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Exploring different trajectories of the newspaper industry through an examination of the Hong Kong case.

Colin Sparks Zhou Shou

School of Communication, Hong Kong Baptist University

The crisis of the newspaper industry in the developed world is well known. Circulation is in decline and more recently advertising revenue has fallen. The USA is the best known example among rich countries. Readership amongst US adults fell by ten percentage points between 1998 and 2007 and advertising revenue fell by 25 per cent between 2008 and 2009 alone, partly due to the cyclical effects of economic crisis. This picture is not a uniform one across the world. In many countries, newspaper circulation is rising and advertising revenues are buoyant. India and China are the best known examples of countries in which newspapers are booming. There are a number of well-known explanations for these differences. Some, like rising literacy, urbanization and increasing disposable income are obvious explanations for increasing readership. The facts that the advertising market is undeveloped and internet penetration remains low in these countries mean that newspapers continue to enjoy the monopoly position in sections of the advertising market that they have forfeited in the developed world. According to this explanation, as the societies in question “develop,” newspapers will start to demonstrate the same profile as in the USA. This paper questions these explanations through an examination of the Hong Kong newspaper market. Hong Kong is an interesting case since it is most certainly part of the “East” but, unlike the PRC mainland, it is not a “developing” society: it is one of the most urban, and richest, societies in the world and it enjoys high literacy rates. It has relatively high internet penetration and high usage of other ICTS. It has a well-developed advertising industry: indeed it has the highest per-capita advertising expenditure in the world. The Hong Kong newspaper industry, however, does not demonstrate the same signs of severe crisis as other countries that are comparable in terms of living standards, advertising saturation and ICT penetration. The number of titles is growing, circulation (including free newspapers) is stable or slowly increasing, and advertising revenue continues to expand, albeit not as rapidly as in the past. The paper examines possible reasons for these realities via a study of the business and editorial strategies of the main newspapers in Hong Kong as revealed by interviews with journalistic, advertising and circulation staff. Three possible interpretations of the situation are explored: that this is simply a delayed reaction to changing conditions and in time the situation will come to resemble that in the developed world; that Hong Kong newspapers have managed to adapt to the changing market conditions better than those elsewhere and thus are surviving better both editorially and economically; as with online gaming, there are distinctive features of ICT usage in East Asia that mean that the trajectory of newspaper will remain different to that in the developed world.