BtoB

Why international? Why now?

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American publishers are often less international than their European counterparts because the U.S. market is so vast. It's no surprise that expansion in your home market looks more attractive than contending with foreign languages, laws, currencies and customs.

For some, however, international expansion has plenty of allure. They see a move into new markets where there may be fewer and weaker competitors; where some of the largest advertisers are U.S. multinationals with which their existing domestic advertising and circulation relationships can be expanded; where readers may pay handsomely for their content; where the growth trends in their industrial sector may be stronger and possibly counter-cyclical to the U.S.

The question goes beyond "build versus buy" overseas. Ask yourself, "Can you license your magazine (the brand, the articles, databases, trade events) to a foreign publisher? Can you simply export, i.e., sell the U.S. version overseas as is?" An American b-to-b publisher may be able to take content that is distributed as controlled circulation in the U.S. and sell it as paid circulation in Europe.

What's more, the option to license or export has seldom been better. First, the dollar is relatively weak against foreign currencies. Second, copyright and trademark protection, particularly in Asia, have strengthened considerably. The likelihood that your licensee or a content pirate will highjack your intellectual property is less of a threat than a decade ago.

Why is the weak dollar good news? Well, it's bad news if you are buying a magazine property or taking losses overseas. But if you're selling outside the U.S., your overseas revenue and profits can be increased by as much as 25% versus two years ago (more if you are selling in euros or Australian dollars). To a foreign buyer using relatively inflated local currency, your dollar-priced intellectual property or goods look cheap.

Are you curious about going global? American Business Media is an excellent source of information. ABM's International Committee is well worth joining and its white papers-guidelines for China, India and Japan-are available for download at www.americanbusinessmedia.com/resources/white_papers.cfm. Another source is BPA Worldwide, which has recently opened a successful China initiative. There is also a new guide from the International Federation of the Periodical Press (FIPP) called "The International Magazine Publishing Handbook." The FIPP meeting in New York in May 2005 isn't a bad place to start, either.

Other sources of expertise include U.S. law firms, banks, and accounting and consulting firms. They will provide basic information such as country market data, cultural dos and don'ts, and even lists of prospective licensees or partners. The U.S. Department of Commerce is there to help you at no charge. They will coach you on all aspects of getting started abroad. In many markets, they will help you book key meetings through the local U.S. embassy (start with their Web site: www.commerce.gov).

Finally, the answer to "Why now?" is Asia. GNP growth in most Asian countries is double the rate of the U.S. and Europe. India and China, each with populations of more than 1 billion, have double-digit growth in numerous industrial sectors. A good example is automotive sector growth in China, which is compounding annually at more than 50%. Steel, aerospace, construction and the computer sectors are exploding as well. That's not all. Japan, Malaysia, Singapore, South Korea and Thailand are returning to exceptional growth, and the Philippines will be a vital, high-growth market in five years. American intellectual property and business practices are sought after in these markets. For most of us, there's more opportunity in Asia than at home.

Because international business is a "know-how" game, the Chinese maxim is apt: "A journey of a thousand miles begins with a single step." Start the process of building know-how by investigating specific country markets with some Web research, engaging in conversations with international clients and possible publishing partners overseas, and traveling to meet prospects in their market. It takes time to acclimate to different cultures and business practices. Embarking in 2005 will give you a shot at building something before your competitors. M

Hugh Roome is president of Scholastic International. He can be reached at hroome@scholastic.com.

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