Publishers look to China and India to help them weather recession

In China, inspirational business books such as Who Moved My Cheese and family health titles compete with the latest blockbusters; in India, classics from Agatha Christie and Enid Blyton vie for shelf-space with homegrown authors and the penned advice of billionaire IT entrepreneurs; while in South Africa, the boarding school antics of John 'Spud' Milton have captured readers' imaginations and created a Harry Potter-like craze.

Across the world, the appetite for English language books is booming and publishers struggling under the weight of the recession in their core markets of the US and UK are increasingly turning their sights overseas. Random House, for instance, yesterday announced that the record-breaking first print run of 6.5 million copies of The Lost Symbol, Dan Brown's follow-up to The Da Vinci Code, will include over half a million for overseas territories including India and South Africa, an unprecedented number for a new fiction title.

Publishers from across the globe have gathered in London this week to discuss how to exploit this growing opportunity. This year's London Book Fair has a distinctly Indian flavour, with heavyweight authors such as Vikram Seth and Amartya Sen among the 48 writers appearing, but delegations from China, Russia, Africa and the Arab world will also be there to meet the estimated 16,000 publishers that have come to showcase their catalogues to the rest of the world.

A combination of the recession, which has pared back consumer spending, and a longer-term demographic change brought about by a fall-off in population, is hitting book sales in the US and Britain. Both markets are still the largest for English language publishers, but growth has stalled. The US market was worth an estimated $24.3bn in 2008 while sales in Britain were about £3bn. Last year, book sales by volume in the US dropped 6% on 2007, while in value terms the drop was 2.5%. In Britain the drop was more pronounced, with the volume of books down 4% and value down 6%, spurred lower by aggressive price competition in the major book chains and supermarkets.

Differing tastes

In contrast, overseas English language markets are positively booming. India is the world's third largest English language book market and has been growing at about 10% per annum for several years. Research by UK Trade & Investment (UKT&I), which is using the Book Fair to encourage British publishers to export more, and the Publishers Association estimates that the market was worth about £1.25bn in 2007, with publishers estimating that about half that amount was English language books.

The Chinese market was worth about £7bn in 2007 - with almost a quarter of a million titles producing a total print run of 6.3bn copies - but its English-language market is small by comparison with India and UK exports to the country run at about £10m.

The South African book market was worth about £260m in 2007, with three quarters of those sales going to English language books, and has doubled in value in four years, while the enormous ex-pat community has helped fuel growth in the book market in the United Arab Emirates, with UKT&I estimating that book exports have doubled in the past six years.

Tastes differ across these markets, according to publishers. In China "books about earning money and making a family healthier just sell forever", according to Jo Lusby, general manager of Penguin in the country. The publisher has also done well with Elizabeth Gilbert's account of the spiritual gap year she took to recover from her divorce, entitled Eat, Pray, Love.

Who Moved My Cheese, the motivational book by Spencer Johnson which celebrated its 10th anniversary last month, is one of China's all-time best-selling translated titles with several million sold to date. Film tie-ins also help sales, with Penguin's The Kite Runner receiving a boost from its recent film adaptation, while former Fed chairman Alan Greenspan's book The Age of Turbulence has been a surprise hit. Many English books in China are used as educational tools, with people using them to improve their skills in a language which is now spoken by over 300 million people in China.

In South Africa the market has experienced something of a publishing sensation in recent years with the boarding school antics of Spud and his gang - the Crazy Eight - helping to expand the book reading populace. The first tome has already sold well over 125,000 copies since its publication four years ago and while that may not sound like much there are only an estimated 800,000 general book buyers in the country's population of just under 50 million people.

But with its booming population, of whom 350 million speak English, it is no surprise that most of the publishers at the London Book Fair are turning their attention, eagerly, to India.

"India is an incredible growth market at the moment," says Alistair Burtenshaw, the exhibition director of the London Book Fair. "It provides fascinating business opportunities in almost all sectors, and that's absolutely the case in publishing."

The trade show coincides with a growing push by western publishing companies to ramp up their operations on the subcontinent. Later this month Hachette is joining the ranks of Penguin, HarperCollins and Random House by publishing its first new book in India - My Friend Sancho, by Amit Varma.

English language publishing in India stretches back to the days of the Raj, and the likes of Macmillan and Longman have had a presence as educational publishers since the 19th century. For many decades, western publishers exported their books to India for distribution by local companies, while domestic operators also produced books in English. But the arrival of Penguin in 1987 marked a decisive change, establishing a berth in India for a major international publishing house for the first time.

