WORLD: MEDIA ANALYSIS - Chinese get ready to play the fame game with launch of OK!

OK! magazine has its sights set on the biggest market in the world, Richard Lord says.

OK! magazine may be suffering from a declining circulation in the UK - it was down nearly 15 per cent at 489,882 in the latest set of ABCs - but that could look like small beer if the magazine cracks its next market. Because OK! is set to launch in a country where its potential readership could be more than one billion: China.

Massive population aside, Northern & Shell's decision to license its celebrity magazine to the Shanghai company Cinezoic seems a pretty odd choice for OK!'s first venture overseas, before the US, for example. China, after all, isn't an easy market to conquer, with strict government regulation still in place and a potentially endless raft of competitors. Plus, the OK! name is completely unknown in the country, and Northern & Shell's partner is primarily a film and television company, with no magazine experience.

And yet, crazy as it may sounds, it might just work. The existing competition is variable in quality, the Chinese have an apparently limitless appetite for reading about wealth and success and, with a mushrooming middle class and growing disposable incomes, it could be a magnet for advertisers.

That's certainly the hope of the Northern & Shell joint group managing director Martin Ellice. "We see China as being absolutely huge," he says.

"With a brand such as OK!, we believe it's just a question of time. The magazine is a phenomenon - it's a world-leading brand - and we've been approached by a number of companies in other countries. We were approached by (our licensee in) China in the middle of last year; it saw OK! as the leading celebrity magazine and found that it absolutely suited their needs."

Northern & Shell's Chinese partners are an interesting bunch. As the name suggests, Shanghai Cinezoic Film & Television's background takes in everything from feature films from up-and-coming young Chinese directors to documentaries for the Discovery Channel. OK!, which is now expected to launch in the spring (it had originally been slated for February), is its first print product, but the managing director, Sarah Chen, says the company has been busily taking on people with publishing experience, particularly in the celebrity field.

The company also owns an advertising agency. Chen says she's hoping, in the kind of cross-media manoeuvre that might in some places be seen as a conflict of interest, but which easily passes muster in China, that several of its clients will advertise in OK!

As yet, the Chinese OK! is without a final sales plan. In terms of content, the plan is to mix half local content - covering greater China (which includes Hong Kong and Taiwan), Japan and Korea - and half international content, taken from the UK OK!

The magazine will initially be monthly, with a modest target circulation of 30,000, rising to 80,000 bi-weekly in the second year of publication, and 200,000 in the third year, when the company is planning to introduce one of the more unusual publication frequencies you'll hear of: one issue every ten days.

"More and more people in China are interested in celebrity news," Chen says. "Entertainment is only just beginning as an industry here. The quality of magazines is so bad. I think the competition is not yet real in China."

Cinezoic's trump card, she says, will be access to celebrities through its film work, and also its government connections, the importance of which cannot be over-estimated in China's red tape-strewn regulatory world: "With our company's background, we know how to deal with the government - we've spent a lot of time with officials - and we know the Asian stars well."

Chris Walton, the chief executive of MindShare China, says that if the product is right, OK! could clean up: "I think the magazine market will continue to thrive for the forseeable future, so there is no reason why they should not do well. Overall ad budgets continue to go up and decent mags are already oversubscribed in terms of ad-page demand. At the same time, continuing TV inflation coupled with recent government regulations reducing the amount of primetime minutage could force more advertisers to search for media options in print."

But he warns that the title will not be able to get away with charging premium ad rates, and points to an increasingly crowded market, which now contains more than 9,000 magazine titles and will only expand further.

"I think the main competition they will face probably does not exist yet," he adds. "If they come up with a differentiated proposition that attracts readers and advertisers, then they will be copied, and copied quickly."

Alvin Chen, the emerging media director of Starcom MediaVest China, says that China's complicated media environment and the massive cultural differences from the UK make it hard to judge OK!'s prospects: "But it will need a long time and a lot of promotional expenditure because it is not well known in China."

For MediaCom's regional director of research, Adrian King, OK! will need to answer a few questions. "First, print production quality is hugely variable in quality, and they'll need to make sure it's up to international standards," he says. "Second, can we book isolated markets? I want to be able to book just Shanghai or Beijing or Hong Kong or Taiwan."

Sarah Chen's reservations about competitors' quality aside, he thinks the magazine will be stepping into a very crowded market.

That doesn't appear to be hampering Northern & Shell's ambitions, or Cinezoic's. Ellice says that his company plans to launch OK! in other parts of Asia, and elsewhere. India is a priority, as are Russia, the US and even Spain - which means OK! parking its tank very much in its main opposition Hello!'s front garden.

Sarah Chen claims that Cinezoic is talking to a range of other magazines about similar licensing deals, while Ellice adds that OK! "could be the first of many titles we launch in China", describing it as the company's flagship there. Although it has to be said that Northern & Shell might struggle to get licences to publish most of its other existing titles in the country.


The market OK! will launch into has been a pretty much non-stop bull run since the opening up of China's economy and the consequent mushrooming of its media sector triggered by the economic reforms of the late 70s on. The country had just 930 magazines then; now it has 9,029, according to official statistics. Still, that's not particularly high for a country of more than 1.3 billion people; the US, for example, has almost three times as many. But with an economy growing at around 8 to 10 per cent a year, there's plenty of room for expansion, and for more spending on magazines by advertisers. Total adspend was forecast to stand at RMB51.57 billion (£3.69 billion) for the whole of 2003 by ZenithOptimedia, rising to RMB64.62 billion in 2005. Magazines command only 2.8 per cent of that, however. The agency forecasts RMB1.44 billion spent on magazines during 2003, rising to RMB1.9 billion by 2005. That compares with just RMB527 million in 1997, and RMB184 million ten years ago.


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