What a difference a year can make. Only 12 months ago, in the midst
of a devastating economic crisis that gripped most Asian countries, the
newspaper business must have seemed a very depressing business to be
Declining readership and slashed advertising revenues led to reductions
in both staff numbers and corporate earnings. Publishers were
questioning the long-term viability of their business models and some
were even considering shutting up shop.
But today, a different story is rapidly unfolding. In some markets,
readership has returned to pre-crisis levels and, in a few, has even hit
all-time highs. Ad revenues have rebounded significantly across the
region. Many publishers are aggressively exploring new frontiers in
printing and distribution.
And a rapid move to the internet - seen as a complement to existing
business practices, rather than a threat - is, in some instances,
redefining the economics of the newspaper business. How did we get here,
and what will the future bring?
The economic turmoil that hit most Asian countries in 1997 dramatically
affected all categories of consumer spending. This included the smallest
expenditures, including the purchase of a daily newspaper. In almost all
markets across Asia, newspaper circulations took a dive in 1998 as
consumers reduced their ’discretionary’ spending.
MindShare conducted a series of consumer focus groups across seven
countries in Asia in late 1998 to explore the effects of the economic
situation on people’s media consumption habits.
Almost without exception, people told us they had either reduced the
frequency of daily newspaper purchases or had eliminated them
altogether. ’I can get my news for free on TV,’ one Thai housewife told
us resolutely. ’Why should I buy a newspaper when I need money for other
things?’ We received similar explanations across the region. As
household budgets were pinched, newspapers were often viewed as a
But this is now changing. As economies have rebounded, purchasing power
has increased. Newspapers have made a comeback in a number of markets as
a result. Even in markets where daily readership was down in 1999 versus
1998 early indications in 2000 show growth to ’pre-crisis’ levels,
according to MindShare research. And, as readers have returned, so have
Most papers across Asia experienced a severe downturn in advertising
expenditure from late 1997, which continued through 1998. Markets such
as South Korea and Thailand suffered year-on-year decreases of more than
40 per cent in 1998.
But during the second half of 1999 significant gains were realised in
all markets (excluding Japan). Renewed growth was generated by the
return of big-spend categories such as retail services but also by
strong growth from ’new’ areas such as telecoms, financial services,
healthcare and pharmaceuticals, and, of course, dotcom advertisers.
Perhaps the largest factor contributing to the resurgence, however, was
classified advertising. As economies strengthened, recruitment
advertising returned with a vengeance in most markets - much of it
fueled by those same dotcom companies.
Another important contributing factor to the growth in ad revenues in
1999 was a greater willingness by publishers to accept more innovative
uses of the newspaper medium by advertisers. Nike, for example, moved
significant budgets out of TV and other media to capitalise on creative
opportunities put forward in markets such as Hong Kong and Taiwan.
As we continue into 2000, the fundamentals have returned to a reasonable
state of health and Asia’s newspaper industry is turning its attention
to other challenges and opportunities.
As a result of tumultuous technological change, and not for the first
time, the future of the newspaper format is being questioned. Some say
that the internet will stop the printing presses. But, when speaking to
publishers across Asia, one sees a strong conviction that there is a
great deal of life left for well-managed papers.
Newspapers are broadly in the business of delivering news, comment and
analysis and the best-managed newspapers in Asia have realised this
means delivering their content in many forms - both printed and
This is happening in every country across Asia but perhaps the best
demonstration of how this new thinking is being put into action is from
the South China Morning Post, Hong Kong’s leading English-language
SCMP has moved aggressively to the web, building www.scmp.com into one
of the most visited sites in Hong Kong. Much of the site’s popularity is
due to original news content and an innovative approach to online job
recruitment (building on SCMP’s dominance of printed recruitment
advertising of Hong Kong). It also helps that the site has a
comprehensive horseracing element to satisfy Hong Kong’s voracious
SCMP is also moving aggressively into new ’space’, having recently
launched a wireless edition of scmp.com for hand-held computing devices.
Moves such as these - using new technologies to build on established
franchises rather than hand-wringing over perceived threats - will lead
Asia’s newspapers into a more secure future.
One year ago, the picture for newspapers in Asia must have seemed bleak
to many observers. But, in keeping with the true character of this
region, publishers have adapted quickly. They have re-built the basics
of the business: loyal readership and committed advertisers. And, more
importantly, they are quickly embracing new technologies and business
models to build strong franchises for the future.
LEADING DAILY NEWSPAPERS BY MARKET 1999
Country Newspaper Average daily % Change
readership vs 1998
China Beijing Wanbao 3,059 +14
Hong Kong Oriental Daily News 2,551 +21
Indonesia Pos Kota 2,633 -12
Japan Yomiuri Shin Bun 27,600 +1
South Korea Joongang Ilbo 4,198 -6
Malaysia Berita Harian 1,679 -11
Philippines Manila Bulletin 778 -1
Singapore Straits Times 1,361 +4
Taiwan Liberty Times 3,618 0
Thailand Thai Rath 8,219 -12
NEWSPAPER ADVERTISING EXPENDITURE BY MARKET 1999
Advertising % Change
expenditure vs 1998
China 1,723,863 +4
Hong Kong 1,106,238 +26
Indonesia 524,827 +37
Japan 11,370,000 -2
South Korea 484,600 +27
Malaysia 339,040 +17
Philippines 275,440 +16
Singapore 358,456 +6
Taiwan 1,017,105 +3
Thailand 417,833 +32
Source: AC Nielsen/MindShare estimates
ASIA’S NEWSPAPERS: COUNTRY BY COUNTRY
In 1998 there were 740 million daily papers in China, the bulk of which
had a local distribution. Aggregate numbers are on the way down,
however, due to the Chinese government’s quantity control policy.