Others followed: HarperCollins set up a joint venture in the 1990s and is now in partnership with the India Today group, then after ownership rules changed earlier this decade Random House and Hachette both set up fully owned operations.

Curiosity

With 180 English titles published a year - and some in Hindi, Marathi and Urdu too - Penguin retains first mover advantage. It has also outsourced 130 jobs at its Dorling Kindersley division to India, where Eyewitness travel guides are now produced.

"We're far and away the leading English language publisher in India," says Penguin chief executive John Makinson. "It's a more competitive environment than it was but we have a tremendous headstart."

Publishers are also noticing a new mainstream literary culture that has transformed book-reading from the preserve of an educated elite into a cerebral leisure activity for India's emerging chattering classes.

"It's not that people have suddenly got interested in books and reading, it's that the nature of the interest is coming more to resemble the nature of the interest you might see at Cheltenham, Oxford or Hay-on-Wye," book festivals says Simon Littlewood, the international director at Random House. "There's a curiosity about authors and the authorial process, building on an established bedrock of literacy and literary interest."

The hope now is that this bedrock, both in India and other overseas markets, will be sturdy enough to support a growth industry while UK and US markets hibernate through the recession.

(Guardian)

China Daily launches U.S. edition

NEW YORK, Feb. 23 -- China Daily, China's national English-language newspaper, formally launched its U.S. edition here on Monday.

Targeted at North American businesses and observers of China's rapidly-changing economic, cultural and political landscape, China Daily's U.S. edition will feature reports of local events related to China in the United States, according to a company statement.

The new edition will also have analysis and opinions from American and Chinese thinkers and business leaders, and personal profiles of noted contributors to China and America's growing understanding of each other.

"As a widely recognized authoritative English media outlet in China, China Daily has been publishing in the United States since 1983, only two years after it was founded," Qu Yingpu, deputy editor-in-chief of China Daily told Xinhua. "But it is the first time we publish a specialized edition for our readers in North America. It is a milestone for us."

The launch of the new edition coincided with a deepening economic recession worldwide, which has prompted both Chinese and American leaders to call for joint efforts to combat the crisis.

"It is our responsibility to our readers to do on-the-ground reporting here in America," said Qu. "We also see it as part of our social responsibility to promote common understanding among people engaged in the two economies."

Qu rang the opening bell at the NASDAQ Stock Market in Times Square, New York, on Monday to celebrate the launch of China Daily's U.S. edition. He was joined by Bethany Sherman, senior vice president of NASDAQ, Stephen Orlins, president of the National Committee on U.S.-China Relations, and Huang Xueqi, secretary-general of China General Chamber of Commerce-USA.

China Daily has a worldwide readership of 300,000. It is also the publisher for China Daily Hong Kong edition, China Business Weekly, Shanghai Star, Beijing Weekend, 21st Century and China Daily CEO Roundtable.

(Xinhua)

China pushes to improve its image in west

China is pushing its state media to create credible, appealing news for an international audience, in an attempt to spread a more favourable image of the country in the west.

The plan, backed by at least Rmb30bn ($4.4bn, €3.3bn, £3bn) in government funds, comes as Beijing looks back on a year of public relations disasters.

The first step would be the launch of a second national English-language newspaper by Global Times, an affiliate of the Communist Party's mouthpiece People's Daily, in April, observers said.

Xinhua, the official Chinese news agency, is preparing to enter the television business. A person close to Xinhua in Europe said that Xinhua, along with bureaus in other news centres abroad, was expected to be expanded to accommodate television. A similar global push is under way at China Central Television (CCTV), the main state broadcaster.

Beijing is said to be giving Xinhua and People's Daily cash injections of Rmb15bn each to pursue the projects.

Guo Ke, a journalism professor at Shanghai International Studies University, said the government had picked Global Times rather than People's Daily because the affiliate had created a market-oriented newspaper.

Global Times declined to comment. People's Daily, Xinhua and CCTV did not respond to requests for comment.

The General Administration for Press and Publication, the media regulator, referred questions about the funds to the Ministry of Finance. The Ministry of Finance referred to GAPP.

(FT)

Online Advertising Gets Boost in China

BEIJING -- Online advertising, which has gained traction in China in recent years, may be one of the few sectors to benefit from the country's sharp economic slowdown, as companies here look for more cost-effective ways to plug their products.

