Newsagents traditionally receive around 25% of the price of a newspaper as their commission on the sales; insiders say itâ€™s not a huge profit centre but the idea was that it would attract sufficient traffic to help sell higher margin items.
But as part of Fairfaxâ€™s desperate efforts to keep the haemorrhaging Age newspaperâ€™s sales from plummeting, they have offered what is considered in the industry an insanely generous offer to newsagents which is â€“ on top of the commission already in place â€“ to give them $1.50 for every copy of the Saturday Age sold.
At this rate, with the cover price is $2.50, newsagents could make as much as $2.12 a copy, Fairfax might end up paying people to take the newspaper away, a reversal of the traditional economics of print since the time of Gutenberg.
It comes at a time when the newspaper has Indian students going door-to-door offering subscriptions at either very deep discounts or for free. One resident in the Moonee Ponds area told VEXNEWS yesterday that a polite but pushy Indian student salesman from The Age had knocked on their door persistently to offer them the newspaper for free for six months in addition to a free copy of the Good Food Guide. He took the deal but is no woken every morning around 5am by the thud of the unwanted journal. They arenâ€™t reading the paper and it goes straight to recycling, he explained.
These stories are speading across Melbourne like wildfire.
Fairfax insiders say this is part of a ploy to make the re-launch of the Saturday Age more successful than it has actually been. Aside from missing big stories and losing their much-advertised Andrew Rule to their nimble opposition at the Herald Sun, it has apparently not really gone as planned.
The main reason many people used to buy the Age on Saturdays was because of its classifieds, where it once dominated employment, real estate and automobile markets. In the days of print this was a natural monopoly. That era has passed, the rivers of gold have dried up, diverted into online alternatives Fairfax could have bought on the cheap at one stage but didnâ€™t.
So the Saturday Age â€“ which used to be the only profitable day The Age had â€“ is now in terminal decline. And it seems no amount of re-launches or bungs to newsagents can save them.
The print edition cannot long endure. And whatâ€™s best is they know it. Some of their best journos are leaving, occasionally made offers by their rival, very few now choose to stay in the Media House crypt.
Newsagents can smell their fear and desperation and far from leading them to want to dedicate themselves to establishing shrines for the sale of the Saturday Age to collect their $1.50 kickback, they are just quietly adjusting to the idea that it isnâ€™t long for this world.
UPDATE: Check out this very ugly chart of The Age’s parent company, Fairfax (ASX: FXJ) prepared by a member of the famed VEXNEWS Investigations Unit embedded in the wonderful world of the financial markets.
It reveals soaring levels of “short-selling” (where investors are speculating the share price will fall) in the stock and a simultaneously plummeting share price. Leaving aside our normally enthusiastic hyperbole, this is clearly not good and shows that the financial markets are well aware that Fairfax’ key metropolitan newspaper assets might not be worth very much at all.