Distripress is a global association for those hard pressed souls who are engaged in the distribution of press products. Physical distribution sounds like a weird concept when you hear it out of the blue like this, particularly in a world where literally all the talk in publishing is of instant digital delivery of content to phones, tablets and e-readers.
Still in a multi channel distribution market, the largest and by far the most profitable means of bringing publishers and readers together remains through the medium of print.
Every year, between 800 and 1000 people representing publishers, retailers, distributors, wholesalers, consultants and vendors from over 70 countries get together under the Distripress roof to meet each other and to discuss the topics of the day. This event remains the largest and only truly international gathering of print distributors of press products you can find anywhere.
This year, for the first time ever, Distripress was held in Scotland; the venue was the SECC in Glasgow and, as usual, the week started with our Forum Day.
Around 420 delegates and guests gathered in the Lomond auditorium at the SECC to hear 17 speakers and moderators discuss a range of topics. The day started with a show from the Red Hot Chili Pipers and a welcome from Bailie Braat representing Glasgow City and Mark Hollinshead, MD of Mirror Group National Newspapers division.
The morning keynote speaker was Ellis Watson, CEO of DC Thomson in Dundee, who treated the audience to a great mix of humour and industry insight. Although fully seized of the importance of digital delivery and the journey away from print, Mr Watson reminded the audience that digital products represented only around 10% of the press distribution business as things stood today. He urged publishers not to cannabalise their existing business in a rush to digital delivery and if they did enter new channels, they should do it brilliantly or not at all. He underlined though that, as we moved along the road to digital, only the best and most innovative would survive – mere caretakers would not make it through into the new publishing world.
The UK scene
Our first main roundtable session of the day looked appropriately enough at the UK and was chaired by David McIntosh MD of Menzies Distribution in Scotland. The title of the session was “Raising our game – how the UK press is innovating to beat expectations”. After setting the UK scene, Mr McIntosh introduced his first guest who was Jon Bunting, newly appointed MD of Smiths News. Mr Bunting reminded the audience that the UK press industry remained vibrant despite the drop in sales volume over the past five years. He made the point that despite the digital hype, print remains the dominant channel across all customer age ranges and that digital delivery models are immature and yet to show real profits. He made the point that complementary / hybrid distribution and marketing models seemed to be the best way forward.
Stephen Hirst, MD of Marketforce UK, showed the audience that magazine buyers are becoming more discerning and their behaviour is changing. Consumers were buying press products less often and continually looking for value opportunities. Retail footfall remains high with even more regular retail visits, so the opportunity for publishers and retailers to work on creative retail promotions was clearly available. The marketing effort should be focused on increasing purchase frequency of consumers leading to higher sales.
The final speaker of this group was Neil Jagger of Associated Newspapers. He showed how they were using both the MailOnline website and the Daily Mail newspaper to attract and retain differently segmented audiences. This allowed the company access to a much wider customer base than by newspaper alone. By the use of loyalty clubs, discount cards and promotional ties between Associated products as well as third parties like the National Lottery, they were able to retain readers and leverage more revenue per reader.
The US scene
Next we moved over to the US and a session on “The US Magazine Distribution Channel: Pressures and Change”, chaired by John Harrington, consultant and publisher of the newsletter The New Single Copy. Mr Harrington set the US magazine scene by looking at data for retail sales for the past few years and showing that sales and retail revenue were down nearly 25% since 2007. This was also at the same time when magazine cover prices were rising by 30%. It was clear that the US supply chain was under pressure and would have to change but it was not entirely clear what this would lead to.
Mike Sullivan, CEO of Source Interlink, also talked of market transformation. The wholesale distribution company had 30% of the US market and was facing the urgent need to drive out costs from the supply chain without hurting sales. The way forward according to Mr Sullivan, was to use technology and smart merchandising to create an integrated marketing approach for retailers and consumers.
From the publisher side, Richard Alleger, SVP of Rodale, said his company had a mission to create and distribute top quality products through all appropriate channels. He made the point though that, far from direct replacement of print, Rodale saw digital as part of an extended offer to readers. He shared the research insight that 87% of digital readers still wanted a printed copy. Consumers still wanted good value for money regardless of the method of delivery.
