Australian newspaper and magazine publishers have had access to a newsagency system over the decades that helped support a thriving publishing industry.
While the move to digital has changed the way the newsagency operates, there is vigorous debate about how much that retail channel has declined.
ABC News published an item yesterday under the heading “Newsagencies in decline as demand for online content outstrips print media”.
Country newsagency doing it tough
The feature profiled the Mansfield newsagency and the owner’s attempt to find a buyer.
Owner Frank Livingstone told the ABC the Mansfield newsagency has been on the market for two years but hasn’t had any takers.
“We haven’t been able to sell it and so we’ve just decided that when our lease is up we have no option but to close it down.”
The feature notes when the Livingstones leave, Mansfield won’t have a newsagency anymore.
Livingstone added the demand for online content and news has affected the industry.
“The digital side of it has greatly reduced our circulation,” he said. “You know, like holiday weekends years ago, we would order 2,000 newspapers. We’re down to about 350–400 at the moment.”
The ABC also speaks to an industry analyst from IBISWorld: “Over the past five years, about 300 newsagents in net terms have left the industry,” Andrew Ledovskikh said.
He explained newsagencies have diversified by offering lottery sales, gifts, collectibles, and convenience products.
But gambling and lottery tickets have now also moved online and “that’s starting to kind of pinch into the industry’s revenue,” Ledovskikh said.
How many newsagents are there in Australia
The number of retailers is hard to pin down because of a number of agencies, sub-agencies and lottery agents that look like newsagencies. IBISWorld quotes a figure of 1,784, software supplier Tower Systems said last November: “The [newsagency] channel remains the biggest independent retail channel in Australia with 2,500+ retail outlets.”
A number of other estimates have the number around 3,000 or higher.
There is no dispute the numbers have been dropping and that the industry has been facing tough times.
Mark Fletcher speaking at industry conference
Things aren’t that bad
Tower System supplies software to specialty local retailers, including newsagencies. Its owner Mark Fletcher also operates several newsagencies and knows the industry very well.
Fletcher has hit out at the ABC assumptions made about the sector using the Mansfield retailer as an indicator of the retail channel.
“The story fails to adequately report on the state of Australian newsagencies,” Fletcher wrote on his influential Newsagency blog.
“While there have been newsagency closures, the numbers are not huge, not as big as we have seen in some other real channels.
“The ABC News story fails to properly investigate why there have been closures. Instead, they publish the cliche of the decline in print media as the cause, which it is not.”
While expressing sympathy for the predicament the profiled retailer finds themselves in, Fletcher asked if the retailer had adapted to the changing demands of customers: “I feel for the folks at Mansfield Newsagency. It was a nice shop in a beautiful country town with a population close to 5,000. The shop feels like it’s from the 1990s, not today.”
Fletcher and his Tower Systems business offer support for newsagencies and his blog provides many examples of successful transformations of businesses.
The falling demand for print products has seen a long and gradual decline in the number of customers visiting this retail sector.
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How the newsagency business model could look
“A typical country town newsagency today should be making less than 10% of their turnover from print media products, 30% of revenue from lottery commission and 60% from gifts, homewares, books, toys and more. That is, 60% of revenue from items delivering 50% and more gross profit.”
Fletcher has long been a critic of the support newsagencies received from publishers over the years. But he notes it should not be the reason for a failing business.
“You can’t blame the decline in print for newsagencies closing. Newsagents make a paltry margin from print products. It’s disrespectful, and embarrassing how little we make. A business closing because of this is a business rooted in the past.
“Smart newsagents started transforming their businesses 20 years ago.”
Fletcher finished with a final blast for ABC News:
“If the folks at ABC News did even basic research about the future of Australian newsagencies they could have provided more accurate reporting on the state of newsagency businesses in Australia.
“Do better ABC News.”
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