The decision will see ACP, along with the sub-contracted sales agent Asian Integrated Media, take over seven magazines in total — Cathay’s inflight Discovery, Entertainment Guide, duty free magazine The Shop, Marco Polo title The Club and Cargo Clan, along with two Dragonair reads, Silkroad and Sky Mall. It has already cost around 20 Emphasis editorial and design staff their jobs, and some estimate close to 30 per cent of its annual revenue in one hit.
It’s hardly a secret that the Cathay account, on which Emphasis Media was essentially founded more than 25 years ago, was something of a cash-cow for the company, and observers are wondering how it will now survive.
“It’s a massive blow, because it represents a huge percentage of its revenue. It is going to be extremely hard to make up that loss, because there are not that many big custom contracts out there,” says a source who declined to be named because of the sensitivity of the issue.
Publicly, Emphasis chiefs claim that while the loss does hurt the company, the future of the publishing house is assured, with a raft of upcoming projects and a new Singapore operation pointing to positive times ahead.
“Although parting ways with Cathay is not easy, we move forward with strong commitment to existing clients and expansion plans,” says Emphasis Media MD Monica Woo, who has been promoted to chief executive of a newly-created custom publishing division, effective next year.
“We have several new magazines that we’re working on, our new Singapore operation is coming together and we have a new office set to open in October to manage the Singapore Airlines’ Priority and Lifestyle Privileges publications, and SilkAir’s Silkwinds to commence in January 2008,” she adds.
But sources point out that while Emphasis has retained the contract for inflight entertainment at both Cathay and Dragonair, it has critically lost the lucrative Gulf Air and Korean Air accounts in recent years, which some estimate could total as much as 60 per cent of the company’s sales earnings.
Unconfirmed reports also suggest that staff have voiced their displeasure with management in an internal memo to the company’s Swiss-based parent, PubliGroup.
Some media agency sources say early indications suggest Emphasis will begin shifting its focus into other custom publishing opportunities in other sectors in a bid to make up the revenue shortfall, which may yet prove to be a smart decision. “We’ve heard it will be transforming its business, focusing on other custom publishing sectors,” notes one source.
“It still has a few airlines like Hong Kong Airlines and Macau Airlines, along with SIA, but Cathay will be a huge loss. But, I think it might just survive if it transforms its business.”
