Corporate Killing of Diversity

Philip Bowring ponders the merger of the news bureaus of two regional publications

[This is a slightly expanded version of a Column which appeared in the South China Morning Post on Monday November 19, 2001. Philip Bowring writes a fortnightly column for the SCMP, Hongkong's main English-language daily, as well as being a Columnist for the International Herald Tribune. He has been based in Asia since 1973 and is a former editor of the Far Eastern Economic Review.]


It may not be a turn up a blind alley for the magazine, but it surely marked the end of an era for an institution born here and raised in Hongkong's freewheeling spirit. Ten days ago, Dow Jones & Co announced that Asian news bureaux of the Far Eastern Economic Review would be merged with those of the Asian Wall Street Journal. Many correspondents jobs would also go.

Readers will judge in time how a weekly can retain its identity when correspondents also have to write for a daily paper which they used to view as a competitor for good stories, as well as for the regional advertising dollar. But now is a good time to look back at the history of the Review, which was founded in Hongkong in 1946 and was to become a global pioneer in regional journalism.

It is also an occasion to consider some related issues in the wider media world. Firstly, the damaging impact on media diversity and hence of political pluralism of the acquisition by a few large multinational corporations of national and regional publications which were products of local entrepreneurship. Secondly, the impact on editorial quality, integrity and independence of publishing agenda either set on other continents or by advertising and marketing executives who are driven by short term returns and often have scant knowledge of the readerships their organs are supposed to serve.

I must declare an interest. I was involved with the Review for all but three of the 20 years from 1972 to 1992, including seven years as deputy editor and four as editor. I was sacked as a result of disagreements about the nature of the publication with the New York executive placed in charge of it, Karen House, wife of Dow Jones chief executive Peter R. Kann.

The Review was sui generis, a product of Hongkong's peculiar circumstances as commercial hub and centre of a free press in a turbulent post-independence, post-Chinese revolution Asia . It was set up by two central European Jews, Eric Halpern and Karel Weiss, who has survived the war in Shanghai and then moved to Hongkong. Its tiny seed capital was provided by the Kadoories, Jardines and the Hongkong Bank.

It limped along for years before Dick Wilson arrived as editor in 1958. Wilson, subsequently a prolific author of books on Asia and still to be found at conferences on Asian issues in London, developed its regional political coverage. In the mid-60s he was succeeded by Derek Davies, a pugnacious Welshman who was to delight readers and offend governments for more than 20 years.

When I joined as Business Editor in Hongkong in 1973, the circulation was still under 20,000 and no staff writers outside Hongkong. It relied on finding good contributors and a willingness to challenge received opinions - people like Simon Leys, whose analysis of the Cultural Revolution was almost uniquely accurate. Davies gave it a reputation which attracted imitators, The Asian and Asia Magazine, both long deceased.

It grew furiously in the 70s and 80s. Its first staff correspondents outside Hongkong were only appointed in 1973 - Susumu Awanohara, an brilliant US-educated Japanese, and Nayan Chanda, an Indian who later became editor. By 1992 it had 21 overseas staffers and a circulation of 74,000 - and had been higher till it lost its 10,000 sales in Singapore due to Lee Kuan Yew's inability to let his subjects to learn all the facts and hear diverse opinions.

Those who viewed the likes of Newsweek as the quintessence of weekly journalism considered the Review dull to look at and difficult to read. Those who liked individual products with "their own stink" like The Economist or Barrons, tended to be loyal to the Review's mix of worthy analysis and investigative journalism which riled governments and big business, and faint-hearted ad salespeople.

It always had a quirky hiring policy, preferring to spot individual and entrepreneurial journalistic talents than recruit clones from journalism schools and wire services. It eschewed formula writing and homogenized prose. It writers were allowed opinions but the magazine then seldom ran editorials and had no ideology to impose on a diverse region beyond a general belief in freedom of expression.

Currently prominent Hongkongers who made earlier marks at the Review include Emily Lau, as conscientious a journalist as she is confrontational in Legco, and Gary Coull, Credit Lyonnais Asia's high profile head who had the sense to see that he was smarter than most of the business figures he was writing about. Court of Final Appeal judge Andrew Li had a short spell there between legal studies, recruited by then deputy editor Leo Goodstadt, later to head the Central Policy Unit.

