Cahners goes out on the Rim; heavy investment required to produce a magazine that's viable in the Asian market

Folio: The Magazine for Magazine Management, Feb 1, 1991 by Warren Berger

Heavy investment required to produce a magazine that's viable in the Asian market

NEWTON, MASS.-Could the Pacific Rim be the new frontier for expansion-minded business publishers? Ask that question of Allen Furst, publisher of Cahners' nine-month-old Electronic Business Asia (EBA), and you're likely to get a lukewarm response. Though Furst is bullish on his new magazine, and on the advertising climate of the Far East in general, he offers a caveat to would-be expansionists: "Starting a magazine here," he says, "demands a lot of work and deep pockets."

Cahners has provided the latter, pouring an estimated $10 million into the launch of the Hong Kong-based trade magazine, which is a spin-off of the company's Electronic Business. As for the work, a good deal of that has fallen to Furst and editorial director Lewis Young, who've had to contend with such complications as multiple-language translation, poor Indonesian postal service and Singaporean humidity so high that it melts magazine covers.

Despite all of that, however, Electronic Business Asia-distributed in nine countries, with heaviest concentration in Japan, Korea, Taiwan, Hong Kong and Singapore-seems to be off to a healthy start. According to Furst, who regularly shuttles between Cahners' Massachusetts headquarters and EBA's office in Hong Kong, the magazine has already qualified more than half of its 41,000 circulation, and expects to achieve 100 percent direct-request status within a year. And EBA, which carries high-tech product advertisements targeted at the magazine's managerial readership, has exceeded company projections by averaging more than 40 pages of advertising an issue, even though the magazine is sold at a CPM considerably higher than that of the American version. Most advertising is sold overseas, although the sales staff on the American magazine does sell pages in the Asian version and contributes about a third of the magazine's advertising.

Following ad base overseas:

The decision to expand to Asia was based on industry trends, says Furst, who notes that "more and more of the electronics industry is moving to Asia, so we're simply following our ad base overseas." But it wasn't an easy move: The publisher points out that the magazine has had to invest heavily in circulation and in editorial to produce a magazine that's viable in the Asian market.

Cahners set up a staff of 17 in Hong Kong, including 10 editors. To ensure that the magazine would be in touch with Asian issues and viewpoints, EBA was staffed entirely with local journalists (most are American or Canadian expatriates), headed by Young, a former Business Week editor. Editorially, EBA is independent from its American sister magazine, and there's very little overlapping of stories. "You simply can't get away with repackaging editorial from the U.S.," Furst says.

The company also determined that it couldn't get away with publishing only in English, although that would have been the easier and cheaper way to go. instead, Cahners, whose extensive advance research on the market showed that even English-speaking readers prefer to read in the local language, invested heavily in multi-language capabilities. While the bulk of EBA is in English, each magazine contains a 16-page supplement, a selected part of the magazine written in either Japanese, Korean or Chinese, depending on where it's distributed. Multi-language translation hasn't always gone smoothly: According to Young, initial attempts to convert copy to japanese by using a Hong Kong translation service yielded stories that "would have caused Japanese readers to fall about laughing."

Developing circulation also took some work, and cost Cahners close to a million dollars, according to Furst. "If you were starting a magazine in the United States," he says, "you'd simply go to established list brokers. But in Asia it's much more difficult because the quality of lists available is not up to U.S. standards." Consequently, the magazine had to develop its mailing list of 240,000 by using information pulled from Cahners' international trade show database.

The magazine competes with three other Pan-Asian electronics titles, all with smaller circulations. Two of them are from Western publishers: Long Island's CMP publishes Electronic World News, while Elsevier offers Electronic Product News Asia. Furst characterizes the Asian ad market as "competitive and a bit nervous-Asian advertisers are watching the American market and developments in the Mideast very closely." Still, he says, electronics industries in a number of Pacific Rim countries are growing by 15 percent or more, "which is pretty vibrant compared to the U.S. market."

Furst says EBA is serving as a pioneer for Cahners; company president Terry McDermott has expressed interest in launching additional titles in Asia if it does well. For now, Furst is pleased with the magazine's progress, and believes it has adjusted well to local marketing conditions, which can be extreme. To deal with the humidity, for instance, EBA is using polybags, and to overcome postal difficulties in some regions, it has turned to private delivery services. "In this market," Furst says, "a publisher must be able to adapt."