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FIPP Conference 2002 – Seoul Korea

FIPP 2002's theme:Magazine Media Welcomes the Digital Age:

Making Technology Work for Magazines

Session VI-A - 14:45-15:45 Thursday 18 April 2002

Challenges To the Future of Magazine Distribution in the Asia-Pacific region

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Chairman:

• Louis de Bourgoing, COO, Hachette Distribution

Services, France

Speakers:

• Yong-Kook Kim, President, International Publications

Service (IPS), Korea

• Masahiro Oga, President & CEO, Shogakukan Inc,

Japan

• Gordon Lang, Regional Manager, Deutsche Post

Global Mail, Singapore

Introduction to the session

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• Branch of Lagardère Group

• 2001 Key Figures:• Sales: 4.3 billion euros• 13,000 p.• 30 companies,19 countries: Europe (AMP, SGEL, Naville,

Saarbach…), USA-Canada (Curtis, LMPI…), China (Hua Dao), Australia-Singapore (Newslink)

• 2 businesses: • 50% Press Distribution

• the only multinational domestic & international press distribution group

• 50% Media Product Retailing• in travel locations: 1,000 Relay in stations and 80 airports• in high street: Virgin Megastore in continental Europe

• A press specialist: 66% of its turnover

Hachette Distribution Services (HDS)

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missing market figures: NZ, Indonesia, Vietnam, South Af, Canada, South-Central America, Middle East…

Asia Pacific Magazine Market

Domestic Magazine market + Import marketHDS estimates

5 CH

INA

Domestic Magazine market + Import marketHDS estimates (Korea: KMA)

Asia Pacific Magazine Market

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1,000 Magazine Publishers

Post office National Distributors (national and

regional offices + field force)

subscriptions

by post offices

(60%*)

Local post offices Independant wholesalers (500/1,000)

Retail (40%):

Independant street newsstands: 10/20,000

Post office newsstands: 5/10,000

Kiosks chains: 4/5,000

Convenience stores and others: 2/4,000

The Chinese model

*% in value (still large volume of titles subscribed by work-units)

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HUA DAO CompanyThe best help to

publishersfor National Distribution

of local titles in China

Hua Dao in 2002:50 titles

12 offices60 people

300 client wholesalers

HUA DAO a fully-owned subsidiary of HDS

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1,000 Magazine Publishers

(2,463 magazines)

Retail (65%):

Bookstores (mainly small independents)12,000

Convenience Stores 2,000

Travel retail stores 420-450

(Seoul subway) (270)

Street Kiosks* 1,000-1,500

data: Source KMA

* Associated with bus-stops: only dailies and a few weeklies

The Korean model

Subscriptions

(35%)

500 wholesalers

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1,000 Magazine Publishers

* Publishers owned

TOHAN* NIPPAN*

Keitokusha, Takiyama,…

Magazines & books distributors

5 main others

Magazines & dailies distributors

The Japanese model

subscriptions95%

5% Nikkei-

BP…

JR unions/subsidiaries

Retail stores:Travel retail 5,000

Bookstores 8,000 8,000 4,000

Convenience 20,000 14,000 4,500 8,500

own regional wholesale

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Single copy sales:

slower or negative growth, except China less big sellers but more specialized titles market shift from independent stores towards chains

and travel points

Subscription:

growth for specialized titles rising cost of postal services

Due to recent downturn in advertising markets,

increase of the share from copy sales

Market evolution

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To react against the increasing cost of distribution:

need for productivity gains: concentration of wholesalers, pay on scan (?), …

need to review processes in partnership with publishers

China, South Korea, Taiwan…: how to manage and structure hundreds of independent wholesalers and retailers ?

To professionalize the retail network:

sophisticated marketing and merchandising techniques

promotion of higher allocation of shelf space retail marketing program

Challenges to the future of Magazine Distribution in the Asia-Pacific region

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To consider new subscription techniques:

telemarketing (Korean experience: Mr. Kim’s presentation)

open-ended subscription Japanese experience (Mr. Oga’s presentation)

To develop export/import of Asian titles:

subscription: new actors such as Deutsche Post (Mr. Lang’s presentation)

Single copy sales: to test distribution of more titles

Challenges to the future of Magazine Distribution in the Asia-Pacific region