The need to build distribution networks and work within local regulations can make export a hazardous business for publishers. The evolution of digital technologies (in the form of websites and digital editions) has provided publishers with new, less risky routes to market. Paul Woodward looks at progress, in the context of Asia.
McGraw Hill’s recent decision to eliminate the European and Asian regional editions of BusinessWeek has once again focused attention on two key issues for publishers of international magazines: the challenges of building-up and maintaining regional publications and the opportunities which digital publishing technologies represent in addressing those challenges.
We are increasingly seeing publishers looking at digital media opportunities to address a variety of issues. These include the challenges of launching in highly-regulated markets like China, making circulation viable in low volume markets, capturing highly-mobile readers in an efficient manner and simply taking advantage of the commercial opportunities represented by the new technologies.
Affluent, but mobile readers
One publisher, who has taken advantage of most of these trends, and, particularly, the challenge of the highly mobile, high value international reader is Hong Kong-based AVCJ. The publisher of the Asian Venture Capital Journal, M&A Asia, and Private Equity Asia obviously addresses a very specialised audience of 10,000 or so investment bankers, venture capitalists, private equity specialists and corporate finance specialists. By the nature of their jobs, these people tend to travel intensively and be extremely ‘tech savvy’, perhaps the ideal candidates for digital editions of magazines.
Given that, it is no surprise that, back in November 1998, AVCJ was among the first publishers anywhere in the world to take the plunge of going fully-digital, giving up the print editions of all three publications. Chairman and publisher Dan Schwartz has a strong interest in proving the effectiveness of this approach as he is also the president and CEO of New York-based Qmags, a company which describes itself as ‘The World’s Newsstand’. This company has worked with CMP Media, Crain Communications, Dennis Publishing, Gruner + Jahr USA Publishing, Hachette Filipacchi Magazines, Hearst Magazines Division, the McGraw Hill Companies, Meredith Corporation, Rodale, and Ziff Davis Media. They clearly believe that the digital format is valid for everything from lads’ mags through to highly technical journals.
In a previous article for InCirculation, I have referred to the legal and regulatory challenges which many publishers face when addressing international markets. New launches give publishers an opportunity to take a fresh look at their business model, and consider what, at home, might appear to be radical solutions. A 90 year-old, Detroit-based trade publisher, Crain Communications might not appear, at first glance, to be the likeliest candidate for radical publishing experiments, and in China to boot. However, its Plastics News and Advertising Age titles have both launched digital editions in China in the past year. The plastics title, with a Chinese-language weekly e-newsletter linking into a bilingual dedicated web site appears to be drawing solid support from the company’s US advertisers.
There are a number of advantages to this approach, including relatively fast speed to market, and the ability for a publisher to retain control of their trademarks. A publishing concept can be tested on a local audience and brand recognition built up with far less risk than with a traditional magazine launch. Whether a market like China will ever demand print editions of international magazines after having gained early experience of electronic versions remains to be seen. Given the strength of functional B2B websites, such as Alibaba.com in China, it is quite possible that these markets will go paperless well before their ‘developed’ counterparts.
A publisher, using an electronic-only launch model, can concentrate much more effort on building up circulation lists. Finding adequately-targeted lists in markets like China is a challenge, particularly if email addresses are required, so that focus of activity is crucial to a successful launch. Not having to spend time on developing reliable channels for physical delivery can massively accelerate launch times. This is an area of operations in many developing markets where there are both commercial and regulatory challenges which have killed many a promising business plan.
Circulation in low volume markets
Fulfilling circulation in low volume markets using traditional magazine formats, is a challenge which many publishers find unrewarding. Anybody who lives outside the UK or US, and has tried to subscribe to specialist publications can attest to this; although there are some notable and honourable exceptions, particularly from UK-based publishers. Even the best, however, tend to deliver their publications at relatively high cost (typically three to four times home market subscription price) and with slow delivery.
Zinio’s announcement of its Global Retail Network, in September 2005, was clear recognition of this opportunity. ‘Our global newsstands open new markets for publishers needing to appeal to consumers around the world,’ said Jeff Bruce, president, publishing for Zinio at the time of the launch. ‘Today, magazines are instantly available to global magazine consumers with the convenience of language and currency preference at domestic prices. These benefits and the immediacy of the digital format will boost subscriptions and revenues for publishers.’
