By Gong Shuguang, Chairman of the Board, China South Publishing & Media Group
China South Publishing & Media Group (CNS) is one of the largest publishers in China and among the leading media companies in the world. One of its media properties is China Publishers Magazine, a trade magazine for Chinese book publishing and a long-time partner of Publishing Perspectives.
To mark the renewal of the partnership between China Publishers Magazine and PP, China South CEO Mr. Gong offered us a deeper look at his company and his plans for international expansion.
Contents of this article:
The Rapid Growth of China South Publishing & Media Group
China South Publishing & Media Group (CNS) has achieved rapid growth in the past ten years and is leading the transition in publishing from print to digital.
CNS is the top publisher in China in terms of profit, which has grown significantly since 2010. Profits reached 1.549 billion RMB ($237 million) in 2014, up from 0.806 billion RMB ($123 million) in 2010, with the average annual growth rate over 24%.
The number of titles we published per year increased from 7,357 in 2010 to 10,872 in 2014. From 2011 to 2014, our sales revenue increased from 5.857 billion RMB ($895 million) to 9.039 billion RMB ($1.38 billion) with the annual average growth rate of 15.5%.
In the retail market for trade books, CNS is the third largest domestic publishing group. Our market share rose from 1.75% in 2010 to 3.63% in 2014. The numbers of books on sale rose to 22,389 in 2014, up from 14,658 in 2010. CNS is also experiencing a rapid growth in the number of bestsellers. In 2010, we only had 14 bestsellers that made the list of Open Book Bestseller List, but in 2014, the number reached 31.
CNS has leading market share for books on pop science, literature, mind and spirit, classics, music, writing, management and business, and art collection. In 2014, according to the data released by Open Book, CNS’s market share for pop science books, writing books, novels and classic masterpieces ranked first, while the market shares in the segments of music books, art books and medicine and health books ranked second place among all the domestic publishing companies.
Focus on Education, at Home and Abroad
CNS is also an important publisher of national teaching materials. We have a company called Hunan New Teaching Material Company that specializes in promoting our educational products. Currently, CNS owns the proprietary intellectual property rights to standard experimental teaching materials for primary, middle and high school in nine subjects. These teaching materials are now being distributed in 28 provinces in China with the market share, sales revenue and profits ranking top among all the local publishing groups in China.
CNS is also making actively planning and developing its digital publishing business. We jointly established the Tianwen Digital Media Technology (Beijing) Company with Huawei. This joint venture has grown into the most comprehensive service provider for digital education in China in just five years. Currently, our products are available in 18 provinces, 80 areas and more than 1,000 schools in China.
Currently, CNS has built four digital platforms for digital education, news and information, service life, animation and entertainment. We strategies in place regarding digital distribution channels such as the internet, mobile and internet of things. Our preliminary digital distribution system includes a cloud platform, various channels and terminals.
3 Ways CNS Plans to Grow Their International Business
1. Make investments and build partnerships to transition from traditional publishing to digital publishing.
When all traditional publishers are confronting challenges brought by this transition from print to digital, CNS has to adapt to the big data era. We have to equip ourselves with an internet-based approach to develop a platform that can deliver various forms of media. We also need to find out what readers want using big data from our target consumers, and thus build a cultural ecosystem that encompasses every form of media using online technology and platforms.
CNS believes that there are two important combinations in the media business: 1) online and offline media, and 2) culture and finance.
For our online business, we focus on promoting our digital platforms in the fields of online education, news and information, online communities, animation and games. We are investing additional funds to develop an interactive entertainment platform and an e-commerce platform in order to build our business with online content.
The next step is to connect our off-line products and services (including books, newspapers, magazines, printing materials, distribution ends, logistics, local retailers, and exposition business) with our online platforms and to ultimately build a culture consumption ecosystem that offers all forms of media to our customers.
To fulfill this strategy, we have signed a cooperation agreement with Pearson Education in September 2015 and are jointly developing digital education solutions in China and worldwide. In 2016, I will continue to focus on the international business opportunities that will help both domestic and foreign companies with the transition from traditional publishing to digital publishing.
2. CNS is looking for international mergers and acquisitions opportunities in the field of traditional publishing and creative media.
CNS will invest in various opportunities worldwide, specifically ventures that offer valuable copyrights, good writers, quality media, excellent content, skilled creative teams and other publishing-related ventures. Our goal is to establish professional and sustainable businesses around the world via mergers and acquisitions. Using comprehensive market research, we will invest in and develop publishing projects related to culture, markets, brands, innovation and media.
3. Leverage our existing IP and copyrights to increase our global rights business.
In the past few years, the broader idea of intellectual property (IP) is gradually replacing that of copyright to become the key driver in the Chinese cultural industry. As a result, more and more Chinese media and cultural companies are competing to control and develop multi-layered, comprehensive intellectual properties (including rights for translation, adaptation, merchandising, etc.).
In 2015, the box-office sales for movies in China exceeded 40 billion RMB ($6.14 billion). The size of game markets (including online and mobile games) is nearly 150 billion RMB ($23 million). China is also seeing growth in animation, comics, online video and many other forms of online media. The consumption of cultural products is expanding at an astonishing speed, and IP is frequently the link between these forms of media. IP is playing a larger role and demand for owing quality IP is increasing.
In this context, CNS changed the corporate mission in 2015 to “Devotion to Creation, Dedication to Sharing.” With this mission, we aim to strengthen our ability to discover good stories and increase our awareness of the global rights business in order to better leverage our IP across all forms of media.
In the future, I am looking forward to cooperating with more international partners. Through our various media channels at CNS, we can bring more high-quality IP to China. With both parties’ effort and expertise in discovering and editing authors, curating content, and fostering content creation, we will successfully utilize and grow the value of the IP we own.
International and Domestic Partnerships
CNS closely cooperates with many international publishing giants. We also have influential product promotion companies as well as strong brand influence in China.
With respect of international cooperation, CNS have successively developed deep cooperation with major international publishing groups like German Schott Music Publishing Group, Kadokawa Group of Japan, McGraw-Hill Educational Publishing Group, Cengage Learning Publishing Group, and Pearson Education. Since 2006, one of CNS’s subcompany, Hunan Literature and Art Publishing House, has been collaborating with Schott Music Publishing Group to publish Eulenburg Scores+Audio in English, German and Chinese. In September 2015, CNS signed a strategic cooperation agreement with Pearson Education, enhancing the collaboration in textbooks and reference books for elementary education, digital education products and international education.
CNS owns 5 of the 100 leading publishing houses in China, along with the following businesses:
- China’s most profitable bookstore, Hunan Xinhua Bookstore
- China’s largest book and periodical printing company, Hunan Tianwen Xinhua Printing Company
- China’s largest newspaper for elderly people, Happy Maturity
- One of the top eight news websites in China, Rednet.Cn
- A leading digital education publishing company, Tianwen Digital Media Technology (Beijing) Company
- Strong publisher with many bestsellers, China South Booky Culture Media Company