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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.

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.

The newsagency involved contacted me and asked us not to talk in public about the case so I am now removing all the articles.

If you want to read the full 40 pages of the current judgment it is available now online.

There is an interesting article here in the dispute over commissions in the Herald about the new Victorian public transport smartcards.

NEWSAGENTS are refusing to sell the new public transport smartcard, saying the commission being offered by the State Government

....
Clayton Newsagency owner Simon Richards, a third-generation newsagent, said he told the TTA he would not be selling the ticket, despite his long history selling Metcard.
"I won't be taking up their offer," Mr Richards said.
"They are just making it economically unviable."

Simon Richards is right. We have been involved in this since Bill Express pulled out. Then we stated the proposed commissions offered were too low. A retailer needs at least 3% commission just to handle money that does not include anything else. So unless you are a tiny agent with the Transport Ticketing Authority doing say $400 a week than with this commission structure you will lose.

It is no wonder so few retailers have joined up. As what the article states are that "more than 100 retailers have already signed up to be agents for myki." When I spoke to them in October the only major retailer that interested was 7-11. 7-11 has about 366 outlets Australia wide. I would estimate that a quarter would be in Victoria. So almost no-one has signed up since I spoke to them. I don’t wonder why!

I think that if this goes ahead with the existing commission the only solution for newsagents who want metcards is to get a myki machine. This box then handles the tickets and the money. In exchange for looking after this box newsagents would get a fee. From my discussions with myki, I suspect on this they would agree.

I feel like the driver at the road here must have felt. All I want to do is make my clients live a bit easier by working out what is happening over the holiday season so I can give my clients clear and concise instructions on what to do. Is that such a big ask?

Like any business organization these guys keep their little secrets. So it was interesting when Gordon & Gotch Australia Pty Limited and Horwitz Publications had an argument over the changes in return policy of magazines.

The dispute seems to be that once Gordon & Gotch Australia Pty Limited went away from checking everything to spot checks, Howitz became upset and complained the returns data became less accurate. Since large sums of money was at stake, ad they could not agree they went to teh courts.

This is all lucky for us as it makes interesting reading and gives us some answers to some questions we occasionally ask in the industry.

If you click here
http://tinyurl.com/3dbrxn

Do a search for SCHEDULE 1

You can see what Horwitz Publications are paying Gotch, a fee for sending each magazine. In 2004/2005-year it was $0.215 a copy. They also get a fee for collecting the returns of $0.075 for an unsold magazine. I was surprised how low these fees are. If you think about it for a company to do it for that price shows an efficient operation. Note there are obviously extras as further down you can see for example they get a bit extra if the magazines are not barcoded. Which is good as it encourages suppliers to use barcodes. Anyone who does not use barcodes in retail today should be punished.

There is a big issue in returns I noticed that I never thought of before as I read this document. It is the magazine producer in this case Horwitz Publications, are going to much trouble to make sure that unsold copies of magazines are destroyed. It makes much sense when you think about it. An unsold magazine is often a dangerous rival product to the current magazine.

However what I found particularly interesting is that supermarkets are not required to return copies if unsold! Why supermarkets and not newsagents in many states, I am not sure but I would be interested in finding out.

Another point I can see is that not all clients of Gordan and Gotch are required to send return forms unfortunately this appears not to be important in this dispute so no details were supplied other then it happens.

Still it appears that this round Gotch lost and I suspect it them a lot.

Enjoy reading it, I think you will find it interesting.

NEWS CORP in Victoria now state that

The over-riding requirement for newsagents is that they must be able to transmit home delivery files automatically to HWT each week by the end of the 07/08 financial year

What this means is that from the end of June 1008 customer subscription data must be sent to HWT using an automatic facility every week in the new formats!

Our windows version already has this in place.

However since newsagents with DOS cannot do this now, to make this happen if you are such a newsagent with a contract in Victoria with NEWS CORP, NEWS CORP will give you an interest free loan. This amount can be up to $10,000 to upgrade your computer system by the end of March 2008. Included in this $10,000 can be such items as software, data conversion, computers, modem, broadband, software agreements and training. All are included. Whatever is needed to allow this to happen!

This is a fantastic offer. Motivated because everyone realizes that you cannot just dump people.

So for our DOS users we will be releasing in late February, a DOS version WHIZ that will have this function. As HWT insist on an Internet broadband in the shop, the minimum specification for WHIZ is windows 2000 although we prefer XP.

One warning WHIZ may need a trained engineer to come out on site to set it up.