The final speaker of this session was Linda Ruth of Magazine Dojo who represented a wide range of publishers but for the purposes of this debate, she was focusing on the experiences of the smaller niche publishers. Ms Ruth confirmed that while large broad interest title sales were falling, the print sales of special interest magazines were rising. The difficulties faced by smaller publishers were seen more in the supply chain as they had a harder time reaching their specialist retail outlets.
Second Keynote
After lunch, our second Keynote speaker of the day, industry consultant Jim Chisholm, joined us. Mr Chisholm shared many facts with the audience from his own research and other sources that were interesting and at times surprising. He said that while 40% of the world’s digital audience read a newspaper online, this was a very brief and low intensity interaction. He also confirmed that digital is having a minimal affect on newspaper sales and share of media spend. The challenge for publishers was to provide the content that was relevant to their readers – smaller editions like the Independent’s i or more targeted personalised or locally printed digital products which carry greater relevance.
The rest of the Forum day was in the hands of another well known industry character, Jim Bilton of Wessenden Marketing. Mr Bilton had created two sessions, the first focusing on how we were working smarter chasing press consumers and a final session on the need for smarter data in the supply chain.
Why all the gloom?
To start the segment off, he introduced Tom Fender of H.I.M research in the UK. Mr Fender was an expert on FMCG category research and he found himself baffled by the doom and gloom emanating from this publishing gathering. He suggested that we looked at other product categories like alcohol, tobacco and food before we got too depressed about our industry. He made the point that publishing was not facing statutory minimum unit pricing like booze or going dark in plain packaging like cigarettes. He felt that, by and large, the solutions to the ills in our business were in our own hands. Amongst many good points he challenged us with was, why it took 6-8 weeks to receive a magazine after a customer opened a new subscription.
The publisher perspective in this session was given my Vivien Mathews who is a UK media consultant. Ms Mathews confirmed that monthly magazines were proving the most resilient category and that there has never been a better time to be a discerning magazine consumer in one of the liveliest and innovative magazine markets. The retail opportunities for sampling or multiple title purchase were common and the increased use of social media like Facebook and Twitter helped to get press products sampled.
Next we heard from Narain Jashanmal, GM at Jashanmal Books in the UAE. In a fast paced and fascinating whirl around the retail channel, Mr Jashanmal shared many interesting insights. He suggested that we need to offer magazines in the stores where young people shopped and that we needed to harness the available technology to appeal to new readers. He also made the point, as had been made by Linda Ruth, that niche publications like Monocle who create a product buzz are more protected in tough sales markets.
Supply chain data
The last session of the day centred on data in the supply chain and with the help of experts from the US, Germany and Poland we were able to learn more about the collection, use and sale of data in press markets.
Gil Brechtel, President and CEO of MagNet (Magazine Information Network) shared the history and philosophy of his company and of data flow and ownership in the US supply chain. MagNet was formed 12 years ago by the major US wholesalers for the purpose of securing and leveraging the industry data flow. This is now a central industry repository of information, which can be accessed by industry players in a consistent and accurate way.
The collaborative industry approach was also in evidence in Germany as we heard from Gertrud Schaeffer, MD of Premium Sales Germany. Ms Schaeffer outlined the key elements of EHASTRA, a retail sales data analyser which helps publishers understand the geography and seasonality of their sales.
The final formal session focused on Poland and was given by Luiza Wozniak, MD of Europress Poland. Ms Wozniak made the alternative point that there was a big danger in having a central repository of data if it became expensive for customers and partners to access it. This had driven Europress Poland to create their own sales information system which can then be offered to their publishing customers. Ms Wozniak finished by making the excellent point that data on its own was useless and it was only the human mind and interpretation that made it valuable.
Jim Bilton wrapped up the day with an excellent summary of the sessions and key points raised and finally he left the audience with three numbers:
1. 10%, which is the current percentage of publishing turnover that is digital and therefore we are the custodians of the 90%.
2. 1%, which is Amazon’s margin on sales, yet doesn’t prevent profitability.
3. 70%, which is the fairest measure of optimism in our business. Any higher and you are either very lucky or losing touch with reality and any less and you are probably already in your mental campervan enjoying early retirement in New Zealand.
All presentations are available on the Distripress website and many thanks to our blogger Lisa Scott for her notes on which I have depended heavily. Forum Day/Smart Monday will take place next year on Monday October 7th 2013 at the Sheraton Hotel, downtown Toronto, Canada.
