China s Once-Popular Fashion Magazine Modern Weekly To Stop Publication

(Chinese Version)

Fashion magazines, which used to be regarded as the safe haven of print media, are also facing ups and downs in the past two years. In face of the rising challenge from new media, Chinese fashion magazines also find it harder to survive based on the declining ad revenue.

On September, 27th, Modern Media (00072.HK), the mother company of Modern Weekly, released its financial report of the first half of 2016. As of June, 30th, Modern Media lost 68.9 million RMB (around $10.32 million) in the first half of 2016. As a matter of fact, Modern Media’s revenue has been declining for several years consecutively. To be specific, Modern Media’s revenue in the first half of 2016 dropped by a staggering 27.2 per cent year-on year to 203.4 million RMB (around $30.4 million).

On the eve before Modern Media released its financial report, its stock price closed down 3 per cent to 1.25 HKD per share. In fact, Modern Media’s stock price has dropped by 34 per cent within the past year due to its protracted downturn in business. At present, its market valuation is merely around 548 million HKD.

Ad revenue from Modern Media’s print magazines has been declining for five consecutive years, and the company is left in the quagmire of declining ad revenue. Modern Media’s print media and art division’s revenue also dropped by a staggering 32.5 per cent year-on-year. To be more specific, ad revenue from its fifteen print magazines, including Modern Weekly and U+Weekly dropped by 20.2 per cent to merely 155.6 million RMB (around $23.2 million).

Modern Media’s declining ad revenue must have something to do with the fall of print media industry in general as well as the declining ad budget of luxury brands on print media.

However, Modern Media’s digital media business is no better. Revenue of the digital media and television division of its major mobile information platform iWeekly registered zero growth year-on-year. To divide the digital media and television division, an extra 5.1 million RMB was spent, which led to the overall decline of the division’s revenue.

As of the end of the first half of 2016, the number of registered users of iWeekly’s mobile and tablet app is 9.8 million and 3.6 million, an increase of 11.4 per cent and 9.1 per cent year-on-year, respectively. The performance of Modern Media’s another mobile platform iLady, however, looks spectacular. As of the first half of 2016, its revenue rose by 28.4 per cent year-on-year to 8.8 million RMB (around $1.3 million).

Modern Media pointed out that it was severely affected by the fall of print media industry as whole, and that its managing board was actively looking for ways to carry out reform and maintain competitiveness. Thus, the company won’t rule out the possibility to stop publication of print magazines with unsatisfactory performance, review its employee scale and re-organize its HR structure. As of the first half of 2016, the company had already cut 100 employees.

With the fall of print media industry, ad budget on Chinese print magazines dropped by 29.4 per cent year-on-year. According to Modern Media, the company would face huge challenge in the latter half of the year as China’s economy began to slow down the Chinese media industry was undergoing swift transformation.

Modern Media has always been transforming itself and expanding business to areas upstream and downstream. The company announced earlier that it would remodel its brand and expand its business to three areas: modern media, modern digital and model excellence.

By expanding business to model excellence, Modern Media aims to integrate its resources of marketing experts, models, celebrities and artists and hold trade exhibitions featuring design, innovation and art.

According to ladymax.cn, Shao Zhong, president and dominant shareholder of Modern Media, sold 17 pieces of art work, including oil painting, photos and sculptures with 29.121 million RMB (around $4.36 million) and added the money to the revenue of Modern Media’s print media and art division.

In face of the challenge of mobile internet and social media, traditional magazines have already lost their advantages in areas such as contents and distribution channels. In the past few years, Chinese traditional magazines began to fall and stop publication one after another. Recently, another two fashion magazines Bazaar and The Outlook Magazine also stopped publication. Near the end of last year, another two fashion and art magazines The Bund and Rayli also stopped publication.

However, traditional magazines have also been looking for ways to save themselves. After stopping publication, magazines such as Rayli, Cosmo Bride and No Art started to enter the new media battleground.

As time progresses, medium also changes. As traditional print magazine industry begins to fall, digital media industry begins to rise. At this point, the only way out for traditional media is to transform themselves. It is expected that a new order in the media industry is going to emerge in the near future.

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Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.