THE POPULAR MAGAZINE market is already so competitive that many believe it is saturated. But that has not stopped one local Internet company from trying to enter it.
Despite operating at a loss of between $5 million to $6 million a month, the Web portal 36.com plans to expand into traditional print media - with the aim of creating a synergy between conventional publishing and the electronic variety.
The company, run by charismatic talk-show host Albert Cheng King-hon, is reportedly poised to siphon $50 million into the new venture. It estimates that this could mature into a viable business if the new magazine can achieve a circulation of 80,000 copies within a year. The company has been redeploying its existing resources, and recruiting editorial and marketing staff. Its print version is likely to hit the streets after Easter.
After several years of cut-throat competition, Jimmy Lai Chee-ying's publishing empire now produces all of Hong Kong's three most popular weekly magazines. Next is the clear winner, with an average of 568,000 readers. Split into two books with a total cover price of $20, it has secured nine per cent of the total market. In second and third place are sister publications, Sudden Weekly and Easy Finder, with a market share of eight and six per cent respectively.
However, a closer look at consumer purchasing behaviour shows that the market is more fluid than it appears. Only about half of the popular weeklies are bought by regular subscribers, with the remainder sold over the counter at convenience stores and newsstands. That means a substantial number of buyers only make up their minds whether and what to purchase, after having seen the magazine front covers. These readers can hardly be described as loyal, and can be easily persuaded to switch brands.
While Mr Lai has shifted his focus to Taiwan's larger market, after suffering major setbacks in his attempts to diversify into cyberspace and the retail business, local newspapers have already portrayed Cheng as eager to take over what Mr Lai seems to have put aside. And his yet-to-be-named spin-off is supposed to be a little more upmarket in its outlook than Next.
Last year, many frustrated Internet content providers started downsizing in a battle for survival, with more than 1,000 staff being laid off in Hong Kong.