A survey on foreign print media brands in China by Interfax came via the Shanghai Foreign Correspondents Club’s mailing list the other day. Its key finding was this: 83% of Chinese college students prefer foreign media brands.
Fons Tuinstra at China Herald quickly blogged his objections, intimating that the people at the Russian news agency had been inhaling psychotropic substances:
it is a pity we do not know who they have been asking the questions, since that often defines what kind of answers you get.
Fons may have been too busy to read the press release’s third paragraph, which said: “To further explore this inherent brand advantage our sector analysts conducted a focused exploratory survey amongst Chinese college students.”
Then he says media has never been part of the WTO process. But the Hong Kong Trade Development Council seems to suggest the contrary (see also this article in China Daily, though admittedly it’s not the most reliable source of information).
Fons is right, though, when he says advertising revenues have dropped in the print media. This Asia Sentinel article by a media consultant says newspapers like Beijing Youth Daily are losing revenue to online classifieds and outdoor advertising, although the overall growth in the industry is still strong.
He refers to a 2005 survey [download it at China Herald here] by Guo Liang, of the Chinese Academy of Social Sciences, on Chinese internet user behavior. He says the survey found that only 3% of the surveyed users said they look at online foreign content. The actual survey, however, says this:
Language: Internet users spend 85% of their time [emphasis mine] on mainland Chinese content, 8% of their time on overseas Chinese content, 4% of their time on mainland foreign-language content, and 3% of their time on overseas foreign-language content.
3% of time spent on overseas-produced (hosted?) foreign-language content is quite different from 3% of users having any interest in foreign content. Additionally, Guo Liang’s survey says this about perceptions of foreign media:
Generally, people trust the domestic news more than the foreign news, and they trust television, newspapers and the radio more than online news. Among the respondents, 88.6% trust domestic television, 79% trust domestic newspapers, 74.9% trust domestic radio, 58.9% trust foreign television, 45% trust the foreign radio, 43.9% trust domestic online news, and 29.6% trust foreign online news.
So about half the people surveyed said they trusted mainstream foreign media, and about a third trust foreign online news. The spread between that and the number of people who trust local media is not huge.
So if local internet users trust foreign media only slightly less for their news, which is a broader set of people, then is it plausible that in the narrower set of college students, that they merely have a preference for foreign media brands? It’s difficult to say but at least it puts Interfax’s 83% figure in context. And Fons, put your smokes away!
I’ve cut and pasted the Interfax press release after the cut (minus the little graph that came with it)
PRESS RELEASE: Interfax China research shows 83% of young adult readers prefer foreign media brands
Young adults show strong preference for foreign print media brands
Shanghai. September 5. INTERFAX-CHINA – An Interfax-China exploratory survey found that foreign print media brands have an inherent advantage amongst young adult Chinese consumers and are preferred over local media brands.
As one of the key research findings in the in-depth industry report, China Print Media Industry Review 2007, Interfax-China found that young adult Chinese consumers exhibit a strong preference for foreign brands amongst magazines, newspapers, books, and bookstores.
To further explore this inherent brand advantage our sector analysts conducted a focused exploratory survey amongst Chinese college students. Feedback indicated that foreign participants in the Chinese print media sector can readily take advantage of an inherent and clear advantage over those of local competitors.
A full 83% of respondents stated that they believed that foreign invested magazines are better than Chinese published magazines. Furthermore, this advantage in public perception extends beyond magazines to also include newspapers, books and bookstores (details provided in the full report).
This finding has very strong strategic implications for foreign companies competing within China’s print media sector which, thanks to the WTO, is now largely open to foreign investment. Although it is not necessarily very easy to navigate the required permits and licenses, with the notable exceptions of editorial and national level distribution, almost all other areas of print media are now largely accessible.
At present these markets have attained significant scale and are attracting a great deal of interest from investors around the globe. The future potential of these markets can be more readily put into perspective when considering the following;
As of 2007 China led the World Association of Newspapers global top 100 ranking with 25 Chinese newspapers topping the list by circulation volume.
Just the market for Chinese magazine readers alone is already 1.5 times as large as the entire population of the US, as out of China’s 1.3 billion people 55.3% of literate people read magazines in 2005.
The clear potential of these markets has attracted a number of foreign entrants, despite the general lack of transparency. In an exclusive briefing with the General Administration of Press and Publication (GAPP), Interfax-China learned that China has so far approved more than 30 publication international trading companies and launched 51 copyright contracts with a number of countries such as France, the United Kingdom and the United States. As of January 23 of 2007, a total of 52 foreign-invested publication distribution projects have secured the GAPP’s nod of approval since China’s accession into the WTO in 2001.
Although China’s government has generally opened up the print media sector all policy signs indicate that it will seek to maintain a very strong hold over the domestic news and information environment. As such participation in editorial, especially content relating to social and political news, is still tightly controlled and technically off limits to any foreign involvement. Given this need to influence the information environment it remains very unlikely that activities in this area will become open to foreign participation for the foreseeable future.
Despite this explicit ban on involvement in editorial there are in fact a number of indirect methods of maintaining some level of control over content for foreign investors. However, it should be noted that the government is only likely to be tolerant of participation in this area if content is positive or largely neutral to political or social issues. For example, consumer products, business education and language education are all areas in which foreign investors currently participate quite successfully.
If content is inoffensive to the government there are several approaches that have been successfully utilized. First, companies such as Cambridge, Oxford and Pearson-Prentice Hall have been able to launch whole series of educational materials that have been very successful in the market. For these products entry was accomplished by partnering with a local Chinese publisher who printed and distributed the materials under their name.
However, despite the partnership, ultimate brand control was maintained by the foreign partner. In the realm of magazine publication other quasi-legal methods have been used quite successfully, but with some clear instances of failure for the foreign partner. Please see the full report for more details, or contact the Interfax China Research Department to arrange an interview with the report editor. The full report contents are at the end of this document.