We will not be supporting WHIZ on early operating system of windows for example Windows 98 or 95 or DOS operating systems. If you want to use some others for example Linux or freeDOS I would be interested as a theoretical exercise although I suspect that HWT will be reluctant to support such operating systems. So perhap run it though HWT first.

Also by the nature of the automatic facility, HWT will know instantly who is not doing this so although there is a lovely carrot there is a stick as well. My understanding is that after March 2008, the $10,000 offer is closed. Then NEWS CORP will state at any proposed newsagency transfer the software is not satisfactory if it does not have this automated facility. After June 2008, NEWS CORP intends to take action against newsagents with old software using penalty clauses in the existing contracts.

If you wish to discuss this further to discuss this further. Ring up our Head Office on (03) 95977222 and ask for me quoting "NEWS CORP $10,000 offer"

A group of around 50 small business owners is now holding signs with messages. Note how some are dressed. They are protesting at the annual general meeting of Lend-Lease in Sydney claiming that because of the extensions of the Erina Fair shopping centre in 2003 many retailers and restaurant owners were financially ruined.

{links removed  as no longer active}

I remember recently a really good newsagent near Dandenong went badly south partly for a similar reason because of changes to the center he got moved. They ended out in a section that had no after-hours trade which was a major part of his business.

In the Australian, I thought it was interesting that it is not just newsagents that
complain about it. The journalists at The Sydney Morning Herald were complaining over their newspaper's use of a wraparound. They think that it "imperils the prestige and integrity of the paper,"

Years ago all the card companies came together at a big meeting and agreed on a standard industry-wide card classification method. Then they all went back and used something different. When challenged all card companies would announce that they were following the industry standard. Finally we had enough.

For technical reasons with POS software, I decided the John Sands category system would be the easiest. So I went to Ron Thorpe the National Business Development Manager for Hallmark Cards in Australia and explained to him the situation. He then asked me what I needed. I told him what I need is for Hallmark to follow the Australian standard and then tongue-in-cheek presented him with the John Sands category under the heading Australian Standard. He immediately assigned one of his staff Kim Kan to produce a file with Hallmark cards of this category standard. What even made it nicer for us was only our clients could do it as Kim Kan only sent this file to me!

I then went to many small card companies and told them this is the standard. John Sands does it, Hallmark does it, this company does it, etc so you should be able to do it and generally, they would. Soon our clients were handling integrated card layout.

Our clients were happy and we were happy as we picked up a few good deals out of it as the card representatives soon discovered that only POS Solutions could handle integrated card layouts.

These happy times lasted until Kim Kan left Hallmark. Without Hallmark, we were back to no industry standard. So off I went to Ron Thorpe again. He told me he was working on it with John Sands as we speak. This I already knew as earlier John Sands had already spoken to us about it. However, interestingly Ron committed himself to a new system in place by 13th August 2007.

Well, it is now October 25, 2007. It is still not done. However, it is not from lack of activity as my meeting yesterday with one of the managers Ron Popp of John Sands and Hallmark showed.

It was a very productive meeting, I thought what the three of us today have agreed at the meeting was to have meaningful names for the cards. Soon your customer if they look at the receipt will have something that makes sense for them for example not “Everyday card” but say “Mum’s Birthday card”

Furthermore what we now have is a Proposed Card Classification of 16 pages of specification and discussion notes with an extra one-page summary. Although no agreed card standard yet we are close! Remember there are about 28 companies involved all with different systems all of who have to agree. So this is not a quick process as everyone is looking at something that can last about six years.

What is proposed now though is great! I would be prepared to run with it *AS-IS*.

All cards are going to be divided into several groups.
The first seven will be.

1) Product type – The physical description of the product for example Boxed Card, Flat Wrap, Calendars etc
2) The Occasion for example Birthday, Anniversary, Get Well, etc
3) The Gender of the recipient for example Male, Female, General, etc
4) The relationship to the recipient for example Mother, Father, etc
5) The life stage or Age for example Adult, Teenage, Age 3, etc
6) The Segment style for example Comic, Inspirational, Photographic
7) The Colour mainly used in Wrapping paper

I thought that number four was a particularly brilliant idea.

Then we are also going to include a range somewhere else, for example, Spiderman, Anne Geddes, etc probably using the author field of the stock file.

I cannot wait to get it going and I am sure once we do our clients will pickup an extra 5% in card sales.

The Australian Press Council has just issued its 2007 Supplement to its 2006 report. This is the best report on the industry available with one particularly interesting point from our view, nowhere are newsagents even mentioned.

Still, the report is available here for reading online.

[link removed]

I recommend reading chapter 2, which has a detailed study on current circulation.

If you prefer, you can download a pdf version of the report here.

[link removed]