INTERNATIONAL BUSINESS MEDIA: The New Asia - Richard Lord charts the progress of western media owners in Asia and asks how the downturn will affect their business

Over the past couple of years, it seemed like everyone with a pulse

did well in Asia - and that's as true of media owners as anyone

else.



Once the economic doldrums that followed the 1997 Asian economic crisis

had been swept away on a wave of technology-driven growth, 1999 and 2000

were a good time to be doing business in the planet's most

highly-populated continent.



Western-owned media companies, quick to exploit that buoyant market,

ploughed more resources into creating Asian content. By appealing to

local advertisers, they became the chief beneficiaries.



These days, 2000 feels like a long time ago. The global economic

slowdown has been felt particularly hard in the hi-tech economies of

east Asia, and media companies are having to retrench to fight off local

competition.



The fact remains, though, that most of the big regional media owners in

Asia are western-owned. That's especially true in the English-language

media and it's certainly true of pan-regional media - there are only a

few Asian-owned channels or titles that cover more than one or two

countries.



At local level, not many governments in Asia will allow foreign

ownership of major media outlets, especially in the more media-conscious

countries such as mainland China, Singapore and Indonesia. Domestic TV

and newspapers are almost always locally-owned. But areas such as cable

and satellite TV, business and consumer magazines and pan-regional

newspapers are western-dominated.



Most major international American or European-owned publishers or

broadcasters have some kind of presence in Asia now. Traditionally, that

presence was little more than a distribution platform for a western

product, perhaps with some token local content.



Over the past few years, however, partly as a result of increased

competition from local media owners, that has largely ceased to be the

case and separate Asian channels and editions are now the norm.



There are still varying degrees of localisation. Some print titles are

much the same the world over - USA Today, for example, for obvious

reasons, and business magazines, such as The Economist, which has an

authority partly predicated on its global nature.



At the other end are the fully local products, which fall into several

camps. There are specifically-Asians titles owned by foreign companies,

such as AOL Time Warner's Asiaweek and Dow Jones' Far Eastern Economic

Review. There are also locally-branded renderings of international

products, such as Star TV, the Asian version of Sky/Fox. And there are

companies that operate local sub-brands, such as CNBC and MTV, taking

the name of the foreign parent product, but with local branding in

individual countries throughout Asia. CNBC, for example, has five local

products covering markets such as Japan, Hong Kong and Singapore, as

well as the main CNBC Asia.



The majority of western-owned print and broadcast media owners in Asia

are usually somewhere in between these two extremes - they are an

edition of an overseas title but are local in flavour, combining local

and overseas content, and normally covering the whole of Asia in one

edition or channel.



The likes of CNN, BBC World, Discovery, Newsweek, Fortune and The Asian

Wall Street Journal fall into this camp.



The downturn poses some interesting challenges for western media

companies, precisely because they tend to be pan-regional, and their

locally owned competitors tend to operate in individual countries.

There's always a temptation, as budgets tighten, for advertisers to look

to individual markets in a bid to cut costs and try to maximise returns;

English-language media can easily seem like a luxury.



"The real difference is that western media owners own the big regional

stuff, and that tends to be in English," Chris Skinner, the director of

OMD in Asia, says.



"The problem is that pan-regional media tends to be less effective than

people think. For a start, it's in English, which rules out a lot of

people in Asia. It delivers a niche audience and it tends to be good for

the top-end people, but for larger numbers, local media is always far

more effective. The more local you can get it, the better, but there's a

lazy tendency to use regional media because it's easier, and you only

have to make the ad in one language, so the production costs are

lower.



"The big regional media owners are struggling a lot. For the past couple

of years,the big US brands have been happy to spend a lot of money with

them, but less so now."



He adds: "Asia-Pacific is quite a big place, with a lot of different

people. Western marketing directors tend to prefer regional media to

local.



And a lot of stuff gets booked out of the US and Europe by people who

don't know Asia."



Unsurprisingly, media owners demur. Miguel Bernas, CNBC's general

manager for marketing and communications, claims the opposite is often

the case, because for certain advertisers, the western-owned media

brands are the most important.



"With the global slowdown, there's a potential for international

broadcasters to take advantage," he says. "As large companies cut their

spending, they will focus on their core media and drop peripheral

media."



He adds that technology spending has held up surprisingly well this

year.



That could be because advertisers in the technology sector regard

business-to-business channels as core media. But, as Bernas admits, in

order to be seen as core media, foreign-owned, English-language products

have to convince advertisers that they have audience critical mass,

which means local people as well as native English speakers.



"The common perception is that English language international

programming is watched by ex-pats and clearly we need to appeal to a

much wider market than that," he comments. "So in Delhi and Tokyo, for

example, we make Hindi and Japanese language programmes. We want to

appeal to as broad an audience as possible, as long as they're the sort

of people we want to have watching CNBC."



Asiaweek's marketing director Simone Wheeler concedes that the tendency

for advertisers to go in-market is always a threat for regional

media.



