Richard Li rises to a different challenge with his 'cheapest toy'
PCCW chairman Richard Li Tzar-kai (below), that pioneer in delivering television to the masses whether from outer space or through cables poking into our sitting-room walls, reckons he is up to a challenge of a different sort - how to carve out success in traditional paper-and-ink media.
Mr Li's 50 per cent stake in the Hong Kong Economic Journal has market watchers eager to see how he measures up to rivals in his old hunting grounds of internet and video-based media.
Mr Li first invested in satellite television media through Star TV in the early 1990s and then, with now.com in the late 1990s, followed the trend in the United States of mixing internet and television.
More recently, his NOW Broadband TV became the world's first commercial internet protocol-based television operation.
The Economic Journal is different in other ways. Where new-technology media ventures could cost Mr Li more than HK$1 billion, his latest business cost less than HK$300 million. As one market watcher has told Media Eye: 'It should be the cheapest toy for Mr Li since he started his own business 15 years ago.'
Mr Li and his team, including former Next Media and Sing Tao News Corp executive director Morris Ho Kwok-fai and one-time Television Broadcasts general manager Chan Hing-cheung, have not disclosed their business model for the Journal's future.
Outsiders speculate that Mr Li will look for growth using the internet to advance the print business. They also reckon Mr Li wants to uphold press freedom and raise the quality of journalism.
From an editorial perspective, no big change is expected, as founder Lam Shan-muk will still run the newsroom. More resources may be devoted to strengthening the news team, which may look to fill a gap in the local media by focusing more on international affairs rather than local news.
The Economic Journal will aim for the growing newspaper advertising revenue linked to middle-class buyers of dailies such as Ming Pao Daily News, Hong Kong Economic Times and Sing Tao Daily who are gaining from the economic boom of the past few years.
'Our studies learn that the middle class in Hong Kong is reaching full employment; the major source of unemployment in Hong Kong is the lower class,' a Chinese-language newspaper executive has said.
'Advertisers should place their budgets with the niche dailies to reach the real spenders.'
Hong Kong Economic Times has dominated the banking and finance advertising budget in the market, as middle-class readers have shown increased interest in wealth management services.
The Economic Journal might seek to cannibalise the Economic Times' share, though other dailies are also improving their business news coverage to grab the advertising dollars.
Ming Pao Daily News is betting on its business news as its growth engine to gain new advertising revenue after a revamp in June. An MTR Corp outdoor advertising campaign is aimed at attracting readers' attention.
Sing Tao Daily has also put lots of resources into business and property news in recent years for the same reason.
The Economic Journal has a high reputation but has lost readers over the past few years to Economic Times.
The low base presents the new management with a double problem.
'With a circulation of only 10,000 to 20,000 copies a day, the success of the Journal is linked to its market position,' a market source said.
On the operating side, it will be critical to exercise tight cost controls and boost advertising dollars at the same time.
'As printing costs are rising, it will be risky to increase the print run if advertisement sales are poor. At the same time, the management may want to use high pay to attract higher-quality staff.'
fighting to survive
Mr Li is taking on his latest challenge as the newspaper industry tries to hold off the threat from the internet and other free information, sometimes battling like for like.
Media tycoon Rupert Murdoch will launch a free daily in London, the London Paper, next month, as his titles such as The Times and The Sun struggle with declining circulations.
Mr Li's entry into the local quality paper market and Mr Murdoch's new move suggest newspapers still have a capacity to survive. For how long, stay tuned.