50 newsagencies, mainly in NSW and Queensland, although they do have some newsagencies in Victoria.

Last year this group announced a record profit, this year they lost about $43 million. Since the group is owned by a bigger organisation Pacific Equity Partners, who are huge and could easily afford these loses. What has happened is that Pacific Equity Partners has made a decision to get out of this market.

Since in Australia, most voluntary administrations fail as few agree to write off debt, I expect that Borders, Angus and Robertson, Supanews etc will be split and sold off. Most of the shops will be sold, and the unprofitable stores will be closed. So most of our clients will be largely unaffected. Since we have many clients in this group, I am wondering how badly we will be affected.

I was interested in what the newspaper companies are saying about the current 3% drop reported in the latest Audit Bureau of Circulation on sale of newspapers. In perspective 2008, it was about 2% down on the previous year, last year in 2009 it was about 1% down.

This time with such a big drop, their main reason was.

The Newspaper Works CEO Tony Hale said that uncertain economic conditions, especially in the retail sector, had contributed to the decline in printed newspaper sales in the latest quarter,

.

You can read the full statement there.

One problem with this argument, I think is that retail sales are marginally up this quarter. In any case, if retail is their major concern now maybe they should talk to one of their largest retailers newsagents to find out more.

Update: A few people asked me what are my opinion for the next quarter. I predict for some of the smaller papers, a huge drop because the Audit Bureau of Circulations will probably change their rules because of the controversial deals for university students, teachers and sporting clubs. Some newspapers like Fairfax's Melbourne Age these may add up to 30% of total sales.