Fading ink in the China Daily: the decline of print media

Print or screen?

The China Daily today published a report about the decline of Chinese newspaper advertising revenues, without mentioning anything about its own operations. The article opens with a quote from 25-year old office worker Ren Xin, who says “Subscribing to a newspaper? Wow, that is my Dad’s job”.

The article is worth reading and contains a lot of interesting statistics, including the following:

– China has more than 100 million Internet users [more than 110 million was the last official count noted by Danwei at the end of 2005]

– 67.9 per cent of Chinese Internet users listed news as the most-used Web service [from survey by China Information Network Centre (CNNIC)]

– The World Cup section of leading Chinese Internet portal, Sohu.com, generated about 40 million yuan (US$5 million) during the event. From the article:

Chen Tong, senior vice-president of … Sina Corp, says his firm earned much more. He declined to reveal the figure, but adds that the country’s top cellular operator, China Mobile, alone paid 10 million yuan (US$1.25 million) for a title sponsorship of the World Cup section. Similarly, Chinese home appliance giant Haier had a similar sponsorship on Sohu’s World Cup section by paying 2.5 million yuan (US$312,000).

In stark contrast, GoalChina, the most widely read newspaper by Chinese soccer fans, reportedly secured only 20 million yuan (US$2.5 million) in ad sales linked to the World Cup.

– Newspaper ads sales fell by 5.1 per cent in 2004, and by 16.5 per cent in magazines compared with an average growth of 20 per cent in the previous 20 years. These figures are from The Blue Book of China’s Media by Tsinghua professor Cui Baoguo. “Cui estimates that the ad sales of China’s major newspapers in the first half of 2005 dropped by an average of more than 15 per cent year-on-year.”

– Hong Kong-listed Beijing Media, the advertising unit of popular Beijing Youth Daily, saw its net profit in 2005 drop by 94.8 per cent to 10.09 million yuan (US$1.28 million). From the article: “Tian Kewu, managing Editor-in-Chief of Beijing Youth Daily, says the newspaper has been hurt by the rapid rise of Internet media like Sina Corp in the past few years.”

– According to Shanghai-based iResearch, China’s online ad market was worth 3.13 billion yuan (US$391.2 million) last year, up 7.6 times from 2001. The market is forecast to hit 4.6 billion yuan (US$575 million) this year and 15.7 billion yuan (US$1.96 billion) by 2010. The revenues earned by ads agencies are not taken into account. China’s total ad market was worth 316 billion yuan (US$39.5 billion), according to Nielsen Media Research.

– By the end of last year, China had more than 16 million bloggers, and 52 per cent of white-collar workers in China keep blogs, according to career consulting firm CBP Career Consultants Co Ltd.

The article does not point out that not all is gloom and doom in the print media industry: with less than a tenth of the population online, and plenty of increasingly wealthy people above the age of 40 who tend not to spend much time online, print media will remain an important advertising channel.

On the same subject, there are some Economist and Financial Times articles about the Internet’s increasing importance to the advertising world linked below.