CHINA: SETTING UP SHOP

Starting up a Chinese version of a magazine requires patience and the right choice of local partner. Three successful overseas publishers describe how they went about it.

HEARST INTERNATIONAL

George Green - president, Hearst International

It was at a FIPP conference in 1997 that I met Pat McGovern, the founder, chairman and chief executive of IDG (International Data Group, a leading IT publisher). Pat had been in China since 1980 with Computer World. He said "why don't we do something together?", and by April 1998 we had launched Cosmopolitan through a partnership with the local magazine Trends Lady.

The Chinese-language Cosmo was the first US-owned women's magazine in China and Hearst's 35th Cosmopolitan edition worldwide.

Did we research the market before we launched? Research is a waste of time. I believe that if you put out a product that people want, they'll buy it. It's as simple as that. There are many people who purport to be experts, but the best way to find out is for yourself.

October's edition of Cosmo China is 360 pages thick.Look at the advertisers we have: Emporio Armani, BMW, Chanel, Cartier, Dior, Omega, Olay, Hugo Boss. As well as Cosmopolitan, we publish six other titles in China. Cosmo Girl, Good Housekeeping, Harper's Bazaar, Seventeen, Esquire and Popular Mechanics. We will launch Men's Health soon too. It's clear that China represents a huge potential.

But to be successful in China, you must remember that what you think you know, you don't know. Doing business there is nothing like doing business in your home market. Closures of titles with little warning is not uncommon.

Obviously, publishers writing critical pieces about the government are likely to have more of a problem. But it's a two-way street. The Chinese government is pushing for international publishers to educate local companies on publishing best practice, and they're very eager to learn. There are no secrets in magazine publishing, and we are ready to share.

If you want to be the dominant partner, don't go to China. Be prepared to be patient. Spend time there. You can't do it over the phone. You can't rely on a banker or lawyer. Publishing in China requires experience and knowledge. If you expect someone else to do the groundwork for you, good luck to you.

BUSINESSWEEK

Alan Lammin - managing director, BusinessWeek Asia

BusinessWeek/China was first launched back in 1986. Its logical publishing partner - for a number of reasons - was the government. Commercial publishers barely existed; moreover, they were able not only to procure a publishing licence with relative ease (without this, even today, a foreign publisher cannot operate in China but must print and distribute from outside, usually Hong Kong), but they had prior - albeit rudimentary - experience of magazine publishing itself. Many government ministries back then had small, non-commercial publishing departments attached to them, so we evaluated a number of these entities.

Given the nature of BusinessWeek's editiorial, we decided to run with the publishing arm of the then Ministry of Foreign Economic Relations & Trade, especially as these were the early, pioneering days of China's market transformation and the Chinese were literally embarking on a crash course in free market economics.

Seventeen years and many experiences on, we are essentially with the same partner, which has since morphed into the China Commerce and Trade Press, a division of the Ministry of Commerce.

When we launched back in 1986, BusinessWeek/China was a bi-monthly with 25,000 circulation. Today we are a monthly with close to 100,000 (BPA-audited) circulation. Articles are translated from the original editions of BusinessWeek and supplemented by, on average, 10 to 15 per cent local material. BusinessWeek manages the commercial (including advertising) side of the venture, while our Chinese partners handle editing, production and distribution.

The moral of the story? Stake a claim, choose your partner carefully and, above all, take a long-term view. Relationships or "guanxi" count for everything in China.

HAYMARKET WORLDWIDE

Tony Schulp - chief executive, Haymarket Worldwide

Viewing China from one's desk in London, Paris or New York is a very dangerous and costly exercise. You won't succeed until you've been there and done it. And that's not just Shanghai and Beijing, but Guangzhou in the south and 18 secondary cities. There are a lot of publishers I know that publish in China who have barely ever been there. They wave goodbye to their content and hope that someone at the other end will make sense of it.

Working with the local people and seeing the market from the inside is so important. Otherwise you can't get any idea of the scale or the pace of change. Take Shanghai. It has moved on incredibly in the past six years since we've been doing business there. Every three months there is a new building, hotel, motorway and airport.

The media laws are going to have to change. They are not accommodating or flexible, particularly for print. The way it works is content is licensed to a local partner and those partners work with you and take a share of revenues.

The law restricts international publishers from any form of ownership of print media whatsoever. However, virtually every major international publisher exists behind the scenes of a local company and that's why some international brands appear on front covers next to the Chinese title.

The Publishing Bureau obviously has a "one eye open and one eye closed" policy because it is quite clearly going on.

Currently, we license content for Autocar and Stuff to two publishers in Shanghai. We also recently struck a deal licensing content to another publisher for FourFourTwo. This gives us an ideal platform to learn about the market in preparation for the day that the barriers open for overseas publishers. That said, this will be some time and probably just in the specialist magazine market - at this stage I can't see this happening for news or current affairs.

There are a lot of parallels with India as it went through the same phase.

It had complete restriction and this is now being lifted because the government realises it cannot keep international publishers out. So they have opened the barriers to gain greater control of the market. We are publishing Autocar under licence but are applying to publish it under the Haymarket banner in a joint venture with a local publisher.

China is trying to open up. They have the Olympics and now Formula 1 and are desperate to get a proper international football profile. The media are essential for this progress to happen.

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