Circulation should be more profitable

Do you sell copies through the newstrade? Are you making robust profits from doing so? If not, then, err... it might be because you’re not doing it right...

Circulation profitability was the subject of our latest webinar — 7 top tips to optimise circulation profitability — presented by Keiron Jefferies of Warners Group Publications, a magazine publisher and provider of circulation services to independent publishers.

For Keiron, it’s all about profitability. In the webinar (you can watch a recording by registering here), he dispelled a few common misconceptions: that sales equals profit, that cheaper means more competitive, that newstrade distribution is more marketing cost than profit driver.

Healthy profits from the newstrade are there to be made if publishers are sensible about costs (have you spoken to your printer about the most cost effective use of paper?), focus on efficient distribution (based on store-level analysis) and follow a premium pricing strategy.

Here are a few of the messages I came away with from Keiron’s presentation:

• Price up, not down. Being cheaper than your competitors does not drive increased sale — it just reduces your profitability. Keiron presented plenty of evidence to show that premium priced issues outperform standard priced ones.
• More sales does not (necessarily) equal more profit. Printing and distributing additional ‘risk’ copies in an attempt to flush out a few extra readers will marginally increase sales but significantly reduce profits.
• ‘And’ not ‘or’. Publishers know that the prevailing wind is digital, but publishers need to take print readers on the journey, rather than trying to impose their preferred method of content consumption. Reading in print is still valued by many and print’s likely future role as brand flagship means that for many publishers who sell via the newsstand (and via subscription for that matter), offering print and digital is the way forward.
• Break down the silos. It’s common to see newstrade teams working independently of subs teams, and, for that matter, print teams working separately from digital teams. Integration and shared objectives means that everyone can pull together, confident in the knowledge of the role they have to play in delivering a profitable publishing business.
• DDD trumps gut feel. Gut feel shouldn’t be ignored, but nor should it take precedence over data driven decisions. Publishers are not short of data, the challenge is to use it wisely.

As Keiron was quick to point out, many of the pillars of circulation profitability are a matter of common sense, but the fact is that they continue to be overlooked by many publishers, who, as a result, are seeing steadily declining profits from their newstrade distribution.

But... it doesn’t need to be that way...