The only way to counter it is to be more effective, she says. "We've had

some advertisers who have been regional and gone local, and we've had to

prove to them the value of a regional buy, " she says. "Eighteen months

ago, a new marketing director took over at BMW and took all of its

budgets into local publications, because he thought that would deliver

better results, but we persuaded him to come back."



The latest ad revenue figures from research group CMR International, for

the first half of 2001, make mixed reading for foreign-owned print

titles. The figures, which are calculated by multiplying ad volume by

ratecard, and don't take discounts into account, show some titles

soaring ahead, with National Geographic, Fortune China and Reader's'

Digest Asia, for example, all registering year-on-year increases of more

than 50 per cent. The International Herald Tribune, Time Asia, Newsweek

Asia and the Far Eastern Economic Review all held steady, while

Asiaweek, Fortune and Business Week saw falls of between 16 and 23 per

cent. But the story is the same for locally-owned titles: Asian

Business, for example, registered a 32.4 per cent rise, while Chinese

business title Yazhou Zhoukan was the worst performer of all, down 33.9

per cent.



The figures confirm that almost all of the biggest titles are

western-owned. The Asian Wall Street Journal was the biggest revenue

earner during the first half of the year, at US$30.4 million,

followed by Time Asia, Newsweek Asia, Asiaweek and the International

Herald Tribune. The biggest local player, not counting Australia's

Business Review Weekly, is the business magazine Bulletin, which with

revenues of US$3.9 million for the first six months of 2001, was

the 14th- largest earner in the region, followed by Yazhou Zhoukan in

15th place and Asian Business in 21st.



Western media owners have the advantage of a global perspective. Unlike

local competitors, they come from overseas, and have resources in other

countries to draw on. This is particularly true in the news and high-end

business media, where Asia is profoundly affected by what goes on

elsewhere in the world, particularly the US. Foreign ownership can also

lend them credibility,Tess Caven, the general manager of CIA

International, says. "For consumers, a western identity can be quite a

reassurance," she comments. "You know you're going to get an objective

viewpoint, especially in high-end and business coverage. People regard

the local press in particular as low-quality, censored, restricted and

not objective."



But however reliable and objective, a global perspective can miss the

mark if it isn't accompanied by local relevance. That's something media

owners approach in a variety of ways.



"Since the financial crisis, the big realisation has been that you can't

have an insular, regional view - you've got to have an idea of what's

going on globally," Caven says. "The local publications that covered the

whole region, such as Asia Times, Asia Inc, Asian Business, were all too

insular.



"It used to be that a magazine such as the Far Eastern Economic Review

stole a march on everyone else because it was based here. But in the

past ten years, the big global publications - Time, Business Week,

Fortune and so on - all launched local editions."



Not all attempts at localisation have been totally successful, she

adds.



"The big TV companies have tried to localise, but sometimes it's an odd

fit. A channel such as CNN will have a whole batch of local programmes,

and then you get anomalies such as Larry King."



Bernas of CNBC says the challenge is to balance local relevance with the

bigger picture: "We're trying to create something that is locally

relevant, and to that end we're rebranding services to the markets they

serve - so we've got CNBC Hong Kong, Singapore and Australia. But as far

as the balance of programming goes, a lot of it is global, because we

are a global financial news service with a global perspective."



The ideal position for big media owners is to be able to get at both

regional and local budgets with complementary products. That's the

channel's aim, CNBC's Asia-Pacific vice president of international

sales, Mark Froude, says : "We can tap into different levels; as well as

regional, we can be a premium tier within local markets. At least 80 per

cent of our international advertisers buy a package which at least

upweights or downweights certain markets."



Fortune, likewise, pushes the fact that it is both global and local.



The magazine has had a presence in Asia for 50 years and began

localising content in the early 1980s. It then launched a totally

separate, locally branded Asian edition in 1997. "We take a different

approach from most magazines, in that we use stories from Asia, but

interpreted from a global point of view, which means that Asian stories

appear in our US and European editions as well," the marketing director,

Stan Stalnaker, says. "We don't really consider the local players to be

our competitors, because they don't have the global resources that we

do."



Asia makes up a low double-digit percentage of the magazine's global

revenue, Stalnaker adds, with most of that coming from local

budgets.



Although those have been hit in recent months, the situation may not be

as bad in Asia as elsewhere, he claims. "There has been a drop-off in

revenue, but it hasn't been that bad. Asia has less far to fall since

the financial crisis."



As an Asia-only brand, the success of fellow AOL Time Warner title

Asiaweek is firmly staked on the fortunes of the Asian economy. The

magazine, which was launched as a political title in 1975 and bought by

Time in 1985, recently relaunched with a focus on business and

technology as drivers of cultural and political change.



"We're in the unique position of being a genuinely Asian news

publication," the marketing director, Simone Wheeler, says. "The story

of Asia today is business - politics and business are inextricably

linked here."



