Saturday, 28 August 2010

Plummeting sales explained

IF you want to know why newspaper and magazine sales are plummeting, as shown by the release of Audit Bureau of Circulations (ABC) figures this week, you could do worse than go and talk to your local newsagent.
One of the victims of the bean-counter regime that bedevils publishing companies these days is the department responsible for maximising copy sales (as opposed to advertisement sales).
They have been stripped of all power and influence in most companies, and in one memorable period during the demise of Westminster Press, closed down all together.
The accountants’ thinking was that it was a waste of time selling more papers, as that only cost more money than it raised in revenue. The ideal scenario seemed to be to sell as few copies as possible, then you would keep delivery, merchandising and newsprint costs down to a minimum.
The fact that advertisement sales, not to mention the confidence and morale of the whole industry, depended on a healthy vibrant copy sale seemed to escape them.
To be fair, most companies drew back from the most draconian of cuts to circulation departments, but the muddles and self-destructive thinking continue, as illustrated by two examples from my newsagent today.
I needed to buy a copy of the weekly Lancaster Guardian, part of the national group, Johnston Press, which was this week crowing about growing its profits (if not its revenues) last year, for the first time for years.
The Guardian says it comes out on Thursday, but on Thursday morning I was told it doesn’t reach the newsagent until some fluctuating time on Thursday afternoon.
Friday I was away from its circulation area, so I went first thing Saturday morning only to be told it had sold out. I remonstrated with the newsagent, to be told that the Guardian had just changed its returns policy so the agent is only allowed to claim for 12% of its returns.
Because newspapers have such a short shelf life and such unpredictable sales, outlet by outlet, most publishers allow agents full sale or return, otherwise the agents have no incentive to stock enough copies to satisfy high demand weeks. Some offer 50% returns to encourage sensible ordering policies by the agents. But 12% is unusually low.
The previous week this agent had been left with ten unsold copies, only one of which she was able to claim back the wholesale price for. So she cut the order by five, and sold out within 24 hours. Because it was the Bank Holiday it was going to be next Tuesday before she could order more. I told her to forget it.
The paper used to sell 40 copies a week at this outlet on the fringes of its circulation area. Now it sells 28, a 30 percent drop. ABC shows the Guardian selling an average of 14,517 copies a week from January to June 2010, a decline of 2.9% on the same period last year. Now you know why.
It’s got nothing to do with the quality of material, even though it has recently lost its editor and news editor without apparently replacing them. It’s the curse of the bean-counters.
At the same newsagent’s shop there was a magnificent display of Cumbria Life, a monthly magazine produced by Carlisle-based Cumbria Media Group. This is one of those quaint family-owned independent firms, usually much more in tune with sustainable products and less obsessed with lining shareholders’ pockets than the big groups. But even they are not immune.
The September issue of Cumbria Life has a splendidly written feature on the village in which the newsagent is based. But had the publisher seen the opportunity? Not a bit of it. They hadn’t even told the newsagent.
He spotted it by accident, mounted the display, and consequently expects to sell ten times as many copies as usual, and sure enough the whole village has been talking about the article and therefore the magazine.
What a brilliant sampling opportunity. But if the newsagent hadn’t been on the ball that opportunity would have been lost. It seems even Cumbrian Media Group has forgotten the basic skills of selling and marketing its products. No doubt the bean-counters would be proud of them.

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