Ad-industry executives and analysts say the need to trim costs, while still trying to woo customers, could cause the online, or digital, portions of companies' ad budgets to grow, giving a boost to a market that has grown rapidly but remains puny compared with its size in the U.S.

"The economic crisis is...prompting a lot of our clients to rethink their marketing spending," says Karl Cluck, a Shanghai partner at Mindshare, a media-buying unit of WPP PLC, which has worked with clients including Nike Inc. and Motorola Inc. in China. There is "a lot more interest" in digital advertising, he says, especially for marketers of youth-oriented products.

China already boasts the world's largest population of Internet users, not to mention the most mobile-phone subscribers. But companies in China allocate 5% or less of their ad budgets to the Internet, depending on the estimate, compared with more than twice that share for companies in the U.S.

That has been changing, as young Chinese consumers gain more market clout and companies become more comfortable with the Internet in China. Nielsen Co. estimates that online ad revenue in China in the third quarter grew 42% from a year earlier to 3.72 billion yuan ($541 million).

That rate was more than double the growth in spending on television, newspaper or magazine advertising.

Ling Xiao Tong, center, a winner of Coke Zero's online 'Be Bond for a Day' contest.

Online video sites like Youku.com and Tudou.com are getting big advertising clients, including Samsung Electronics Co., Mazda Motor Corp. and Nike's Converse Inc.

Marketing collaborations between brands and Chinese Web platforms also are becoming more common.

Last month, Coca-Cola Co. did an Internet campaign for its Coke Zero line, asking users of Xiaonei.com, a social-networking site owned by Beijing-based Oak Pacific Interactive, to submit photos to show why they deserved to be the next James Bond.

Winners received a "day of James Bond," including a ride in a helicopter and an Aston Martin sports car.

The near-term outlook for online ads in China isn't entirely positive. Big advertisers in the auto and real-estate sectors are already feeling the effects of the slowing economy, and if overall spending falls sharply, online media will feel a hit.

Jason Brueschke, a Citigroup analyst in Hong Kong who covers China's Internet market, says the impact of China's slowing growth over the next three quarters may be greater than people realize. Even if marketing budgets being drawn up now are strong, "it doesn't mean the budgets will actually get spent," he says.

In a deep downturn, Mr. Brueschke says, marketers will need to choose the most valuable advertising, which is still television. Indeed, China Central Television, the monopoly state broadcaster, last month took in $1.4 billion for 2009 in its annual auction of prime-time commercial spots, a year-to-year increase of 15%.

Shaun Rein, founder of Shanghai-based consulting firm China Market Research, sees the CCTV auction as a positive sign of advertiser sentiment. The auction shows "ad prices are still going up in China," he says. "With most companies that we've worked with in China, they're keeping their marketing budgets kind of stable," but looking for ways to get more bang for their ad dollars through channels like the Internet.

Mr. Cluck projects that the Internet's share of some companies' ad budgets in China could increase by a percentage point over the next year. "That's where customers are going to be," he says.

That means that even if the overall ad pie shrinks, Internet media will have a greater share of the total, and be well-positioned for any rebound.

Citigroup's Mr. Brueschke says money being spent for online advertising will more likely be allocated to bigger established Internet companies like Sohu.com Inc. or Sina Corp., rather than edgier sites like the video-sharing Web sites that have gained popularity in recent years.

This happened during the Olympics; after the Games, China's top two Web portals posted much stronger growth while other large Chinese Internet companies, including Tencent Holdings Ltd. and Netease.com Inc., underperformed relative to expectations.

(the wall street journal)

China's New Media Blossoming as Business Models Revamp

BEIJING, Dec 08, 2008 (BUSINESS WIRE) -- In a vast market like China, where advertising spends per capital only approximate 2-3% of the level in the US, the blossoming new media sector is likely to see the fastest growth in consumer demand and wealth creation, according to a recent report by Z. H. Studio. New media leaders are outpacing the old media players as the key driver of innovation, both technology- and business-wise, as well as enhanced value chains.

Just about two years ago, Focus Media was almost a synonym of the "new media" concept in China. The company spearheaded the all-in-one-digital-signage model and operated LCD screen ads in elevator lobbies 24 hours a day. After a high-profiled IPO at NASDAQ, the company's founder Jiang Nanchun became one of the richest men in China at the age of 33. Ever since, LCD screens have been popping up in supermarkets, buses, air flights, railway cabinets, parking lots, restrooms, hairdressing salons ... just everywhere you go you will see the screens operated by Focus Media - or its copycats.