Very specialised magazine titles with strong international readerships, have found the digital route the only way they can survive in some cases. Grooves magazine is a six-year old quarterly, focusing on electronic music, with around 10,000 readers. It announced, in late November, that it would go electronic-only. Founder and editor Sean Portnoy was quoted as saying at the time, ‘People still prefer a print magazine over online at this point. But this move will allow us to reach more overseas fans of electronic music that we weren’t able to reach previously.’ Grooves is working with Texterity to produce its new editions.
The great technology debate
This article is not really the place to get into a detailed discussion of the pros and cons of digital facsimile editions versus web-based spin-offs of print titles. The debate rages on throughout the industry and across the blogosphere. Many hold very strong views on the advantages and disadvantages of each. They certainly represent different approaches.
Within the context of international editions, particularly those in Asia which we watch particularly closely, we would note that web-based spin-offs of news publications do not seem to be particularly well read. This may be as much due to uninspired site design and writing style. However, BSG tracks over 50 B2B media sites in Asia and those with large readerships are, almost without exception, the ‘functional’ business sites which allow people to source product. The top ranked news-orientated site, in our tracking, is China’s hexun.com which attracts an audience of some 3.3 million. It hosts important publication sites such as SEEC Media’s Caijing (at caijing.hexun.com), although it is more of a portal than a dedicated media site.
Tech Target, from the US, can be seen as successfully straddling the gap between traditional and online media, and its China site, techtarget.com.cn came in at number 16 in our rankings at the end of November. The first site which is a direct spin-off of a magazine is Fortune China’s which is currently ranked at 31 with around 22,000 regular users.
|Top 10 B2B media sites in Asia
|Source: BSG analysis/alexa.com
Digital facsimile titles
|Top magazine-linked B2B web sites in Asia
|Source: BSG analysis/alexa.com
As elsewhere in the world, there are relatively few digital facsimile titles across Asia. We have already noted AVCJ publications (available via Qmags), and the China-focused WSJ Briefings, produced by Dow Jones, are available via Zinio. The company has said that it is exploring the potential for launching digital editions of the Asian Wall Street Journal and Far Eastern Economic Review.
The strongest markets for these products appears to be those places in which Zinio has found strategic partners to launch sites; Taiwan and Thailand. In Taiwan, there are a number of local publications including Commonwealth, Defence Technology Monthly, Business Weekly Taiwan, eBoss, Network Magazine Taiwan and Management Magazine. It would be interesting to determine whether this digital distribution gives these publications any presence in the China market although Taiwanese magazines are produced using traditional Chinese characters which are difficult to read for mainlanders educated with simplified characters. It would certainly give otherwise isolated Taiwanese publishers access to the worldwide diaspora of the overseas Chinese who would be difficult to reach, economically, with print.
Zinio’s Thai franchisee is a division of True Digital Entertainment, a large local telecoms company. The site seems to thrive particularly on a diet of local womens' and mens' magazines although there are some interesting other titles including a local edition of AutoBild magazine. ‘There are unique challenges to selling magazines in Thailand,’ said Isra Taulananda, general manager of True Digital, presumably referring to the fragmented and opaque distribution system. In a market like that, and I have referred to those issues in past articles, digital distribution helps legitimate businesses bypass the traditional challenges of getting to the street stalls.
Reader’s Digest has long been at the forefront of innovations in publishing management which then become standard practise. It is interesting to note, therefore, the company’s December 6 press release announcing the launch of digital subscriptions. They tout the ‘read anywhere, anytime’ benefits of digital editions. Bonnie Bachar, president, US Magazines, Reader's Digest Association was quoted at the launch saying, ‘It's exciting for us to offer our readers access to Reader's Digest where they want it, when they want it. We are continuously looking at ways to optimize our content to meet the mobile lifestyle of today's readers.’ They are unlikely to be alone and we expect to see increasing numbers of innovative approaches to using digital technology to penetrate international markets.