High-selling newspapers include Beijing Wanbao and the tabloid Reference
News, both of which have circulations of around three million. Another
popular paper is People’s Daily. Arguments over reach are common as
there is no independent organisation to audit circulation figures. The
electronics giant Philips is one of the region’s largest print
advertisers: it spent RMB77,768 in newspapers in 1998. Two recent
launches include Beijing Morning Post and New Express.
More than 9 billion papers are sold in India every day and their number,
circulation and advertising revenues are all growing. The press accounts
for 56 per cent of the total 93,344 million rupees spent on advertising
in India. The two most successful papers are Times of India and Malayala
Manorama,which both have circulations of more than one million.
Corporate image advertisers are the largest advertising category in the
press with BPL India and Unit Trust of India the two biggest
Indonesia’s 50 million households were served by 79 daily newspapers and
88 non-dailies in 1998. Recent years have seen a marked increase in the
circulation of regional non-daily papers - between 1997 and 1998 the
total number in circulation jumped 49 per cent from 1,287 to 1,918. The
country’s two leading papers are Kompas and Pos Kota, both broadsheets
with readership in excess of two million each. Vehicle advertising
accounts for 10 per cent of the total spent, with Suzuki one of the
country’s top newspaper advertisers. Total advertising expenditure
across all media is only expected to return to its 1997 high of 5,094
billion rupiah in 2000 after plummeting by 39 per cent to 3,654 billion
rupiah in 1998.
Newspapers were hard hit by Japan’s recession. Advertising revenues and
copy sales have fallen as have profits at newspaper publishing
companies. Radical structural reforms and cost-cutting measures have
been the order of the day over the past few years. There were 108 daily
papers in Japan in 1998, 92 of them regional. Advertising expenditure is
forecast to be in the realm of 4,406 billion yen in 2000, a slight
increase on 1999, but a fall from its 1997 high of 4,517 billion yen.
Yomiuri Shinbun and Asahi Shinbun are the country’s leading dailies and
Toyota is one of the country’s top-ranked advertisers.
The press continues to dominate total ad expenditure in Malaysia with a
58 per cent share in 1998. Ad revenues for 1997/98 plunged by 22 per
cent at current prices down to 1,052 million ringgit due to the
recession. Nearly a quarter of press advertising is accounted for by
classified services. Malaysia’s 10.8 million-strong population was
served by 33 daily papers in 1998, 15 of which are national, and just
one non-daily. The three biggest papers by readership are Berita Harian,
Utusan Malaysia and The Star.
Advertisers across all media slashed their budgets by as much as 40 per
cent in the Philippines at the height of the region’s economic crisis.
Concurrently the press has been losing out to TV and radio - it accounts
for just 30 per cent of adspend. The shake-out has been severe - 20
daily and 196 regional non-daily papers closed between 1995 and 1997.
The Philippines’ top ten dailies include Manila Bulletin, People’s
Journal, People’s Tonight and The Philippine Star. The communications
sector is one of the strongest advertising categories in the press and
one of the country’s top print spenders is the Philippine Long Distance
Singapore’s modest population of less than three million is served by
eight daily, two non-daily and three Sunday papers (1998). Circulations
have remained relatively stable as has advertising expenditure in the
press. Zenith forecasts a total adspend of Sdollars 1,248 million for
2000, Sdollars 601 million of which will be accounted for by newspapers.
This represents a 14 per cent increase on 1999’s total. The Straits
Times boasts the country’s largest readership (1.3 million) while other
popular broadsheets include Lianhe Zaobao and Lianhe Wanbao. Department
stores such as Courts lead the advertiser rankings.
The newspaper industry in South Korea was badly hit by the Asian
recession with ad expenditure being cut back by as much as 40 per cent
in some cases. Total expenditure across all media was 4,744,488 million
won, down from 6,116,323 million won the year before. Forecasts for 2000
show a gradual recovery to 5,632,655 million won, according to Zenith.
Joongang Ilbo is the country’s biggest paper by readership. Other
well-read dailies include Chosen Ilbo and Dong A Ilbo. The country’s
leading brands, including Samsung, SK Telecommunication, Daewoo and
Hyundai, are among its top advertisers in the press.
Taiwan has a population of 21 million. In 1998 it recorded a total of
149 daily and 211 non-daily papers. Advertising expenditure across all
media has shown a steady rise since the early 90s. In 2000 it will total
NTdollars 161,033 million, a 10 per cent increase on 1999. NTdollars
69,141 million of that - 43 per cent - will be taken by newspapers. The
country’s leading paper by readership is Liberty Times (3.6 million).
Other popular papers include China Times and United Daily News. Property
advertising accounts for more than 20 per cent of display revenue in