Media Pacific Paths to New Value in China's Magazine Market

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Media Pacific Paths to New Value in China's Magazine Market

  1. 1. Media Pacific Paths to New Value in China’s Magazine Market 14 May 2007 - Beijing Jeff Sprafkin Media Pacific Ltd Tel: +86-21-64046579 Fax: +86-21-64228387 mobile: +86-13818951047 [email_address]
  2. 2. 2001-2007 China Magazine Market: An Explosion of Reader & Advertiser Choices 2001 2007 Travel… Sports… Business… General Business: Fortune, Global Entrepreneur Personal Finance, Management, Sales & Marketing, HR: Money Weekly, Successful Marketing , Gen’l Sports - Basketball, Soccer: Sports & Leisure, Olympic Stars, Contemporary Sports Gen’l Travel - China National Geographic, Travel Scope, Traveler Special Interest Sports F1, Golf World, Horse, sneaker titles Special Interest Travel Regional travel titles (HK, Tibet, Western China), adventure travel, outdoor 270,000 China-based Websites 700,000++ China-based Websites Online.... In Print.... ...with advertisers eager for new, efficient media
  3. 3. Media Usage: Magazine Readership Continues to Rise…. … .but the battle for “share of mind” and “share of heart” is getting much fiercer <ul><li>With weaker print media loyalties, young users are driving rapid, early adoption of new mobile and online media </li></ul><ul><li>Blogs, games, and search engines….”user-in-control” drives online growth </li></ul><ul><li>The appeal of community is connecting readers to like-minded “quan-zi” online </li></ul>
  4. 4. Readers are developing clear-cut media formats preferences for different types of information Magazines, by themselves, risk not meeting these needs ….. …… while well-developed media brands can Dominant sources of information for middle-class, urban Chinese consumers in 2007…. (% indicating primary source)
  5. 5. From Magazines to Media Brands….But for Whom? Behavior (when, with whom, etc.) Psychographics (lifestyle, attitudes, etc…) ?? Demographics (age, income, education, etc) Yesterday…. … .Today China’s fast-changing social landscape means that demographics are no longer enough to effectively position magazine brands
  6. 6. Challenges: Can Today’s Magazines Move Beyond Traditional Ad Models and Single-Product Brands? <ul><li>Tradition Ad-driven Business Models Support Today’s Market Leaders….good for now, but they can offer more </li></ul><ul><ul><li>From 2003-2006, fashion category advertising grew at an average annual rate of 38%.....while circulation rose by less than 15% </li></ul></ul><ul><ul><li>Ad revenues represent more than 85% of total revenue for most glossy titles </li></ul></ul><ul><ul><li>But,…. less than 20% of middle-class, urban readers indicate that they’re willing to subscribe to their favorite magazine </li></ul></ul><ul><li>Magazine-anchored brands….they need to offer more </li></ul><ul><ul><li>90% of Chinese magazines are single-product brands </li></ul></ul><ul><ul><li>Most readers indicate that they rarely visit magazine Websites…. </li></ul></ul>
  7. 7. Opportunities: Under-exploited Brands + High Engagement…. <ul><li>Well-established magazines rank strongly among reader favorites….. great brand potential </li></ul><ul><li>Overall loyalty to favorite magazines has risen….readers spend more 25% more time with their favor magazine today than in 2003 </li></ul>A growing pool of local integrated media players have created exciting roadmaps for success…. <ul><li>Magazines continue to play important roles in readers lives….enjoying them nearly 1.5 hours per week </li></ul><ul><li>Some of the highest value consumers….young, affluent, and eager to cultivate new interests…are China’s most avid magazine readers </li></ul><ul><li>Engagement levels compare favorably with similar levels in the US… </li></ul><ul><ul><li>84% of Chinese readers look forward to the next issue vs 78% in the US… </li></ul></ul><ul><ul><li>85%-88% of Chinese readers find their magazines informative and authoritative vs 88%-95% in the US </li></ul></ul>
  8. 8. Roadmaps Toward Value Creation: China’s Integrated Media Brands <ul><li>Integrated online/print media providing recruitment advertising -- #1 in category against several sophisticated competitors </li></ul><ul><li>25 regional weeklies built on partnerships with local newspaper publishers drive 60%+ of revenue from print advertising </li></ul><ul><li>Founded in 1998; NASDAQ IPO 2004 </li></ul><ul><li>Today: Market cap of $480 MM , near $90 MM in 2006 revenues </li></ul><ul><li>Integrated online/print media providing real estate sales and listing data -- #1 in category with large lead, locking out fragmented pool of local competitors </li></ul><ul><li>4 targeted magazines added to complement Web-based product </li></ul><ul><li>Founded in 1999 </li></ul><ul><li>Sold 51% to Telstra in 2006 - reported valuation of just under $500 MM </li></ul>
  9. 9. Roadmaps Toward Value Creation: China’s Integrated Media Brands <ul><li>Integrated online/print/event media providing personal financial information and training </li></ul><ul><li>Publishes two magazines, operates a personal finance exhibition, personal finance portal and training business </li></ul><ul><li>Partnered with VNU to produce Shanghai-based MoneyFair </li></ul><ul><li>Founded in 2001, adds training and MoneyFair in 2003, launches Amoney.com portal in 2004 </li></ul><ul><li>B2B media group serving printing industry with integrated suite of publications, Website, exhibitions, books, and research </li></ul><ul><li>Publishes three trade magazines </li></ul>Common ingredients: building niche-dominating brands across multiple product formats…. … ..leveraging smart partnerships to increase reader touchpoints fast
  10. 10. Where are the missing links?...... People <ul><li>Talent gaps….. </li></ul><ul><li>Brand development – moving from product to brand-centric </li></ul><ul><li>Understanding and targeting readers – moving from ad-centric to reader-centric </li></ul>
  11. 11. From Opportunity…..to Reality: What’s Next? Understand Changing Readers….Research, Interaction, & Careful Targeting Training and Development Leverage Partnerships….Don’t Go It Alone Build on Strong Magazine Brands….Fast

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