Publications now have to deliver a profit or "consolidate". To put this into context, there were 9,029 magazines and 2,137 newspapers published in 2002, of which at least 70 per cent were believed to be unprofitable.
Many of these were Government and trade publications, massively subsidised by the state. This is part of a concerted Government drive to clean up all unprofitable state-owned enterprises or related sectors, to make them fitter and healthier as China opens up to the greater challenge of foreign competition as part of its commitment to the WTO. For the print sector, this is resulting in massive consolidation as titles either amalgamate or close. China is already one of the largest print markets in the world, generating advertising revenue of more than US$2.5 billion in 2003. This represents a 40 per cent share of the China advertising market (newspaper medium taking 37 per cent, with magazines taking three per cent), marginally behind television's slice of 42 per cent.
The print medium has already seen significant change over the last five years, mainly in the consumer sector and has largely been driven by advertiser and commercial needs. These changes are visible at street level, which are inundated with glossy, highly colourful and even risque covers of consumer titles all competing for prime positions in brand new, Parisian-style newsstands. Domestic titles sit alongside the best known international magazine brand names. Colour features and ads splash daily, evening and weekly newspapers.
Consolidation will make the publishing sector more robust, commercialised and accountable. The economics of a title's survival, as it is in most other countries, will depend on generation of advertising and subscriber revenues. This will require more relevant editorial, sharper quality print stock and better distribution to attract new readers, supported by more aggressive marketing to advertisers.
Overall print advertising revenue will continue to grow to around $4.3 billion; it will be a leaner industry as state subsidies are cut and unprofitable titles fold, down to 4,000 titles from 11,000 at present; there will be more international publishing groups in China with an expanded portfolio of print-related interests; many print titles will be part of mega media owner groups with cross-media interests; there will be some test case, majority foreign-owned specialist and special interest magazines but tightly controlled; still no foreign publisher access to news media; syndicated readership studies will be some of the best in the world; there will be recognised independent circulation audits for major consumer magazine titles but still no circulation audits for leading newspapers. As is characteristic of the China market, there has been much change already and yet still more to come.
