Business papers are expanding their overseas markets, but are these
ventures are likely to meet with success?
Scott Beagrie looks at the potential in these developing territories
Considering the impressive growth of business and manufacturing
industries in Eastern Europe and China, it’s hardly surprising that
international newspapers and business magazines are lining up to
ingratiate themselves with non-English speaking business communities to
cash in on potential ad revenue.
Yet less than two years ago it was thought that these countries had
little potential to attract advertisers in sufficient numbers. Figures
released by Fiej, the Paris-based World Association of Newspapers
(formerly the Federation International Des Editeurs des Journaux),
showed that newspapers, particularly in Mediterranean countries and
parts of Eastern Europe such as Russia, Romania, Bulgaria and the Baltic
states, start from a low percentage of advertising revenue, averaging
only 28 per cent, compared with a European average of 42 per cent. But
as Ian Leonard, business development director at Newsweek, puts it:
‘There is now a greater prospect of getting advertising in Russia, for
example, because there are so many companies moving there.’
In Russia, the Financial Times’ Russian language edition, called
Financial Izvestia, has been published as a twice-weekly section
inserted in Izvestia for four years. According to Terry Damer, director
of international newspaper development at the FT, the venture has proved
‘very successful’. Distribution of Izvestia currently stands at 195,000.
Advertising for the Financial Izvestia is tackled on two fronts. The FT
in England targets companies that advertise globally, while a Moscow-
based sales office targets local Russian advertisers, as well as the
Russian offices of companies that advertise globally.
‘We think it is the only remaining successful [foreign] joint venture in
the newspapers field in Russia,’ Damer claims. ‘We know what the figures
are but we have decided not to publish them. But it has been well worth
doing. And that’s after we’ve covered all our internal costs. So we are
very, very happy.’ This success must be even more satisfying when one
considers that the newspaper publishers who have had their fingers burnt
in the past on foreign dalliances include the late Robert Maxwell with
the Berliner Zeitung and the Moscow News, and Rupert Murdoch with the
East German flop, Super!
The widely syndicated FT - through its parent, Pearson Publishing - is
unique in its heavy investment in international business newspapers in
that it has interests in most of the major markets. Among others, it
owns Les Echos in France, has a majority shareholding in Expansion, a
Spanish business newspaper, and wants to become more involved with the
Business Standard, an English- language Indian business newspaper.
‘Usually our interest is in the form of becoming either the owner or the
major shareholder in the equivalent of the FT in other countries,’ Damer
says, but adds that in some countries it makes more sense to do it as a
joint venture.
‘We certainly wouldn’t turn our back on a similar approach in other
countries, if it seemed more appropriate. But we haven’t done it yet,’
he says.
Sales of the Financial Izvestia have not hurt sales of the regular FT,
which sells 900 copies a day shipped in from the FT’s printing plant in
Frankfurt. Damer can’t recall the exact number of FTs sold before the
introduction of Financial Izvestia but claims that four years ago the
figure was less than 900.
A more recent convert to the Russian market is Newsweek, which launched
a Russian-language edition last April. According to Leonard, the
magazine is doing ‘extremely well’. Around the same time, Newsweek
launched a Spanish edition for Latin America, in addition to a Japanese-
language version launched ten years ago, and a more recent Korean
edition.
Leonard says: ‘We basically launched in countries where there is not
going to be any cannibalisation of our own English magazine, and so far
that hasn’t happened - in any of these countries.’
Newsweek’s Russian edition, Itogi - Russian for ‘summing up’, has a
circulation of around 50,000, and is produced under licence by the media
operation, the Most Group.
All of Newsweek’s previous publishing ventures have been partnerships.
The contracts are not absolutely identical, typically the breakdown of a
magazine’s content is between 70 and 80 per cent direct translation of
regular Newsweek, with the remaining 15 to 20 per cent made up of local
news and comment. What makes the Russian edition different, according to
Leonard, is that it is written ‘by Russians for Russians’, although they
can select items from Newsweek for translation.
Conversely, Time magazine has chosen not to launch any foreign-language
editions, despite being the first magazine to have launched national
advertising editions.
