Home' The Channel Magazine : July 2010 Contents 22 National Newsagent July 2010
"If 2009 was a financial crisis, then
2010 represents a wholly different
type of crisis -- an innovation crisis.
The question being raised now is about
where we find our growth. It's about
extending brands into new areas and
finding new ways to engage audiences.
In 2009, all that was put on hold....It's a
challenge for all of us. Those who fail to
innovate may struggle."
Iain Jacob, Chief Executive EMEA,
Starcom MediaVest Group
Jacob was talking about UK magazines
and the media in general but his words
hold true for the newsagency channel.
In Circulation Briefing, UK analyst
Jim Bilton looks at industry trends and
influences and the pressures on the print
industry and those who retail newspapers
UK Magazine 2008/2009 trends
The year-on-year shifts illustrate some key
movements in general shopping trends:
• Much of Tesco's growth is coming from
its Express outlets as convenience retailing
generally continues to rise in importance.
• The High Street operation of WHSmith
continues to see its share edge down,
although this is at a much slower rate than
in the past. Travel remains the growth area.
The high street location remains a difficult
sector across the retail market generally
with reduced traffic and frequency of visit.
• The big five supermarkets now account
for 33.8% of total magazine sales up from
32.5% in the previous year.
• The biggest share drop at almost -2% year-
on-year comes from the independent sector.
Newspapers versus magazines
There are very distinct retail profiles of
newspapers and magazines.
• The key difference is the massive
importance of the independent retailer
for newspapers (61% of RSV) as opposed
to magazines (27%). The share taken by
the independent sector continues to slide
relentlessly for both product categories,
but it is still much bigger than in virtually
every other FMCG category.
• While the major supermarkets have
become much more important to
newspapers, especially at the weekend, the
share taken by the top five grocers is still
much lower for newspapers (16%) than for
• WHSmith is much less important to
newspapers (3.4%) than for magazines
• It is the more traditional CTN format
which is still the bed-rock of newspaper
sales with chains such as MMRG having
a much bigger share of the newspaper
WHSmith leverages its shelf space
As part of its long-term strategy of
increasing margins across all product
categories, WHSmith has been trying to
leverage more margin from its magazine
space via two main routes: additional
promotional spend and bookazines (one-
off or limited-life publications with high
production values and high cover prices).
While neither move is new, the retailer is
currently pushing down both routes in a
more structured and determined way than
ever before. With WHSmith High Street and
Travel collectively accounting for 14.5%
of all magazine sales and for up to 50%
of many specialist titles, their strategy is
massively important to the whole industry
and is worrying publishers greatly at the
moment, who are looking at how to reduce
their reliance on the WHSmith channel if at
For those titles unwilling or unable to meet
WHSmith targets, it has been threatening
to delist or downgrade the magazines.
This threat seems to be being followed
through more consistently than ever before,
but does actually come at a time when
magazine space in smaller WHS outlets is
under more pressure due to the growth of
bookazines and of other categories, notably
What publishers are thinking
Bilton said that to an outsider, the recent
Periodic Publishers Association (PPA)
Conference might have seemed dominated
by digital topics at the expense of print. Yet
to industry insiders, the primacy of print
was such a massive given that it did not
need to be spelled out explicitly. However,
grappling with the disruptive impact of the
growing digital channel was the key topic
as delegates debated the possible shape of
an unpredictable future.
"The certainties and stability of print
media are being eroded. New competitors,
new technology, new consumption
patterns all mean that the future is
unforecastable and belongs to those who
are constantly testing and experimenting
while holding on to traditional business
models that still generate money.
"Offline activity still accounts for 85%
of consumer magazine industry revenues.
Print is most definitely not dead, but it has
to change and adapt, augmented reality
applications were a recurring theme.
"No one single publisher is big enough
to manage the full multi-channel future
on their own. The magazine industry is
not big enough to shape the future of
digital content on its own. There will be
some unlikely alliances ahead to make a
profitable future a reality."
Those who fail to innovate may struggle
The future is unforecastable and
belongs to those who are constantly
testing and experimenting
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