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?

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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.

Now there is an important election happening in VANA, which is probably the most important newsagency association outside of the ANF.

There are running for the top position two candidates with quite separate views on how VANA should be run.

One of these people, I know well as I have worked with him in the past is Trevor Mason. Trevor Mason runs an organisation First Advantage.

From my experience, Trevor Mason does know what he is talking about and puts his point out very well. In his view is that the newsagency industry needs a shake up because as he sees it about 1/3 of the newsagency industry is in real danger of disappearing soon and his solutions is a modern retail approach. This involves among other points a buying group, adequate stock control systems in the group, financial management and debt management, a product mix appropriate for newsagents, experienced work force, store layout and display of stock and adequate proximity to key markets.

Little of this can happen, unless VANA becomes more of a commercial entity. This may cause problems for members of the organisation that he sees as marginal. It will involve a change in VANA existing mission. It will also cause conflict with those that see VANA as a group and with several marketing groups that exist already in the newsagency place. It will also cause problems with existing suppliers, many of who would be extremely reluctant to get involved in such a reorganisation. Depending on your view this may be a necessary evil.

Although I do not know the other candidate Robert Wade, from what I have been told he has nothing against a modern approach to retailing but sees VANA as a group.

If you are a VANA member, I do advise you to vote as I do believe that this election could have major affect on your organisation.

One of the biggest problems in trying to predict sales of a magazine is how good the cover is for this issue. If the graphic artists make an interesting cover, the sales will go up. Yellow seems to be a particularly popular colour with the Australian public.

Here are the US magazine covers for 2010, picked by the public. It might give you some ideas for what the Australian public is looking for. I confess I would not be interested in the winner below. I just do not have time for much TV.

However, I thought these in the Best News & Business and the Most Delicious categories would have grabbed my attention.

For the full list click here.

[All images been removed here]

This powerpoint report by Newspaper works just released was I thought was a good summary where you can see quickly how Australian newspapers are doing.

As you can see little has changed.

Note one point should be kept in mind was that during this period Australian population increased by 14% and newspaper sales were stable.

I was looking through this survey of UK iPad owners available here, [Page removed] people who own iPads are using them. What is very disturbing is that it is their preferred device for reading newspapers, magazines, and books. 43% of iPad owners use it, mainly at home more than 10 hours a week.

This is disturbing for the newspaper retailers with the growing usage of iPad and its brothers. Already over 300,000 apps for newspapers have been sold or distributed here. As the newspaper companies here are pointing it, it is already affecting circulation.

The spread of these devices will continue as people get more used to them, as they fall in price, with the generous tax concessions for educational use and state and federal government plans to distribute these devices in schools and libraries.

One positive point is that the main buyers of newspapers are over the 50s who are less likely to buy iPads. Still, newsagents need to plan for a faster decline in the circulation of newspapers and magazines as these devices spread.

The Alliance of Australian Retailers has been receiving a lot of bad press mainly as many see it as a front organisation for the multi-national tobacco companies campaigning against the federal government's proposed plain packaging for retailing cigarettes.

The alliance on its website claims to be an organisation fed up with excessive regulation. It then quotes as an example the government's proposal to mandate plain packaging for cigarettes. Although I agree with them about excessive regulations, I do not feel that plain packaging for cigarettes, is a good way to present this case to the public. Nor do I see from the criticisms in the press that many others do either.

I suspect it was because of this bad press that the Australian Association of Convenience Stores (AACS) withdrew from the alliance with its members claiming that they had been misled.

I am sure that nothing good will come to the ANF if it remains in the alliance.

GNS show images removed

The newspaper works, which is the propaganda organisation for the newspaper industry in Australia have put out a short powerpoint presentation about newspapers. It is available here.

I particularly like the comment that a smash hit on Youtube of 6.6 million hits would simply be Tuesday for a newspaper.

With all this doom and gloom about the media, many lose sight that newspapers are a terrific product. Everyday the consumer needs a new version, they take up little space, and you only pay for what you sell after you have been paid.

Have a look and see what you think.