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China publishers look to marketing

0 Comment(s)Print E-mail CNTV, November 8, 2011
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China's press and publishing industry is at the top of sweeping reforms to the country's cultural industry - as announced by the CPC central committee earlier this week. For decades, publishers of books, magazines, newspapers, and recorded media have been supported by varying levels of public finance. After the restructuring, commercial publishers will be solely responsible for balancing their books... keeping their own profits... and absorbing their own losses. Reporter Wang Yizhi went to meet one publisher, who says new marketing strategies are the key to survival, in the new publishing jungle.

The new book catalogues have arrived.

Tang Xiaoming has been working in this publishing house for 4 decades. She started off as a saleswoman and is now the head of the entire sales department.

During that time, Xiaoming says the biggest change has been in the way books are marketed and sold.

Tang Xiaoming, sales director from China Machine Press, said: "My work was much easier before. In the planned economy period, we sent out books and collected money back. But now, just putting books on shelves does not guarantee making money. There is great demand, but the readers don't always know what to buy. So I've sent out people promoting books to schools and libraries. The success of a publisher depends on marketing nowadays."

Reporter: "The production value of China's press and publishing industry exceeded 1000 billion yuan in 2010, the biggest throughout the world in the passed decade. Such a dynamic industry requires a flexible system. A market oriented press can be a solution that brings along challenges, as well as opportunities."

This is exactly what the president of the publishing house is expecting to see happen.

Wang Wenbin leads China Machine Press which has been a public institution for 50 years. But by the end of this year, it will be restructured into a completely independent enterprise.

It will receive no public financial support and will have to be responsible for its own operating profit and loss.

As it transforms into a limited corporation, the publisher will become responsible for paying social security for around 500 hundred employees and pensions for 600 retired -- all previously footed by national revenues.

It's a large burden for this future company -- but Wang hopes it will eventually benefit both employee and employer.

Wang Wenbin, president of China Machine Press, said: "We will face the mechanism of survival of the fittest. In the past we could count on the government's bail-out if we failed.... but now our only goal is to survive and thrive. This has boosted our motivation. In the meantime, the employees are willing to contribute if the company is expanding and profitable. Their salaries will be profit-related."

Publishers like these are just one example of a massive restructuring campaign undertaken since 2008. By the end of 2010, around 600 hundred public presses had been reformed into enterprises.

Some experts say the publishing industry in China has now entered a post-reformation period. Publishers will have to chase profits harder, in the face of increased competition and the growing impact of digital media.

They'll have to develop their own identity and their own ways of operating.

Wang Wenbin said: "We found that the most profitable presses all sell a large amount of textbooks. So we’ve started expanding into this market since 2002. Now 70% of our profits come from textbook sales. As a result, we've increased earnings from 100 to 1000 million yuan in the past 10 years. The open shelf books now have little profit to develop."

Experts believe that after this latest round of reforms, the publishing industry is likely to face a period of change and upheaval, as companies struggle to survive -- especially the smaller press houses.

Without the support of public finance and a clear development strategy, in the brave new world of survival of the fittest -- those who fail to keep their heads above water will face mergers, bankruptcy and possible extinction.

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