Pop culture monthly sinks like a rock in mainland market
The mainland edition of Rolling Stone has reportedly sunk under the heavy weight of losses after only 14 months, highlighting the difficulties in establishing American publications in the mainland market.
The simplified Chinese version of the US-based pop culture monthly, a joint venture between a local publisher and Hong Kong-listed One Media Group, ceased publishing last month, sources told Media Eye.
'The closure of the magazine was totally due to the huge losses of the title as it failed to draw in advertising dollars,' a source explained.
The source said monthly losses for the magazine exceeded a million Hong Kong dollars.
The company has sacked all staff and the licence agreement with Warren Media in the United States, which holds the publishing rights of Rolling Stone, has been terminated, the source said.
'Rolling Stone is a new category of magazine in China, with a mixture of both current affairs and lifestyle,' the source said.
'Advertisers seemed to hesitate to have a budget for the magazine so advertising revenue did not increase over the past year.'
Initially, the magazine was positioned as the leading pop-culture, entertainment and music magazine in the mainland targeting 'trend-setting' readers under 40.
About 50 per cent of the Chinese edition was local content, with the other half from the US and 10 overseas editions.
Rolling Stone gained a lot of support from readers, who liked the way it dealt with current issues in a critical way. But that didn't change the fact that advertisers didn't like it.
'We were not able to make money based on the circulation revenue as it didn't cover the printing costs,' the source said. 'The mainland advertising market still needs to be educated to accept such a new title with a mixture of content.'
After the closure of Rolling Stone, One Media Group still operates three titles - Ming, an entertainment news monthly based on sister publication Ming Pao Weekly, Popular Science, a US science news monthly licensed from Time Warner, and Top Gear, Britain's leading automotive title licensed from the BBC.
One Media, spun off from Ming Pao Enterprise, made a profit of HK$7.02 million last year, down from HK$22 million the previous year.
Rolling Stone's Chinese edition debuted in March 2006 with a print run of more than 100,000 copies and was sold out within a week in cities such as Shanghai, Beijing and Guangzhou.
The cover story for the first issue was on Cui Jian, a musician who is also an activist in the mainland.
Dr Cha offloads Ming Pao shares
Dr Louis Cha, founder of Ming Pao Daily News, sold almost his entire stake in the company for HK$1.9 a share last month for a total consideration of HK$76 million, according to the stock exchange.
Dr Cha offloaded the holding two days before Ming Pao shareholders approved a merger with sister companies, Malaysia-based Sin Chew Media and Nan Yang Press.
'The share sale should not be interpreted as Dr Cha's attitude towards the deal,' a market watcher said.
'He should support the deal but he might have thought his stake would be diluted to about 3 per cent after the merger was completed.'
Dr Cha, who owned a 10 per cent stake in Ming Pao before the transaction, now has only 463,000 shares in the company, 0.11 per cent of the issued capital.
Tiong Hiew King is the single largest shareholder of Ming Pao, owning about 64 per cent.
Dr Cha sold his controlling stake in Ming Pao in 1992 to Yu Pun-hoi, a Canadian businessman who now controls several Hong Kong-listed companies including Nan Hai Corp.