Home' The Channel Magazine : June 2011 Contents The newspaper business model,
largely unchanged for a century or
more is challenged and sometimes
conquered in fundamental ways.
Courage exists within all major newspaper
publishers to meet new competitors head-
on, new ideas and the transformation in how
society consumes information.
The audience for our journalism has
never been larger but increasingly fewer
people are flipping coins across the counter
to pay for it.
We feel this pain. And newsagents do, too.
Our faith in newspapers is unshaken.
They will continue to be valuable and viable
businesses... but they will be different in a
myriad of ways.
Investment in printing plants
More than $800 million has been spent
on new and rejuvenated printing presses
across Australia in the past three years
by the four major publishers — News Ltd,
Fairfax Media, APN News & Media and West
These companies continue to spend
more than $50 million a year* on product
promotion, tipping dollars into everything
from TV ads to large-scale community
events, such as the Sun-Herald’s City-to-
Surf fun run.
Enormous efforts and millions of dollars
have been invested into The Readership
Works, a body established to help provide
ad agencies with the best possible data
about readers and wider digital audiences.
Our business model, of course, relies on
an additional factor to generating sales:
that our readership demographic can
Investment in marketing
Millions of dollars of marketing funds are
continually spent in metropolitan markets
to promote local titles, as well has enhance
the quality of the product with newspaper-
The big Melbourne newspapers — the
Herald Sun and The Age — in April invested
more than $2 million combined to increase
sales, leveraging the start of the AFL football
season and the local comedy festival.
Newspaper boys and girls were
positioned across the city centre, as well
as Flinders and Spencer street stations,
to build brands and ignite the newspaper-
buying habit again.
As newsagents appreciate from
evaluating the habits of their own
customers, this marketing challenge
The necessity for newspapers to restructure
has long been obvious and whilst the
newspapers can still profit from publishing
online, newsagents are essentially left out of
this if the print product declines substantially.
Retail newsagents will lose traffic flow and
distribution agents could lose everything.
Newspaper publishers are talking up the
life of the printed paper whilst scrambling
to build better online offers. Fairfax Media
Chairman Roger Corbett told the Australian
Institute of Company Directors in May that,
although not all media companies would
survive the current challenges of a cyclical
downturn and new technology, Fairfax
would be one of the survivors.
He commented that, “Rupert [Murdoch]
has been a master of diversification; he
has made some terrible mistakes, but if
he didn’t make them then he wouldn’t be
where he was today.”
Corbett said his personal view was that,
despite the challenges of the internet, good
newspapers would survive. “I think most
people read quality newspapers in order to
get a point of view,” he said.
Fairfax CEO Greg Hywood agreed saying
that some newspapers may go but many will
survive as they had new advertising models
based upon real estate advertising, display
advertising, branded employment advertising
to compensate for the loss of classifieds.
He suggested that newspaper readers
would continue for some time as the
average age of readers of metro papers is
about 40-plus who enjoy the experience
in the morning of reading the newspaper.
The online smh.com.au reaches a younger
audience – more like 25-50-year-olds.
How must distribution restructure?
Once the basis off newspapers, home
distribution is facing its own challenges.
Distribution businesses have been
restructuring for over ten years as small
rounds have merged and specialist
distribution agents have bought-up
territories to create distribution territories
with some economies of scale.
Agents with specialised distribution
business are able to efficiently manage
the process for a profit but do they have all
their eggs in the one basket?
South Australia leads the way... but where?
Home delivery systems vary from state to
state but South Australia has long been the
Not all media companies would survive the
current challenges of a cyclical downturn
and new technology
‘Restructure Renew Revive’ is the theme of the ANF Newsagency
Industry Conference in August, and restructuring has become a
focus of an industry beset by structural change. The industry is
changing at a rapid rate and it is up to each newsagent and their
representative bodies to look for new ways to prosper.
16 National Newsagent June 2011
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