Does the Focus Media model still stand for "new media" today? No longer. In most cases, people are not looking to be entertained - merely as recipients - by those "unavoidable" ads. Consumers like to get more "active participation" with the media.

Interactive instead of unilateral

Small wonder, then, user-generated content and ads have become new fad. KFC Group was among the earliest companies to experiment with guerrilla marketing on Internet. In 2007, it ran a campaign for a new product launch on BlogBus, a Shanghai-based blogging service provider somewhat like Six Apart. Over 200 users blogged about their off-line experience associated with the campaign and created prime buzz for the product. According to Dou Yi, founder and CEO of BlogBus, the site annually generates 10-million-RMB revenue from such product placement campaigns and well-known brand advertisers include Absolut Vodka, General Motor, Lenor, Gillette, Garnier, and L'Oreal.

"Many companies are turning to the Internet users to help with their marketing messages and ads are blending in with entertainment content," says Mr. Dou. "Brands create partnerships with leading influencers on the social web ... In the end, the best advertisements are those that don't look like ads."

James Li cannot agree more. The founder and CEO of Bihu, a leading technology firm specializing in IGA (in-game ads), contends that "pure ads" will have no future due to commercial forwarding devices in the digital entertainment age. It took his company four years to develop a system that enables game publishers to embed commercial ads on a real-time basis, without changing any source code. What's particularly inspiring to Li is the base of 70 million active online gamers in China, plus another 50 million non-active users.

"The fact that China is already the world's largest Internet and mobile market, without even having reached 50 percent penetration, means that Chinese companies can - and in many cases will have to - do things that companies in other markets will never be able to do in terms of scale," argues Steven Schwankert, Desk Editor of IDG News Service in Asia. "Therefore, they can experiment, and a smaller percentage of their customer base embracing something can be counted as a success."

The new media sector has seen experiments in all areas like video-sharing sites, wireless, broadband, avatars in second life, local map, social networking (SNS), and many more. The highly interactive platforms not only enhance the stickiness of media users but also scale back customer acquisition costs.

Making a historic mark

According to iResearch, one of China's most authoritative research agencies on new media, Internet users in China has amounted to 253 million by June 2008. The company's vice president Michael Ruan remarks at the Digital Media Summit 2008 in Beijing that the marketplace has seen an evolving trend of diverse revenue models among Internet-related businesses, and degree of consolidation is expected to drop.

"China leads the world in new in many ways; and I'm not sure that either people in China or in other markets like the U.S. realize it," says Schwankert, half-jokingly.

Indeed, Kevin Wang is one of those who do realize it. When he founded ZCOM - now the largest digital publisher of magazines in China - back in 2004, Wang was determined to make a major mark, by the Chinese, on the world of innovation.

Nowadays, any of the 40 million ZCOM users may browse through over 300 different magazines anytime, which offer an interesting blend of static and interactive content. The articles look like what we'd find in a typical magazine, but what's mostly appealing is the natural embedding of the interactive elements - only possible in the digital world. Interactivity generates the very accurate demo stats, which in turn creates an enabling platform for direct marketing campaigns by brand advertisers.

Among the company's most successful campaigns were for BMW, Intel, Braun, LG, L'Oreal, iPod, Siemens, EPSON and a lot of other well-known brands.

Over 9500 magazines and 2000 newspapers are circulating in China, 50% beyond the levels in the US, according to a recent report by Morgan Stanley. Kevin Wang believes that when numerous players are jockeying for position in the sector, ZCOM's strong brand awareness and "gateway" position in the virtual world creates a competitive edge.

Funded by Carlyle Group, ZCOM has also nurtured a cohort of collaborators - such as Toshiba (chip), Lenovo (PC) and Kingsoft (game) -- in distribution of e-magazine content.

"A lot of the new media companies are asset-light but network- and/or human capital-heavy," contends Edward Yu, CEO of Analysys International, a well-renown independent research firm specializing in TMT industry. "In China, new media players are outpacing their big [old media] brothers when it comes to digitalizing the product-distribution-service chain activities," Yu adds.

While most of new media players in China are overseas VC-backed, industry executives cite the importance of "keeping the business relevant to China". BlogBus CEO Dou Yi says the models of Six Apart, MySpace, Cyworld are not necessarily well-suited for China, where local customer insight - e.g. social context, consumption patterns, opinion leadership, etc. - serves as a key success factor for new media players.

