Lengthy courting process for media companies that want to do business in China

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Chicago—B-to-b media companies eager to expand their business into China must be in it for the long haul or not at all, said panelists during a discussion Wednesday at American Business Media’s Top Management Meeting.

The panelists, who took part in ABM’s trip last month to China, agreed that while risks are rife in doing business there, it’s a market that business publishers cannot ignore.

“There are enormous opportunities in China, which has 1.3 billion people,” said Marion Minor, president-CEO of M2MEDIA360. “Income levels are rising, ad spending is up and [economic growth] is phenomenal.”

Minor added:  “The flip side is foreigners can’t own a media company in mainland China. … If the government isn’t overt, it’s always in the background, and as the [country’s economic clout increases] it’s an unknown what the government will do.”

Gary Fitzgerald, chairman-CEO of Meister Media Worldwide, which operates in agricultural markets and generates 30% to 40% of its business outside the U.S., said: “I’ve been impressed with the multimedia environment in China. Print isn’t that prevalent. Digital is gaining speed—you’ve got 400 million people with wireless devices, more people than the entire U.S. population. You have a lot of different options on how to approach the marketplace. A print magazine may not be the first way to go.”

The Chinese government demands 51% control of any print media deal, while trade shows and Web sites do not require U.S. companies to partner with state-owned agencies.

Canon Communications in 2005 launched via Hong Kong a Chinese version of Medical Device Manufacturer. “We’ve learned a lot in the first few years,” said Charles McCurdy, CEO of Canon and media holding company Apprise Media. “Expenses were higher than expected and revenue was less successful.”

He added: “The regulatory terrain is mainland China is very complicated. Launching from Hong Kong makes a lot of sense.”

The ABM will be soon release a white paper on how to enter the Chinese market.

—Matthew Schwartz

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