Taiwan delivers Apple profit
Apple Daily's Taiwan edition will post its first quarterly profit next month, positioning Hong Kong-listed Next Media's most widely read publication as its growth driver for the coming year.
The paper posted a profit for one month last quarter but remained in the red over the three months to September, Apple Daily's Taiwan publisher James Tu Nien-chung said in an interview with the South China Morning Post. The Taiwan paper remains Next Media's only unprofitable unit.
While declining to give specific figures, Mr Tu said an increase in advertising sales and strong circulation figures have helped improve profitability for its Taiwan flagship, which launched in May 2003.
Apple Daily is also poised to take the No1 spot in Taiwan's crowded newspaper market, according to AC Nielsen readership figures that show it neck and neck with Liberty Times.
Both papers have a market share of about 28 per cent. Apple Daily leads in week-long readership surveys while Liberty Times has an edge in spot 'previous day' polls. Apple Daily surpassed both China Times and United Daily News' circulation last year.
Next Media's Taiwan operations posted a loss of $158 million for the financial year to March 31, dragged down by the newspaper. The company also publishes a highly profitable Taiwan version of Next Magazine.
Next Media posted a net profit of $104 million - about 60 per cent of which was derived from its Taiwan magazine - on turnover of $2.9 billion for the financial year to March.
'It is increasingly accepted that growth from Taiwan is the key to [Next Media's] medium-term future and a major driver of the 40 to 50 per cent earnings growth anticipated for ... the year ending March 2006,' said Vivek Couto, executive director of consulting firm Media Partners Asia.
Apple Daily's Taiwan edition now accounts for 30 per cent of Next Media's group turnover, making it the second-largest unit behind its Hong Kong flagship.
The newspaper's Taiwan circulation peaked at 650,000 this summer, although it has since dropped back to about 560,000 after a 50 per cent increase in cover price from NT$10 ($2.30) to NT$15.
In Hong Kong, Apple Daily's circulation stands at about 340,000, but it enjoys a higher cover price, ad loading and ad prices than its Taiwan sister publication.
In Taiwan, Apple Daily has a low subscriber base and relies on its bold design and lurid photos to drive daily newsstand sales. Its diet of sensational news and bold visuals rocked the crowded, yet staid Taiwan newspaper industry, whose mainstay has long been political news.
'[Our] feedback is that [Taiwan readers] are not interested in trivial politics,' Mr Tu said. 'I don't mind if people call us [sensationalist].'
Apple Daily has also won over Taiwan advertisers - many of whom stayed away in its first year - despite raising rates 60 per cent earlier this year. Another 15 per cent rise is expected in coming months.
'Because their readership is increasing, more and more advertisers can accept them,' says Winnie Juang, general manager of advertising buying agency Maximus.
Mr Couto added: 'Where the paper was previously dependent on ads from the property sector, which accounted for 70 per cent, it's now reduced that dependence with a lot of adspend from car, cosmetics, computer and communications categories coming on board.'
