Data and the gig economy drive newspaper delivery changes
Wednesday, September 18, 2019 8:03 pm
Complex factors are at play as falling print circulations and the 'gig economy' turn newspaper delivery upside down in one of Australia's largest markets.
Nine Entertainment, which owns the Sydney Morning Herald and the Australian Financial Review, has now followed News Corp Australia in announcing the end of delivery arrangements which have been in place in Sydney for decades. But the question of who will take up the job of throwing rolled papers into readers' gateways remains unresolved.
Chief executive of the Newsagents Association of NSW and ACT (NANA) Ian Booth says newsagents had been handing in their delivery agreements back at the rate of 50-70 a year ahead of changes which began with News' June announcement that it was "consolidating" delivery arrangements across Sydney with a single distributor. Nine followed last week with what Booth says was the inevitable decision to end its "existing arrangements" as well.
"There was no way delivery could continue with just one publisher," he says. "Seventy per cent of deliveries had been (News') Daily Telegraph, and while the income for agents was being reduced, the costs would remain the same."
After months of plans and negotiations, News has pulled back from a scheme to set up six regional publication areas across NSW, opting for one distributor for metro Sydney alone serving nine territories, while Nine has approved two distributors.
As the industry segment moves closer to the 'gig economies' of ride sharing and room rental, there are also unconfirmed reports of expat drivers being recruited in India. Whatever the truth of that, there is clearly the issue of moving from the regulated cost base under which newsagents operate - which Booth says requires payment for a minimum of three hours work regardless of how small the delivery task becomes - to one more resembling ride-sharing service Uber.
News' changes are timed for next January, while Nine has told newsagents it is cancelling existing agreements covering home delivery and retail distribution from next March. A letter from Nine says that while it would seek discussions about continuing to sell newspapers in store, it remained committed to the newsagent retail channel for its publications.
The moves have also brought to a head, concerns about remuneration - as publishers move from a percentage of cover prices to a per copy fee - and title to the customer data involved.
Because traditionally newsagents have been just that - agents of the publisher, rather than mere retailers - publishers are keen to get hold of information about delivery customers which, even if it as simple as their names and addresses, holds the key to broader demographic data about property type and potential purchasing habits. This would also expand opportunities - such as remain - for personalised publishing and marketing.
Newsagents cite potential issues over privacy as a reason for keeping the data they hold to themselves, and say many of their customers do not want a direct relationship with a publisher, either out of reluctance to part with payment card details or - as Ian Booth relayed it - "because they wouldn't trust Rupert Murdoch with them".
New specialised distributors - News is working with a new partnership of Fnet and a Melbourne distributor - have work ahead of them before new arrangements start next year. And the possibility, as Booth put it, that Sydney arrangements might follow experience in Brisbane and "go to the eleventh hour and then fall apart".