Blockbuster First Issue and Chinese Partner Run Afoul of Authorities, Rivals

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BEIJING (AdAge.com) -- Rolling Stone has run right into the most difficult aspect of doing business in China with its first issue here, the government. Although the debut Chinese edition was a hit with readers, selling out just days after it appeared on local newsstands earlier this month, press and publishing authorities are looking into whether proper protocol was followed in establishing the title.

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One of One Media's problems stems from making the English name of the magazine far larger than the Chinese name, a no-no in a Communist country still coming to terms with the influence of foreigners in its domestic affairs, particularly in its mass media.

Local press reports suggesting the monthly has been banned are “completely untrue,” according to an executive at One Media Group, the Hong Kong-based lifestyle-magazine publisher producing Rolling Stone in cooperation with Wenner Media in the U.S. “The government hasn’t officially told us anything yet, but we are very confident that a second issue will be published soon,” said the executive, who could not be identified because of the sensitivity of the situation.

However, the government’s press and publishing authority in Shanghai, where the license under which Rolling Stone is published is located, has raised red flags about the legality of the license that will have to be ironed out before future issues can appear.

Closely watched
The situation is being closely watched by U.S. publishers, which have all dabbled with establishing China editions of their titles. Hearst Magazines President Cathleen Black said at this year’s American Association of Advertising Agencies Media Conference that her most wished-for asset was the ability to fully control a Chinese edition outright, rather than having to do it through a local partner. Like all foreign titles, the Rolling Stone Chinese edition is published through a license belonging to a local magazine, in this case a magazine that is no longer published called Audio Visual World.

A Wenner executive in the U.S. answered inquiries by referring to a statement from One Media Group, which said it remains the exclusive content licensee of Rolling Stone. “The Group will continue to work with its partners in mainland China to ensure adherence to compliance measures within China while maintaining its dedication to all interested parties,” it said. “One Media Group is firmly committed to its broad readership, loyal advertisers and its strategic partners.”

One executive familiar with the publishing landscape in China said One Media didn’t get all the necessary requirements met before publication. “Rolling Stone should have purchased this local title to be repackaged for a Chinese Rolling Stone,” said an executive at MindShare in Beijing. “The whole purchase and repackage procedure didn’t get agreement from the government, and [it] didn’t allow them to use Rolling Stone as the magazine name, which is very sensitive.”

Design issues
The authorities are investigating other ways One Media and its local partner may not have complied fully with China’s regulations. In particular, according to publishers of other foreign titles in China, the English name of the magazine is far larger than the Chinese name, a no-no in a Communist country still coming to terms with the influence of foreigners in its domestic affairs, particularly in its mass media.

In fact, all foreign titles in China operate in a “gray area,” said Jeremy Goldkorn, co-director of Standards Group, an independent ad agency in Beijing and a veteran of China’s publishing industry. “It’s technically illegal for them to be published here at all. They go through a local company and use their license, which usually has some degree of involvement in the content. In this case, (the local license holder) has almost no involvement.”

Vogue, for example, publishes a local edition in China through the same mechanism, but without raising the eyebrows of publishing officials. Why is Rolling Stone facing the possibility of being banned in China? Partly it’s a content issue; fashion titles cover less sensitive topics than a rebellious title like Rolling Stone, whose first issue touched on some taboo topics like a female Chinese blogger with a vivid sex life.

Shanghai sensitivity
“There was nothing in there you couldn’t publish in China in another context, but packaging it all together under a Rolling Stone logo that was too large annoyed the press and publication authority in Shanghai,” Mr. Goldkorn said. Ironically, the Shanghai authority is more sensitive than its counterpart office here, China’s capital. “If the magazine were based in Beijing, Rolling Stone's launch may not have caused such a problem,” he added.

Also, Vogue executives in China “spent more time nailing down contracts so when it came out, all the issues were ironed out." Rolling Stone didn’t do that, partly because the editor was only hired two months ago.

In addition to aggravating local press officials by moving too quickly and not kowtowing to their authority, Rolling Stone's successful debut frightened existing lifestyle and music titles in China. Industry insiders say the rivals “ganged up” and informed the authorities about One Media’s alleged infractions and found a sympathetic ear.

Rolling Stone will likely survive the ordeal. “They’ll just have to do a lot of groveling, and once the authorities start looking at them, they’ll maintain a close watch. Rolling Stone will lose a lot of ground now as it’s starting out, so this market will be tough for them,” said Mr. Goldkorn.

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