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Newsagents mull News Ltd paper distribution changes

Newsagents are understandably concerned about the impact of the News Limited newspaper distribution changes. Their concerns have been heightened by poor communication about the coming changes over the past two years — from News and state-based newsagent associations.

The T2020 “Newsagents for the future” strategy — dropped online this morning  —  is an opportunity to start again, to reset if you will. It is the first time newsagents have had direct access to considerable information from News Limited on its plans.

While News will accept newsagents being retailers and distributors, newsagents do need to make a decision to be one or the other in my view — in the city and major regional locations at least. In the country it’s a different story. This is where the News approach will provide information to help determine the best approach further away from large population centres.

I support distribution consolidation. The restructuring of distribution has been long overdue. Newsagent data, association data and publisher data for close to 10 years has shown this is necessary.

While News could have solved the issue by giving existing newsagents more money, that would not have been a solution. Indeed, it would have rewarded the inefficient system we, all of us involved for many decades, have allowed to exist.

There are plenty of newsagents who saw this coming and started consolidating years ago; some have more than 10,000 deliveries today. Kudos to their entrepreneurship.  This is business, pure and simple.

So, something had to give. News, looking at the print model, made the decision and has now announced a plan. This plan will proceed.

Yes, it makes it clear that existing territories have no goodwill value. It also makes it clear that new territories will only have goodwill value in the context of a five-year agreement. This is a new paradigm. There has been enough information in the marketplace for the past few years to see this coming.

I am worried that too many will get caught in the loss of goodwill for the current business, the need to bid for a territory and or the need to run a distribution business of a scale far greater than the traditional newsagency distribution business today.  Worrying about these things would be a waste of time.

Newsagent attention and association attention should be focused on the how and not the what and why.

As this is a national issue, the Australian Newsagents’ Federation ought to establish a national office staffed with an accountant skilled in business planning, a business planner/manager/mentor and an overall project manager as leader. This team should be put at the disposal of newsagents first in the three Queensland regions and then elsewhere as News rolls the changes out. I have shared ideas with the ANF on how this could be partially funded.

Newsagents should assist in funding the ANF establishing this national office tasked with running this issue on behalf of newsagents and providing advice, assistance and support for newsagents directly affected. The states should also support it and stop trying to use this issue at a state level.

Why is this not a state issue? News is moving nationally. For the first time the company is operating outside its traditional silos. If News can operate nationally the only option for newsagents is to take a national approach.

By establishing a national office newsagents can deliver organisational efficiency to match the operational efficiency News is looking to achieve through the distribution changes. Yes, the News announcement today is as much an opportunity for how newsagents organise their own representation as it is about restructuring newspaper distribution.

*This article was first published at Australian Newsagency Blog

3
  • 1
    Hamis Hill
    Posted Thursday, 9 August 2012 at 3:03 pm | Permalink

    The Economist, Schumpeter, argued that the “innovative entry by entrepreneurs.. destroyed the value of established companies that enjoyed a degree of monopoly power” (Wikipaedia)
    He called it creative destruction.
    Explains News Ltd’s continuing and futile opposition to the NBN.
    And the internet’s innovative “entrepreneurs” like Crikey.
    Will there be any “newsagents” at all by 2020?
    Or will they, like the print media itself, all be, collaterally, “Creatively Destroyed”?

  • 2
    David Spice
    Posted Thursday, 9 August 2012 at 3:04 pm | Permalink

    Of course this is overdue. But it is also a really interesting step if news is going alone. Because Fairfax will be stuck with even more underperformance and cost in its distribution. Especially in NSW.

  • 3
    Mark Heydon
    Posted Thursday, 9 August 2012 at 3:23 pm | Permalink

    Newsagents seem to be one of those industries, along with paper based newspapers and video stores that have a very limited future. We are already seeing this in my suburb where two newsagents have closed down in the last 6 months.
    If the various state based lottery agencies would produce a decent on-line point of sales, the rest of the newsagents (in my area at least) wouldn’t last another 6 months.

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