BlogBus hosts over 5 million blogs now; and bloggers are typically higher-end, urban dwellers with decent purchasing power. "These groups tend to be both powerful influencers and early adopters," says Dou Yi. In that light, his company is establishing add-on platforms - ranging from free trial harbor, print media to live performance - with the aim to further monetize the BlogBus' user base.

Caveats and challenges

Still, the new media sphere in China is never without challenges. Relative to quality editorial content, the long-tailed UGC raises the search cost and therefore is typically hard to attract paid subscription, according to Liu Xiangming, Chief Editor of CEOCIO magazine, a 10-year-old journal jointly owned by IDG Group. He believes that new media practitioners will count, to a larger extent, on the scarcity and scalability - as "content creators are always scarce assets and it's critical to have teams that are able to scale up [content creation] in a sustainable fashion."

Regulatory may be another caveat. As state-owned assets, old media companies often benefit from favorable government policies. On the other hand, the inherently swift progress in new media space makes it difficult for policy-makers to keep up. Because of such a "lag effect", new media policies may sometimes create sharp volatility. That said, as a side benefit, new media appear to have stronger "immunity" than their old brothers. Also, regulatory restrictions prevent cross-regional ownership for old media companies; but new media are not subject to such constraints.

The economic meltdown will likely make many organizations conservative towards ads spending. As Edmund Li, a former 4A agency senior executive, warns, "try and err" costs may shift media buyers back to traditional, "proven" platforms, leaving new media companies vying for a smaller slice of the cake.

Despite the fact that global financial crisis makes many lower outlook, some players in new media sector remain optimistic. James Li of Bihu recalls the SARS epidemic period in 2003, in which the business of online gaming managed to double its size. "Our [online game-related] business enjoys a 'counter-cyclic' element: we see 'obsessive' customer loyalty in an economic downturn."

(Market Watch)

Tudou.com Partners With Sonic

NOVATO, Calif., July 23, 2008 ----Sonic Solutions, the leader in digital media software, today announced an agreement to offer a customized version of Roxio Buzz on Tudou.com, one of China's largest video sharing websites, which serves over 100 million videos every day. Roxio Buzz is an easy-to-use application that combines lightweight video editing features with straightforward online publishing functionality. The application will be offered as a free download to Tudou.com users to help them quickly prepare and post content to the site. As part of this strategic alliance with Sonic, Tudou will also begin to promote other Roxio-branded digital media products and services to its users.

"Tudou.com serves 100 million video clips to more than 10 million users daily and is constantly striving to enhance the user experience. With more than 210 million people now online in China, the opportunity to expand Tudou's current customer base and service offering is enormous," said Anita Huang, Vice President of Community & Marketing, Tudou. "Partnering with Sonic to offer consumers an easy tool to create, edit and post video content on the Tudou site is one more way we may deepen our service for Internet users in China."

"Our collaboration with Tudou provides a great platform for Sonic to access the world's largest population of Internet users," said Matt DiMaria, general manager, Roxio division of Sonic Solutions. "For the millions of consumers now online in China, Roxio Buzz not only helps make content creation and uploading as seamless as possible, it also serves as the perfect introduction to our intuitive line of Roxio-branded applications."

Roxio Buzz is an ideal client application for any video sharing site wishing to streamline the upload process and encourage greater consumer use. The editing functions offer a one-button tool for effortlessly trimming video content, options for adding appropriate search meta-tags and automatic optimization of bit rate and video file sizes based on the requirements of a video-sharing portal.

About Sonic Solutions

Sonic Solutions enables the creation, management, and enjoyment of digital media content through its Hollywood to Home products, services, and technologies. Sonic's products range from the advanced authoring systems used to produce Hollywood DVD and Blu-ray Disc titles to the award-winning Roxio-branded photo, video, music, and digital-media management applications and services. Sonic's patented technologies and AuthorScript media engine are relied upon by leading technology firms to define rich media experiences on a wide array of consumer electronics, mobile devices, set-top players, retail kiosks, and PCs. Always an innovator, Sonic has taken a leading role in helping professional and consumer markets make the successful transition to the new high-definition media formats and, through the Qflix platform, Sonic is defining new models for the digital distribution of Hollywood entertainment. Sonic Solutions is headquartered in Marin County, California.

About Tudou

Tudou (http://www.tudou.com) was the first online video sharing website, established in April, 2005 and has been the leading player in the China market for over 3 years. Tudou has headquarters in Shanghai and is committed to building the best possible Internet community platform enabling users to share their videos from any place, at any time, and through any connected device.

(PRNewswire-FirstCall via COMTEX)