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New Channels for Regional Papers

With circulations in decline, publishers have been experimenting with a range of new strategies – from multi-platform publishing to free distribution models. Many have also been looking at the potential for newspaper sales outside of the traditional newstrade. Andrea Kirkby looks at these new routes to market.

By Andrea Kirkby

Publishing a regional paper used to be a comparatively simple process. You got your news, you printed your paper, and you pushed it out through the newsagents. More recently, supermarkets started taking a share of the market, but the essential structure of the distribution network was unchanged.

Now, the traditional model is being challenged on all fronts. Newspapers have been losing media share to radio and television since the 1970s. Now, multi-channel television is taking an increasing slug of the audience’s time. Even more significantly, the internet is putting pressure on circulations by offering readers another way of getting their news.

Many papers have responded by adopting new routes to market – bypassing the traditional sales outlets. Free papers like Metro and London Lite are highly noticeable on the street – but paid-for newspapers too are adopting non-traditional channels in a bid to reach new readers in new places. "It’s the same strategic impulse that is driving the free papers," says Austen Dack of Adprom.

Society has changed, too, particularly in the patterns of where people live and work, and how they get there. Austen Dack believes that "newspapers need to be where the people are - and where the people are has changed dramatically over the last 15 years."

Out-of-town development of business and retail parks, city centre apartments, the ‘24/7’ society – we all live very differently from the way we did twenty or thirty years ago. And, according to Paul McGarr, of media buyer Zenith Optimedia, the task of the publisher is very simple - "The key is to give people products that they want and when they want it." In practice, of course, it’s not quite so simple.

Vans & tricycles

Lynne Anderson, communications director of the Newspaper Society, says quite a number of newspapers have adopted innovative approaches, "from vans going out to business estates and places like that, to vending machines and sales in coffee shops." Over the past couple of years, various different approaches have been trialled. The Liverpool Daily Post has tricycles going out to different pitches – because they can move about, picking the busiest spot for each time of day, they do better than street sellers.

The Warrington Guardian now uses a mobile vendor with a van, who distributes to retail and business parks. Readers on these sites would otherwise have to buy the paper on their way to work – there are no retail outlets nearby. Distributing to these outlets is hardly revolutionary – it’s done well enough for sandwich firms – but making it work for papers takes longer. The service was introduced in 2005, and it’s now gradually gained regular business customers for the weekly paper. Kath Gee of the Warrington Guardian says, "Our mobile vendor sells on average 130 copies per week - these customers have now become regular purchasers every week."

But, she warns, it’s easier to sell to smaller companies – larger companies often won't allow unauthorised personnel on the premises and are more difficult to persuade.

Coffee & furniture

Austen Dack believes sales through coffee shops and take-away food outlets can work well; customers are in a situation where they may well want to take a paper back to the office with them. Or they are sitting in the coffee shop, with half an hour to kill and nothing to read. What better time to have a newspaper available for purchase?

He says, "We did a Norwich airport promotion with the EDP that worked quite well – a joint promotion with the coffee shop. That type of partnership can work," particularly where there is a special offer involved.

But the Yorkshire Post has even managed to work its way into the furniture sector with an IKEA promotion. Carole Clarkson, product marketing co-ordinator for the Yorkshire Post and Yorkshire Evening Post, says, "I was looking for more non-traditional outlets to send my team to," and this one certainly fits the bill.

Both IKEA and Homebase have worked well to deliver sales for her team. She says IKEA was selling "around 250 copies a day" - comparable to a good newsagent. But the initial promotion did involve a give-away – IKEA was launching a new home range, and promoted its shower gel with sales of the newspaper.

One great advantage of such outlets against a supermarket or CTN is the fact that the regional doesn't have to compete with other newspapers. For instance, the Black Country Bugle, which was introduced into the Black Country Museum’s shop and cafe in March 2005, was the only newspaper on site. Most coffee shops, too, will only have room for a single newspaper on the counter.

Reaching the affluent young

Mark Rix, managing director, MEN Media Sales, says that non-traditional outlets have their place within a part-paid, part-free strategy, too. Dump bins in the station or vendors in the street outside are no longer state of the art. "We haven't done trikes – we’ve considered them, but currently we’re concerned with handheld distribution and pickup points in the city centre, in offices." Distribution into office space, he says, reaches readers other methods don't.

"Part of our strategy in the city centre was to engage with non traditional newspaper readers. They tend to be affluent young people and obviously most of them work in offices so that’s where we try to get hold of them." He notes, too, that more copies are picked up outside when the sun is shining – but when it’s raining, office distribution really comes into its own.

MEN now delivers papers to Royal Bank of Scotland, CIS Insurance, and Manchester City Council. And his next target might well be outside the centre, since he notes there are 100 business parks in Greater Manchester – many with no newsagent or supermarket nearby.

He believes that, whereas some papers see non-traditional sales as purely tactical, in fact, such sales need to be part of the overall strategy. "The key to success is identifying geo-demographics that are low in sales, but high in incidence of your desired new reader," he says.

That’s certainly the case with paid-for titles, but the fact that MEN is part-free makes it even more crucial. "Your reader profile has to be as good if not better than the paid-for title," he warns.

Vending machines

One non-traditional outlet that seems to be missing from the UK’s newspaper landscape is the vending machine. In the US, according to Michael Ison, managing director of the Journal Vending Company, there are over a million newspaper vending machines – and there are ten thousand in Germany. Even Spain and Switzerland are falling for the charms of the machine, but here in the UK there are very few.

One reason for this has historically been problems with the reliability of the machines. That’s particularly the case with daily papers. If a chocolate machine isn't vending, the chocolate can be sold the next day – a daily newspaper can't.