The magazine nurtured then unknown talents including the late David Bonavia, the best of his generation of writers on China, Ian Buruma, now a literary figure of some distinction. I could name a dozen or more other names who distinguished themselves in diverse fields as well as post-Review journalism. It also spawned its dissidents, notably T.J.S. George and the late Michael O'Neill who left to set up a rival, Asiaweek, now also swallowed up into a multinational maw, in this case the Time/Warner/AOL/CNN etc etc colossus of media mediocrity.

This may all sound nostalgia which has not much to do with either the present day demands of readers or the constraints of commerce. It is not. The Review flourished both commercially and intellectually when it was left to find its own way in the world. Asiaweek was probably never profitable as an independent entity but it made its mark, albeit erratically, by establishing an identification with the region it covered.

The SCMP had majority ownership of the Review from 1972 to 1987 but was interested in the printing contract and dividends, not the editorial content. In 1987 Dow Jones, a minority shareholder since 1973, acquired 100% consequent on the sale by HSBC of control of the SCMP to Rupert Murdoch's news Corp. Initially Dow Jones was supportive of the Review as it was and backed expansion of its bureaux.

But the arrival of Ms House on the scene in 1989 led to the build-up of pressure to model its content after US newsmagazines and its editorial stance along Dow Jones lines. In 1992 an editor was sent from New York and an editorial column reflecting the right wing and furiously pro-western sentiments of the Wall Street Journal editorial page instituted. One dogma would fit all conditions.

It would be hard to criticize if all this actually benefited the shareholders, even if it was not what the readers wanted. That seems unlikely. Though figures are not available, it seems unlikely to have shown much, if any, total return on Dow Jones investment in it over the past few years. To judge by the bureaux merger news Dow Jones seems to have made no more of a success of the Review than of Telerate, the financial news service which it bought a decade ago and later sold for a fraction of its multi-billion dollar cost.

Total circulation has risen by some 20,000 over the past decade, but almost all of that has been accounted for by the return to Singapore - at the cost of in-depth or frank coverage of the sensitive little republic - and by a surge of Bulk Sales in Hongkong. Indeed, the deterioration in the quality of sales of both the Review and Asiaweek has been very evident.

A decade ago, the vast majority of circulation was individual subscriptions at or near full price and, in the Review's case, enjoying a high rate of renewals. Now individual subscribers account for less than 50% of the total sales. Bulk sales, mostly at 5-20% of the cover price, are now 51% of total circulation and 75% of that in Hongkong. Over the 6 months to June, individual subscriptions fell by 5% and newsstand sales by 14% over the same period of 2000 while the hugely discounted bulk sales increased by 7,000.

These low grade sales can of course become self-defeating, especially if they are outside Hongkong and incur heavy distribution as well as printing costs while advertisers remain wary. Asiaweek seems to be learning that lesson. Its average total sales in the last six months fell by 16,000 to 111,000 as a result both of sharply lower bulk sales and over heavily discounted subscriptions. These have high mailing costs and generally low renewal rates so that if the increased circulation fails to generate more advertising revenue the net effect is to increase losses.

I would not suggest that the troubles of these weeklies all stem from poor editorial content, low regard for readers' intelligence, and content - for example endless articles on tech toys -- aimed more at advertisers than readers. Obviously, factors ranging from the economic downturn to the improved quality of national publications in regional markets to the success in Asia of Business Week and The Economist in grabbing a handy share of a slow growing market have all played a part in the problems of the two regional weeklies.

However, the merger of the Review and AWSJ and the size of the cutbacks suggest that Dow Jones at least believes that the current situation is more than a cyclical event. Meanwhile Asiaweek's latest of many re-makes indicates that it is following formulas which have already reduced its separate identity. Will it too, like other US media, now keep Bin Laden and other "enemies of America" from stating their case?

It always struck me as odd that Dow Jones and Time should both want two publications which necessarily would be competing against each other for revenue in the smallish English-language regional marketplace. Now it seems the home-grown publications are likely to be the victims of large corporations which once had more money than sense and believed that they had some magic American formula for success in publishing.

Now the lumbering giants face cost of follies elsewhere which threaten their ability to bear the costs of their mistakes in Asia. Hongkong and the region are the losers from this unsuccessful bit of globalization.

Diversity has been killed. Homogenization, whether of format or ideology, is not working.



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