Foreign magazine publishers scrambling to catch mainland eyes
Foreign magazine publishers are tapping into China's huge potential market ahead of next year's Beijing Olympics and the Shanghai World Expo in 2010.
According to Nielsen, the mainland magazine sector generated 2.31 billion yuan in gross advertising revenue during the third quarter, up 16 per cent year-on-year.
Time Out, the London-based leisure and listings magazine, recently changed its mainland partner to strengthen its exposure in China. Time Out now has published three titles in China - Time Out Beijing, in Chinese and English, and Time Out Shanghai in Chinese.
The mainland publishing rights for Time Out have been acquired for HK$12.48 million by Beijing-based SEEC Media, a Hong Kong-listed advertising agent for mainland magazines such as Caijing, from China Interactive Media Group.
SEEC Media would pay HK$6.24 million in cash and issue 13.39 million new SEEC Media shares at 46.6 HK cents each to settle the transaction, the company said.
Time Out has been in China since 2003 and partnered with China Interactive Media Group. However, the magazine has not yet generated any profit due to fierce competition in the leisure magazine market, according to an industry watcher.
'Time Out, as a bilingual title in China, is usually not the strongest. In that category, I think City Weekend and That's Beijing/Shanghai are stronger,' the industry watcher told Media Eye.
'The Chinese version of Time Out has circulated in Beijing and Shanghai for over three years and its capital investment outlay has reached its last stage and soon it will generate profit,' SEEC Media said in a company announcement to shareholders last week.
'The advertising business of the titles has huge growth potential in the next few years especially with the upcoming 2008 Beijing Olympics and the 2010 Shanghai World Expo,' said SEEC chairman Wang Boming.
Time Out China is published under the name of Time Out-Le in Beijing and Shanghai. SEEC Media paid HK$2.36 million for the use of the Time Out brand and must share future revenue with Time Out in London.
The original partner was China Interactive Media Group, a privately owned media company involved in magazine publishing and online media businesses.
SEEC Media sells advertising space for several mainland titles, such as Caijing, a well-known business newsweekly. It has partnered with various international publishers to launch Chinese editions of Better Homes and Gardens, owned by Meredith Group in the United States, Time Warner's Sports Illustrated and PC Magazine from Ziff Davis Media Group.
The company inked a deal in September with Italian publishing group Mondadori Pubblicita to form a joint venture on the mainland for the Chinese version of Mondadori's flagship women's title Grazia.
But the mainland magazine market is not an easy game for foreign players. One Media Group, the magazine unit of newspaper publisher Ming Pao Enterprise, said in its interim report that it had ceased publishing two titles in China to boost profitability.
'Intensified competition in the China market and the discontinued operations of T3 and Rolling Stone led to the decrease in turnover,' the company said. One Media's revenues from its mainland titles was HK$15.87 million for the six months to September, a 24 per cent drop from the previous year.
The company still publishes three titles in China including MING, a mainland version of the group's flagship Ming Pao Weekly, Popular Science and Hi Gear.
One Media, which listed in October 2005, used its China concept to tap the capital markets for HK$102 million net proceeds. But its expansion plans have slowed and HK$50 million reserved for acquisitions in China is idle.
One Media generated HK$85.3 million in revenue during the period from Hong Kong, where it publishes profitable titles such as Ming Pao Weekly, Hi Tech Weekly and City Children Weekly.
The company made a net profit of HK$1.37 million in the period, while it lost HK$3.04 million a year earlier, according to One Media.