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March 28 2012

15:00

Mandarin-English luxury magazine boosts revenue for Observer Media Group

In the span of a decade, the number of visitors to New York City from China more than quadrupled. Ten years ago, 59,000 Chinese tourists visited the city. By 2010, the tally was at 266,000, according to the most recent data from the tourism research firm NYC & Company.

This wave of new visitors has brought an influx of cash to an otherwise recession-addled retail market. But the jump in visitors from China has also presented a magazine publishing opportunity.

In November, Observer Media Group — parent company of The New York Observer — and China Happenings jointly launched YUE, a bilingual Mandarin-English luxury magazine aimed at those affluent Chinese visitors and influential Chinese Americans in the tri-state area. Editor Chiu-Ti Jansen says YUE takes editorial cues from publications like Vogue and Departures, but serves a niche audience that hasn’t yet been served by the luxury magazine market.

It’s not just expanding into a niche — it’s expanding into another language. At a time when U.S. and U.K. publishers are looking for expansion overseas and international publishers want to break into English, Observer Media is pursuing a linguistic opportunity in its own neighborhood.

“We cater to the Chinese, and we do it in a bilingual way,” Jansen says. “Another thing is, the predecessors of Chinese publications in this country, they all end up being very culturally, traditionally Chinese. I never envisioned this as an ethnic publication. I know it’s a niche publication, but we start to be able to interact with both the U.S. and Chinese audiences in a much more avant-garde way. I call it a Chinese sensitivity: we are very sensitive to Chinese interests but it’s an international outlook…These people are not interested in coming to New York and shop like a Chinese [person]. What they are interested in is to learn to live as an international.”

One major area of focus is contemporary arts and culture: “Art buying is the ultimate symbol of luxury consumption in China,” says Jansen, who also looks for profile subjects who bridge the gap between East and West.

“We started with [pianist] Lang Lang, and then we had [designer] Jason Wu, and next issue our cover story will be [actor] Lucy Liu,” Jansen says. “You cannot just throw a New York or U.S. celebrity on the cover…But we also stretch the connections they know, and we challenge them.”

The magazine printed 35,000 copies for each of its first two issues, which were distributed to tour companies, luxury hotels, Chinese cultural centers in New York, as well as sent to about 8,000 Mandarin-speaking homes in the area. Those “very, very high end” readers include hedge fund managers and board members of New York’s major institutions. Getting advertisers like Chanel and Fendi was “a fairly easy sell” as a result, according to New York Observer editor Elizabeth Spiers.

“We have a lot of ancillary publications that have targeted a similarly high-income, affluent, well-educated demographic,” Spiers told me. “But YUE is original because we were looking at the luxury market from the business side of things, given the demand for luxury goods in New York among Chinese tourists.”

(In Chinese, “yue” means “invitation, promise, and rendezvous,” Observer Media says. It’s also the second half of Niu Yue, the Chinese name for New York.)

Spiers says YUE has been “very successful,” enough so that Observer Media Group is mulling the launch of a Los Angeles edition, as well as a location-based app that would serve as a food and retail guide for visitors.

“It’s something we’ve discussed, [but] we don’t have it in the works right now,” Spiers said. “You’ll notice that [YUE] is very product-heavy. It sort of tells you where to go to do your shopping and eating, so we’re thinking it probably makes sense at some point to integrate with a mobile app.”

In the meantime, YUE has snagged top luxury advertisers that have been otherwise elusive for Observer Media Group. The pages of YUE — both editorial and advertising — are lined with pricy ideas on how you can reinvent your wardrobe: Ralph Lauren ball gowns, Chanel diamond rings, Harry Winston watches, and J. Mendel minks.

“We have a lot of fashion, watches, jewelry, and shopping-related information because this is their No. 1 priority,” Jansen says. “According to New York City statistics, Chinese rank shopping first as opposed to food or concerts or other types of activities. We know we need to satisfy their interest in this aspect. I am fully aware of where their tastes stand, but I think the Chinese taste is evolving very, very fast. We have to convey the same message to our advertisers so they don’t have a fixed idea of what the Chinese want, because it’s a work in progress.”