Maintenance costs money, too. Then there are cover mounts and extra supplements that often jam older vending machines. And, if you don't have these, but an elegantly thin newspaper, it’s quite possible that the machine will spit out three copies every time a customer tries to buy one. Austen Dack of Adprom sums up: "There are very few people who are turned on by vending machines – they’re too difficult to look after."

No wonder Michael Ison describes newspaper vending as "a bit of a Holy Grail for many publishers." So far, it’s a Holy Grail that almost everyone has been looking for, and no one has managed to find.

But he believes things are changing. His company is about to launch a new machine which has almost no moving parts – which means less can go wrong with it. Reliability should be dramatically improved. Machines have also become cheaper, particularly in the case of bulk orders. And the Audit Bureau of Circulations is now happy with the data the machines are producing.

Besides, Michael Ison points out, newspapers already have teams of merchandisers working on their behalf, who can top up vending machines at the same time as they serve their other outlets.

The economics stack up, he reckons. A machine can be provided for about £20 a week, including installation and maintenance. That compares with £160 for a street vendor – who admittedly will sell more copies. But the machine can still gross £60 a week, more than paying its way.

Smart cards

What gets him really excited, though, isn't the simple business of providing newspapers. It’s the possibility of smart card based vending. Over 10 million Oyster cards have now been issued, giving London, at least, a huge user base. Using smart cards, newspapers will be able to identify who is buying from which machine – data that both canvassers and advertisers can use.

Newspapers could even use smart cards distributed with the paper to manage promotions, or create limited period subscriptions. It’s not surprising that Michael Ison says, "We’ve seen a huge rise in enquiries over the last six to nine months."

Whether that translates into large orders remains to be seen. Michael admits that though "all the major regional paper groups have dabbled, no one’s done it in a major way."

What Michael Ison says of vending machines could be applied to non-traditional sales generally. Most papers are still using new outlets tactically, and sales through newsagents and supermarkets continue to contribute the lion’s share of revenues.

Lynne Anderson says, "A lot of regional papers dabble a bit here and there, but people will try out just about any route these days." With many papers seeing continued declines in circulation, one might be forgiven for seeing a certain desperation in the way some have approached new outlets.

Worth the bother?

Austen Dack says of such initiatives, "They’re all on the tactical side." He believes many of them don't contribute enough revenue to be worth management time. They may be useful in winning new readers – but sooner or later those readers are going to have to get used to getting their paper from a more usual outlet.

Besides, such sales aren't free; they come at a price. "There is an opportunity cost," he says – "not just petrol and the van but most importantly time." If regional papers allow their service to newsagents to suffer because they’re chasing other sales, the effort will be counterproductive.

For instance, a B&Q coffee shop might make 25 to 30 sales a day, he thinks. That compares to "a good few hundred copies through a small newsagent, if they do rounds." So, any paper that is hoping to increase its circulation through cafes or work canteens is going to have to serve eight or ten small outlets instead of one large one. Even worse, a single coffee shop might, at least initially, require just as much work from the merchandising team as the newsagent.

However, according to Kath Gee, a disciplined approach can deliver well. "Our mobile vendor only works five hours a week, all on publication day, and at the moment it is cost effective for us," she says.

Multiples can also be difficult for regional papers to approach, particularly for smaller groups which might only have one store within their target area. National multiple are unlikely to be enthusiastic about a patchwork of different agreements with individual local papers. It’s much easier for a national newspaper, like the Times, which has started selling the newspaper through Starbucks.

Still, there are rewards for those papers which are willing to put the work into developing new channels. It’s not a short term fix, says Carole Clarkson, but it helps protect sales. "Obviously the circulation figure is paramount – the cost isn’t irrelevant, but it does make that bit of difference between hitting the budget or not. We’re getting an extra 8,000 copies a week" from new outlets, so the development programme has definitely worked.

She is a strong believer in developing circulation through taking an innovative approach. "All publishers need to look at non-traditional distribution," she says.

However, it can be difficult to tell whether sales made through these new channels are genuinely incremental sales, or whether they are just cannibalising revenues that otherwise would have gone through the traditional distribution network. Are newspapers gaining genuinely new sales?

Michael Ison is careful not to make promises he can't keep. He says of vending machines that, "We think it’s an incremental sale, but until we roll out our new data-rich smart card vending machines, we don't really have the statistics." While a vending machine may be selling papers before the newsagents are open or after they close, it may simply be competing.

So, given the possibility of cannibalisation, and the difficulty of getting new outlets up and running, why bother?

Quality, not quantity

Paul McGarr, regional press director at media buyer Zenith Optimedia, believes regional papers have no choice. He believes they have to keep abreast of social change, to reach a more affluent demographic that is based in city centres. And he echoes many of Mark Rix’s words when he states that "reach of this broader, perhaps younger demographic, will be necessary to maintain the longevity of readership required for a successful business model," he says.

According to him, the cannibalisation issue is a red herring. It’s not circulation numbers, but the quality of that circulation, that needs to be revived. "I think the strategic imperative is not simply to increase circulation generically. This in itself is not enough. A new distribution method that helps reach a different demographic is more attractive."

So, faced with an aging readership, publishers need to adopt new ways of getting newspapers to the elusive, time-poor, but affluent younger reader. Non-traditional distribution can help to deepen the newspaper’s reach within its region, by adopting a targeted approach – finding the places where the new readers are, rather than trying to attract them to existing outlets.

But it’s only one of a number of ways of deepening media reach – Paul McGarr says that "a targeted approach is needed, and that can be through multi-platform offerings such as niche magazines and websites, or ensuring the specific distribution of the product to the targeted demographic." Papers that concentrate on new channels, but don't think seriously about digital media or niche products to serve their local audience, could find themselves caught out.