Cracking it down under

Australians simply love their magazines. They are blessed with a huge range of magazines, both from domestic publishers and from overseas – mainly the UK and US. A typical newsagent would carry in excess of 3,000 different magazine titles – covering every interest category you could imagine.

With annual magazine sales at retail of over 320 million copies and a retail spend of A$1.4 billion, this is modest by UK standards. However, considering there are only 20 million people down under, that’s an impressive sales level; around 16 magazine sales per head per year!

Mature market

The market has always been robust, by global standards, for UK magazine publishers. Australia is the second most important export market (behind the USA). Almost ninety percent of Australians read magazines, a total reach second only to television. However, Australia is a mature market, highly competitive, with little opportunity for top line growth. The market has been relatively flat for some years, with virtually no increase in overall copy sales. Domestic publishers are producing high quality magazines so it is becoming increasingly difficult for overseas publishers to compete in this arena.

Remember that UK magazines are generally on sale in Australia eight weeks after UK on sale – yes, it still takes a long time for those ships to get here! Some UK magazines are airfreighted, however the high cost pushes the retail price up and this is only viable for selected magazines. Product that is two months old, coupled with higher cover prices, means your magazines really have to work hard to get noticed.

It’s not all doom and gloom though! UK magazines do sell very well down under and the Aussie culture does have a strong affinity with the British. Niche titles do work well and despite Australia’s apparent move to republicanism – the royals still sell magazines!

There are a few things you can do to help, and a few things you need to be aware of……

Take an active interest in your export markets and learn as much as you can from your UK distributor – they will generally offer a full export service and will have a wealth of information. Spend time with them, ask questions. As Australia ranks No 2 they will have a good knowledge of the marketplace.

Discuss your circulation strategies with your UK distributor. They are in daily contact with their distributor in Australia and they want to grow sales as much as you do. Your Australian distributor will have excellent local market knowledge and will be able to advise on market conditions, pricing and promotional opportunities. If you are working with the right distributor in Australia, they will have a large database of sales history across many thousands of titles, and will be able to profile your title for maximum exposure and sales potential.

You will generally be exporting relatively low volumes and, as with any sale or return system, the sales efficiencies will be less than what you are used to in the UK. While your distributor will target the best outlets for your category, you need to be realistic with supply levels and your distributor will recommend a tightening of supply or alternatively an expansion to trial new outlets.

While trends often follow those in the UK – don’t take that as a given. The market is very different in Australia and what works in the UK doesn’t necessary work in Oz. Make sure you get the local information.

Covers and covermounts

Covermounts are now just as prevalent in Australia as they are in the UK. Consumers have become less loyal and purchase decisions will be made on the value-add item rather than loyalty to a brand. Unfortunately, some UK publishers decide to send magazines to their international markets without the covermounts. Big mistake! Please – if you are covermounting for the UK – please also include them on your copies for Australia. You will see a difference in sales!

Remember that the cover that works well for the UK market (home grown UK celebrities for instance), may be completely irrelevant for your Australian readers. Some publishers have had good success by publishing their international copies with cover shots that are more relevant internationally. Naturally your international volume will dictate if this is worthwhile for you or not.

Pricing

Due to freight costs, exchange rates and local tax, UK magazines are of course priced higher than local product. The strength of imported magazines lies with niche product, so price sensitivity is less of an issue. Consumers do expect to pay premium prices for specialist imported titles. Some categories naturally will be more price sensitive than others, and this is where you need to work closely with your distributor who can advise on the prices of competitive magazines, both local and imported. Also remember that 10% GST applies to all products in Australia – and (unlike the UK) that includes books and magazines. Your distributor can advise on prices of your main competitors; are you competing with other UK magazines, with American magazines, or with Australian ones? If you think your title is price sensitive, you may like to consider price testing. This could be done at an issue level, or in geographical areas.

Promotions

Spend a little on local promotions. If you want to grow your sales, there are various promotional opportunities available and your distributor can advise on what is best for a particular title. The distributors in Australia deal direct with the retailers (there are no wholesalers) and they can arrange promotions for you; they can even design and print point of sale material in Australia for you.

The retail market is dominated by independent retailers, and they generally have good display space for a large range of magazines. Magazines are generally displayed underneath each other, so the top third of the magazine is visible on the shelf – as opposed to most UK displays where the only visible portion of the magazine is 4-5cm down the left hand edge. In Australia however, the full masthead is visible, so your level of exposure is improved.

There are good promotional opportunities through chains such as Newslink, WH Smith and Borders. However, if you are spending on retail promotions, be sure to measure your results and determine if it’s cost effective for the future. Your distributor can provide this information. POS and merchandising costs can be significant, and it is not always cost effective for smaller volume titles.

Be aware of seasonal factors. Remember, summer down under is at Christmas time. If you are producing a ‘summer special’ and it is not cover dated, then consider holding the copies for six months and releasing in Australia at the appropriate time. Seasonal covers will also have an impact on sales results.

Be realistic. Just because your magazine sells thousands in the UK, don’t expect this from Australia. It is a highly competitive market – seek advice from your distributor and work with them to grow your international sales.

Be aware of the challenges faced by distributors in Australia. Geographically it is huge, and with a relatively small market, it is expensive to service. Distributors in Australia do not have the luxury of charging retailer service fees – the retailers in Australia (around 5,500 independent newsagencies) do not pay to have product delivered as they do in the UK. These costs are borne by the distributors, all of whom are operating on slim margins. Finding a cost effective distribution model is the challenge facing all distributors at present.

The independents

Independent newsagency outlets are the backbone of sales in Australia, accounting for over 75% of retail sales and virtually all sales of imported magazines. The supermarket chains are flexing their muscles more and more; they focus on high volume women’s publications, and many domestic publishers are willing to pay for the privilege. However, the good news for imported publications is the strength of the independents – with a strong network of newsagents all over this very large country. Despite the spread of population, the strength of the newsagency network has meant that subscription sales have remained a relatively small proportion – still only around 5% of total sales for local publishers. Consumers here prefer to browse amongst the large range of titles available. Visiting their local newsagent is a great habit. The newsagent is generally the hub of the local shopping centre and provides a strong community link in country areas.