Home' The Channel Magazine : JUNE 2010 Contents 18 National Newsagent June 2010
With circulation under pressure and
commission rates being squeezed,
distribution newsagents are less than
happy with the current system. There are
pressures in every state for change, for
unless the system is sustainable for all
parties it won't continue.
There is no doubt that newspaper
publishers need the home delivered copy
in the foreseeable future; there is no doubt
that they will not find a cheaper alternative
than the newsagency channel but
publishers are under pressure from falling
Already agents are combining territories,
developing super rounds and finding ways
to add efficiencies.
There are many questions to consider
• What is the future for home delivered
papers in the next five to ten years? (And
where does that leave the investment of
• Do the newspaper publishers want to
keep the newsagency channel involved in
• Will publishers put newspaper
distribution runs up for tender?
• Is the 25% commission with 12.5% to
retail split sacred or will consumers have to
pay more for this premium delivery service
to their doors?
• How should cost of delivering the service
be measured and remunerated?
• How will OH&S requirements be met?
• Will flat wrap become the norm?
• Is there a minimum territory size to attain
economies of scale?
Fun and games in South Australia
As the testing ground for many initiatives,
South Australia is once again the focus of
News Limited's attention regarding home
Separation of round and shop is the
norm in South Australia and over a decade
ago it was anticipated that the depot model
would demonstrate to other states that this
was a more efficient way to manage home
There is change in the air for the newspaper distribution model
Over the years the depots have not
evolved and the current practices mean a
number of newsagents share a shed but
operate independently -- each has a rolling
machine, truck, accounts for each territory
-- in other words there have been few
economies of scale.
Now News Limited wants to migrate
all the customers to their system;
newsagents object to the loss of contact
with their customers; costs are rising,
income is falling and agents are unhappy.
Adelaide Newspapers (APNL) is now
working with agents to find a sustainable
Flat wrap in Tasmania
Some Tasmanian customers have enjoyed
flat wrapped newspapers for over 15 years.
According to The Examiner's Circulation
Director, Rob King, there is no doubt that
customers prefer flat wrap but the change
to flat wrap has not been without its
The Examiner purchased four delivery
rounds some years ago and delivers
tri-folded papers to its customers. The
drivers report that it is quite OK to throw
the papers but early on they had to get out
of the vehicle on occasions when the paper
'didn't fly', King said.
An offer to deliver ready-wrapped flat
papers was made to newsagents in 2008
but few took this up as they had already
invested in their own roll wrap machines
and preferred to throw rolled papers.
In the North and North East of Tasmania
almost seven out of ten adults read The
Examiner and 53% of total sales are six
to seven day subscriptions managed by
newsagents. It is a very high penetration rate.
King said The Examiner was not looking
at purchasing any further rounds. "We will
leave delivery to the newsagents," he said.
For the time being customers will
continue to receive either rolled or flat
papers and only when the customer
pressure demands flat wrap is this likely
to change, unless consumers adopt the
new iPad version which The Examiner is
preparing to launch.
Wet paper issue
Not all customers in the North East are
delighted with their flat wrapped papers as
there are issues with rain.
When the paper lands on a hard surface,
tears or pin holes in the plastic can result,
water seeps in and the paper ends up
wet. (There are quite a few rainy days in
King said drivers need to try to throw on
the grass for a softer landing on rainy days.
In the North West The Advocate is
delivered pre wrapped and newsagents
report that flat papers are difficult to throw.
One agent reported that he has had over
30 cancellations with customers saying
they would prefer to come into the shop
and pick it up rather than deal with a wet
paper. "It's not unusual to have 30--40
papers returned on rainy days," the agent
However, a new green plastic has been
trialled and was introduced on 3 May which
appears to have improved the condition of
Circulation Manager, Rod Tremayne,
said that The Advocate had almost reached
its capacity to pre-wrap papers and the
remaining agents have chosen to continue
to roll wrap and throw.
"60% of The Advocate's total circulation
is home delivered so this is a significant
part of our market. People in Tasmania
generally have shorter commute times and
thus have more time to read the paper in
the mornings," Tremayne said.
It's not unusual to have 30-40
papers returned on rainy days
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