Article,
China Publishing: 2005
Magazine Publishers of America, (2005)
Abstract
Jeff Sprafkin, CEO Media Pacific Limited, provided an update on magazine
publishing in China during a recent MPA Breakfast Forum. Sprafkin,
who has twenty years media experience in China, suggests magazine
publishing will continue its fast growth along with the rest of the
economy. He expects between 30% and 50% growth in ad spend for major
magazine categories. He predicts a continued loosening of regulations
in and around the magazine segment. He confirmed that the local Chinese
publishers are getting very good. They are able to bring high quality
titles quickly to market. Competition with foreign brands will only
increase.
Beijing and Shanghai remain the major magazine markets for publishers.
Weak distribution not demand, hinder growth in inland cities such
as Chongqing, Sichuan, and other Central China hubs. Independent
newsstands represent the main distribution channel, though convenience
stores are fast gaining share. Deregulation and investment is starting
to reshape bookseller landscape, expanding another growth channel.
Bertelsmann is moving from a primarily book club emphasis to retail
club outlets.
China’s total media ad spend continues to soar and will approach $30
billion by 2006. Magazines, still a small player, are expected to
top $1 billion by 2005. Sprafkin reports that increasingly ad-driven
business models are taking root in more magazine categories. Leaders
in travel, auto, and business categories have experienced sharp growth
in 2004. Foreign entrants are adding licensed titles to a growing
number of categories. International Data Group (IDG), as investor
and operator, has 14 titles. In all there are approximately 106 foreign
titles distributed in China. Established licensed titles dominate
in the IT and fashion categories. Local leaders are fueling keener
competition in newer growth categories such as business, auto and
travel.
Sprafkin notes that the pool of strong, experienced licensing partners
remains limited. His list includes: IDGH, Trends Magazines, Media2U/Redgate,
Morningside, SEEC, Vertex and TOM. Jeff Sprafkin reminded attendees
that magazines and serial publications remain highly restricted.
Foreign entry is limited to licensing partnerships and advertising
representative relationships. Hong Kong registration is reportedly
being coordinated more closely with authorities in Beijing, suggesting
that China is moving to reduce HK-based magazine publishing by mainland
entities.
The advertising-rich magazine categories are becoming saturated, especially
in the large eastern cities. The newsstands are becoming increasingly
crowded. With fierce competition from local publishers, segments
of the magazine market offer less room for newer foreign entrants.
The market is showing signs of maturity. In this respect China is
not unlike other markets and countries. When the general categories
become filled, opportunities arise for the more targeted titles.
Sprafkin suggests that publishers look beyond magazine formats to
book series, events, and online. He reminded us that the interior
cities are emerging with unmet needs.