October 13 2010

14:00

Does investing in print help the bottom line? Discouraging evidence from the San Francisco Chronicle

The Globe and Mail is the latest newspaper to double down on print — investing big money in a new, glossy, full-color format aimed at making the value of news-on-paper more clear. As Canadians kvell over the print redesign and read the national daily without the inky stain of newsprint on their fingers, it’s worth remembering that the San Francisco Chronicle made a similar move almost a year ago.

Last November, the Chronicle began printing its weekday front page, section fronts and select inside pages on high-gloss paper as a way to lure advertisers and strive for “magazine-quality production,” publisher Frank Vega and editor Ward Bushee said at the time. (The paper revamped its layout in February 2009.) It was an interesting move, considering that less than eight months earlier the paper, facing the threat of closure by its parent company Hearst, was shedding nearly $1 million a week. The switch was a result of a 15-year, $1 billion deal between Hearst and Canadian printing giant Transcontinental, which opened a $200 million plant near San Jose.

Looking at the numbers, it’s hard to see any improvement from the move. Circulation numbers are still in decline, and the Chronicle has scaled back glossy printing to its Sunday paper only. Which raises the questions: Is glossy paper worth it, both in terms of circulation and advertising? And if readers enjoy a smoother feel to their paper, does that warrant the extra cost?

“I don’t think so,” Chronicle president Mark Adkins told me. “You would have to be part of a broader strategy that would include more commercial printing and higher consumer pricing. It’s not a good tactical move for other papers.”

Lack of advertiser response

When it switched to glossy, the Chronicle circulated around 251,782 weekday papers, a 26-percent drop from the previous year. By March 2010, weekday circulation was down to 241,330. The economy certainly takes part of the blame, but the marketing power of a classier kind of newsprint doesn’t seem to be having much of an impact. It costs about 30 percent more to print on the new heat-set presses, which are rare (and expensive) in the newspaper industry.

“On the ad side, advertisers have not responded to it at all,” Adkins says, although the Chronicle wouldn’t reveal specific ad revenue numbers. When the Chronicle switched to glossy, it had “no advertisers lined up,” Adkins adds. The move was primarily aimed at consumers, to present a more luxurious product. But to some extent, that’s what the Chronicle expected when it restructured its business model around readership and circulation revenue, rather than advertising, almost two years ago. Even before the arrival of glossy stock, the paper had increased single-copy and subscription prices. Readers have responded favorably to the new paper, Adkins says, but they’re shouldering more of the production cost.

But back when the shift was made, Adkins also emphasized the appeal to advertisers, leading the San Francisco Business Times to write: “Without naming names, Adkins said that some advertisers who are now playing ball with the Chronicle wouldn’t before. They shunned newspaper ads because ‘they don’t deliver the brand image they require,’ he said — an obstacle the Chron’s new paper removes.”

“People are definitely and truly intrigued when they see copies of the Chronicle,” says Chuck Moozakis, editor of the print innovation monthly Newspapers & Technology. “The paper is trying to send a signal that you can have a newspaper that looks like this and not like that. But it’s a challenge now.”

Looking internationally

The Chronicle won’t be phasing out high-gloss paper any time soon — not with that $1 billion Hearst deal — but Adkins isn’t ready to champion glossy as the savior of the print industry. That’s partly because in most cases printing on high-gloss paper requires outsourcing — a costly and alienating move — to independent commercial presses like Transcontinental. Heat-set presses simply aren’t ubiquitous enough in the United States to make higher-grade printing a viable option for most newspapers.

As for Canada’s Globe and Mail, editor John Stackhouse told readers that he wasn’t looking to the American newspaper market for inspiration when it comes to his “Proudly Print” approach: “Rather than study the U.S. market which is fairly depressed in terms of newpaper innovation, we looked to quality papers in southern Europe, Latin America and parts of Asia and found a great array of ideas that encouraged us to pursue a bold and confident look as well as a design that would continue to support great, in-depth journalism…One of the principal goals of the redesign is to raise the quality of The Globe at a time when we feel many other media are reducing their quality.”

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