Carrie Welch, communications director for Time Atlantic, says: ‘We’ve
looked at it many times over the past so many years, but we are not
launching, and I don’t think I could say that we have any plans in the
near future to launch local-language publications in any European
market.’ However, she adds that Time is investigating the potential of
Spanish- and Portuguese-language versions for South America. Countries
previously investigated by Time include Japan, Russia and India. ‘It is
something we are constantly researching, and it is just not the right
area for us at the moment, which doesn’t mean that we will stay that
way,’ she says.
Time’s method of capitalising on local advertising potential is through
the publication of a series of special reports focusing on particular
countries, with a local-language translation of the special report. The
first of these reports - on France - was published last year. The report
sported the same magazine cover that appeared in the rest of Europe,
only the copy was in French. Accompanying the report in English was a
French translation. Although the exercise was carried out during the
French national strikes (‘a terrible time to try and distribute a
special’), Welch says normal sales from the newsstands would hover
around 8,000, although the special French issue sold approximately
52,000. ‘So it does work,’ she says. ‘Time enjoys a great reputation and
prestige but we have a fairly small circulation given the size of the
country, and it opens up the magazine for a whole lot of readers that
wouldn’t otherwise feel comfortable [with it].’
As for any potential to increase advertising revenue, Welch is
pragmatic. ‘I don’t think it is the translation that increases the
advertising revenue. It is the fact that we are doing a report focused
on that country,’ she says.
Time’s second report, published last month, focused on Germany, and
while it’s too early for sales figures, it didn’t meet with such a
favourable response. That was because, as Welch explains, ‘English
fluency is much greater in Germany than in France’. An Italian edition
is planned for next spring.
In November, Fortune launches its first foreign-language edition for
China, which will be published in Mandarin. One of the problems facing
all publishing of this nature is that editorial expertise is difficult
to transfer because of culture and language barriers. With this in mind,
Fortune has opted to hand the task of producing the standalone
publication to the Hong Kong-based publishing house, CCI Asia Pacific.
The issue will feature one-off commissioned articles, but much of the
magazine’s content is expected to be taken from Fortune, translated and
re-edited before being sent out to 51,000 named senior Chinese business
managers. Four issues are planned for 1997, but the frequency could
increase.
Patrick Falconer, Fortune’s regional director for the UK and
Netherlands, says that there is worldwide interest from businesses who
want to get a foothold in China, and that some companies have already
prepared ads in Mandarin. ‘It’s going to be a global advertising base.
We’re actually looking for advertising from a worldwide market.’
The International Herald Tribune is considering local-language newspaper
partnerships, but has no plans for local-language editions of the paper.
‘I can’t say we’ve researched it, but we’ve talked about it,’ Bruce
Singer, director of corporate communications at the IHT, says. The
paper’s priority is to increase the number of print sites over the next
two to three years to make it more widely available. ‘We believe that we
can get the readers - as long as we can physically get the newspaper
there,’ he says.
The European has resolutely stuck to the English language, believing
that as soon as it publishes multi-lingual editions it would lose its
sales position as the leading pan-European print medium and become a
direct competitor to indigenous papers.
Mike Moore, managing director of the European, says: ‘We are constantly
reviewing all the opportunities and there are many throughout Europe at
the moment. I would like to leave it that we are actively interested in
opportunities, we are watching what our competitors are doing, and
considering what we might do, but there is nothing specific I can tell
you at this point in time.’
The Wall Street Journal’s approach to what it calls its special editions
could be described as strictly business, which contrasts sharply with
that of its main rival, the FT. The FT wants Financial Izvestia to work
as a brand-building exercise for the FT in Russia, whereas WSJ special
editions are conducted on a purely commercial basis. They consist of
bannered pages of WSJ copy customised for the local market, and
appearing in local papers in America, Europe and Asia.
They vary slightly from country to country but share the same broad,
basic characteristics.
The largest of its special editions is WSJ Americas, which runs two
pages in ten of Latin America’s leading newspapers on a daily basis as
well as a separate weekly version in a further six Latin papers. A four-
page supplement in a Madrid daily brings the total to 17 papers
translated into Spanish with a total circulation of 1.7 million. A
further eight pages are published weekly in the Turkish business paper,
Milliyet. Arrangements for advertising vary slightly but in all of these
cases the partnership newspapers pay ‘significant’ fees for the news
content. In many instances WSJ sells advertising for the newspapers, and
where it does, the deal is standard. For any advertising it sells, the
WSJ keeps 50 per cent, and where the newspapers sells ads against the
special edition, they keep all the revenue.
