1. 1 FIPP Conference 2002 – Seoul Korea FIPP 2002's theme: Magazine Media Welcomes the Digital Age: Making Technology Work for Magazines Session VI-A - 14:45-15:45 Thursday 18 April 2002 Challenges To the Future of Magazine Distribution in the Asia-Pacific region

2. 2 Chairman: Louis de Bourgoing, COO, Hachette Distribution Services, France Speakers: Yong-Kook Kim, President, International Publications Service (IPS), Korea Masahiro Oga, President & CEO, Shogakukan Inc, Japan Gordon Lang, Regional Manager, Deutsche Post Global Mail, Singapore Introduction to the session

3. 3 Branch of Lagardère Group 2001 Key Figures: Sales: 4.3 billion euros 13,000 p. 30 companies,19 countries: Europe (AMP, SGEL, Naville, Saarbach…), USA-Canada (Curtis, LMPI…), China (Hua Dao), Australia-Singapore (Newslink) 2 businesses: 50% Press Distribution the only multinational domestic & international press distribution group 50% Media Product Retailing in travel locations: 1,000 Relay in stations and 80 airports in high street: Virgin Megastore in continental Europe A press specialist: 66% of its turnover Hachette Distribution Services (HDS)

4. 4 missing market figures: NZ, Indonesia, Vietnam, South Af, Canada, South-Central America, Middle East… Asia Pacific Magazine Market Domestic Magazine market + Import market HDS estimates

5. 5 CHINA Domestic Magazine market + Import market HDS estimates (Korea: KMA) Asia Pacific Magazine Market

6. 6 1,000 Magazine Publishers Post officeNational Distributors (national and regional offices + field force) subscriptions by post offices (60%*) Local post offices Independant wholesalers (500/1,000) Retail (40%): Independant street newsstands: 10/20,000 Post office newsstands: 5/10,000 Kiosks chains: 4/5,000 Convenience stores and others: 2/4,000 The Chinese model *% in value (still large volume of titles subscribed by work-units)

7. 7 HUA DAO Company The best help to publishers for National Distribution of local titles in China Hua Dao in 2002: 50 titles 12 offices 60 people 300 client wholesalers HUA DAO a fully-owned subsidiary of HDS

8. 8 1,000 Magazine Publishers (2,463 magazines) Retail (65%): Bookstores (mainly small independents)12,000 Convenience Stores 2,000 Travel retail stores 420-450 (Seoul subway) (270) Street Kiosks* 1,000-1,500 data: Source KMA * Associated with bus-stops: only dailies and a few weeklies The Korean model Subscriptions (35%) 500 wholesalers

9. 9 1,000 Magazine Publishers * Publishers owned TOHAN*NIPPAN* Keitokusha, Takiyama,… Magazines & books distributors 5 main others Magazines & dailies distributors The Japanese model subscriptions 95% 5% Nikkei-BP… JR unions/ subsidiaries Retail stores: Travel retail 5,000 Bookstores 8,000 8,000 4,000 Convenience 20,000 14,000 4,500 8,500 own regional wholesale

10. 10  Single copy sales:  slower or negative growth, except China  less big sellers but more specialized titles  market shift from independent stores towards chains and travel points  Subscription:  growth for specialized titles  rising cost of postal services  Due to recent downturn in advertising markets, increase of the share from copy sales Market evolution

11. 11  To react against the increasing cost of distribution:  need for productivity gains: concentration of wholesalers, pay on scan (?), …  need to review processes in partnership with publishers  China, South Korea, Taiwan…: how to manage and structure hundreds of independent wholesalers and retailers ?  To professionalize the retail network:  sophisticated marketing and merchandising techniques  promotion of higher allocation of shelf space  retail marketing program Challenges to the future of Magazine Distribution in the Asia-Pacific region

12. 12  To consider new subscription techniques:  telemarketing (Korean experience: Mr. Kim’s presentation)  open-ended subscription  Japanese experience (Mr. Oga’s presentation)  To develop export/import of Asian titles:  subscription: new actors such as Deutsche Post (Mr. Lang’s presentation)  Single copy sales: to test distribution of more titles Challenges to the future of Magazine Distribution in the Asia-Pacific region