Wheeler regards international titles such as Business Week and The

Economist as her main competition, rather than local magazines, but

notes that ownership isn't a big issue for readers: "Consumers care that

they're reading a quality publication, but they don't care that much

about who owns it. We certainly don't push our ownership to our

readers."



Consumers in Asia are mostly indifferent to a brand's provenance; with

the exception of the big US blockbuster brands, such as the Coca-Colas

and McDonald's of this world. Most of the major brands make an effort to

carve out a local identity, so they are consumed as if they were

locally-owned, even if they are in fact the property of a western

multinational.



So, in Thailand, for example, market-leader Sunsilk is widely perceived

as a local brand, as is Tesco, which co-owns the leading supermarket

chain.



The same is true with media brands. It's not really about whether

they're western-owned or not. If anything, it's more about whether

they're regional or single-country. The focus is squarely on the quality

of the product and on a regional level, that is a battle that the

western-owned brands have been winning.



Whether they'll continue to do so in a shrinking economy, however,

remains to be seen.



ABRS SHOWS HOW GLOBAL AND LOCAL MAGAZINES MEASURE UP



The latest Asian Businessman Readership Survey (ABRS) from Ipsos-RSL

demonstrates the growing internationalism of Asian executives. ABRS

supplies data on the media habits of Asian businessmen by measuring

readership of international publications as well as local

publications.



This is the seventh ABRS survey and the first since the Asian economic

crisis from which Asia-Pacific is emerging as a strong force on the

international stage.



In 1999 - the date of the last ABRS survey - 40 per cent of respondents

engaged in international activity on behalf of their business. In 2001,

the figure is 53 per cent. And the number of ABRS executives has

grown.



The universe is now 239,000 strong, 31 per cent bigger than in 1999.



And this is a tech-savvy group. Internet use has risen from 55 per cent

to 77 per cent and hits 84 per cent for those respondents whose business

is international. This suggests that e-mail may be being used to

communicate with colleagues overseas where perhaps once there was more

face-to-face contact.



ABRS is a sister survey to EBRS, CEBRS and JBRS, covering Europe,

Central Europe and Japan.



- Countries covered (full coverage): Hong Kong (15 per cent), Singapore

(13 per cent)



- Countries covered (part coverage): Indonesia 13 per cent (Jakarta,

Surabaya); Malaysia 8 per cent (Kuala Lumpur; Penang; Johor Bahru);

Philippines 9 per cent (Metro-Manila); South Korea 16 per cent (Seoul,

Pusan); Taiwan 18 per cent Taipei; Kaohsiung); Thailand 7 per cent

(Bangkok)



- Establishments: business and industrial establishments with over 50

employees in Hong Kong and Singapore, and over 100 employees in the

other six countries are included. In addition, banks, insurance

companies, multinational accountancy and legal firms, management

consultants, major hotels, business schools and subsidiaries of the

largest multnational firms are included regardless of the number of

employees.



- Individuals: heads of company and functional area, e.g. CEO, managing

director, head of finance, head of sales and marketing.



HONG KONG: NATIONAL TITLES (air)

AIR

(%)

DAILY

Apple Daily 49

Hong Kong Economic Journal 22

Hong Kong Economic Times 35

Hong Kong Imail 6

Ming Pao Daily News 22

Oriental Daily News 35

Sing Pao Daily News 6

South China Morning Post 47

The Sun 9

WEEKLY

Next Magazine 53

South China Sunday Morning Post 42

MONTHLY

Capital 9

Hong Kong Business 6

Hong Kong Economic Journal Monthly 12

ASIA: AVERAGE ISSUE READERSHIP (air)

AIR AIR

(000) (%)

DAILY

The Asian Wall Street Journal 41,042 17

The Financial Times 13,725 6

The International Herald Tribune 14,919 6

USA Today 5,882 2

WEEKLY

Asiaweek 39,150 16

Businessweek 34,861 15

The Economist 23,234 10

Far Eastern Economic Review 32,257 13

Newsweek 43,889 18

Time 42,156 18

Yazhou Zhoukan 23,186 10

FORTNIGHTLY

Forbes 20,685 9

Fortune 38,598 16

MONTHLY

Asia-Inc 9,573 4

Asiamoney 11,998 5

Asian Business 31,996 13

The Asset 4,169 2

Business Traveller 15,448 6

CFO Asia 18,152 8

Finance Asia 10,693 4

National Geographic 35,461 15

Reader's Digest (Eng) 34,214 14

Reader's Digest (China) 19,723 8

SINGAPORE: NATIONAL TITLES (air)

AIR

(%)

Daily

The Business Times Singapore 58

Lianhe Wanbao 15

Lianhe Zaoboa 25

The New Paper 26

Project Eyeball 7

The Straits Times 85

Weekly

Lianhe Zaobao (Sunday Edition) 26

The New Paper on Sunday 24

The Sunday Times 81

Monthly

Economic Bulletin 10