Hundreds of magazines face the ax in Australia

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SYDNEY -- Hundreds of magazine titles are about to be axed from Australian newsagencies as the industry embraces two new category management systems designed to protect newsagents from having dead titles dumped on them.

The Australian Newsagents Federation has thrown its support behind one of the category management systems, developed in the U.S. by Time Inc., which has already found that 80% of magazines sold through newsagents account for just 20% of revenue.

Simultaneously, a rival category management system is being introduced by magazine distributor Gordon & Gotch, which is about to announce it will cut 117 international titles from its distribution channel because they don't sell.

While the two systems of category management are different, both aim to achieve maximum efficiency by selling titles that reflect the customers of individual newsagents.

Newsagents have long complained of magazine over-supply, usually with international titles being dumped onto the Australian market. Since 1990, 600 new magazine titles have launched into the Australian market each year.

The ANF system, based on scanning data retrieved from the point of sale, paints a picture of which magazine titles sell best for different types of newsagents. Census data and information from market research company Geospend have been used to draw up five different clusters to give newsagents a clearer picture of what kind of customers they must cater to.

The five clusters include Rural Battlers, Real Suburban, Successful Urbans, Established Suburban and Cosmopolitan Australian. The clusters are interfaced with sales data retrieved from the point of sale so each newsagent can work out how their business is defined and what type of magazine will sell best in their store along with the titles to drop.

Gordon & Gotch Director Mac Jacob explained how the company's system interfaced sales from specific stores based on Gordon & Gotch's database of 5,500 newsagents. With its 4,000 titles, Gordon & Gotch has the largest portfolio of titles to distribute in Australia.

Copyright May 1998, Crain Communications Inc.

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