Striking out in Hong Kong
A journalist’s success story
Striking out in Hong Kong
By Leo A. Deocadiz
The consul general is speaking in the anniversary program of a door-to-door cargo company in Chater Garden, a park in Hong Kong’s Central district. She reiterates the consulate’s commitment to serve the Filipino community. And then she hits a newspaper, The SUN, which for months has been criticizing her performance. She alludes to it and implies it has been lying in its reports about the consulate. A hiss of protest is heard from the crowd in front of her and then rises to a jeer.
When I heard this story that same afternoon from a friend who had been in the crowd, I was not surprised. This was not the first time that Filipinos in Hong Kong defended the newspaper that has served them for 10 years, bringing them news, information, and entertainment twice a month—for free.
In places around the world where overseas Filipino workers (OFWs) are numerous, com-munity papers have served as a beacon in navigating the culture into which they have been transplanted. Like a glue, the newspapers bind them as a community and provide a marketplace for products and services.
To OFWs in Hong Kong, The SUN has been all this and more. It has offered college scholarships for their children, pursued com-munity projects in partnership with organizations such as the Musicians Union which raised money for its members’ insu-rance plan, developed a website that helped those who have left Hong Kong to keep in touch, advocated causes such as higher minimum wages for domestic helpers, and many more.
It was a long way from its beginnings 10 years ago. In December 1995, I launched The SUN with a four-page issue. At that time, when we gave out copies in Statue Square in Central, people looked at it with suspicion and turned their backs. We also distributed copies by camping out at churches on Sundays until the priests noted the commotion we were causing and drove us away. And since the only advertiser then was the Philippine National Bank, we became known as PNB’s newsletter.
It took months to convince readers that the paper was not only for free, it was also independent.
Endings, beginnings
The SUN’s story began when I was editor of HK Staff, a human resources magazine published by a British company, Euromoney. It was, like several small titles published by the company, a one-man editorial job—I filled up the pages with articles I wrote myself and solicited from an array of HR consultants eager to showcase their expertise.
During the two years that I was there, I overhauled HK Staff from a 16-page newsletter to a glossy monthly magazine of 48 pages that had a yearend issue of 100 pages. As HK Staff metamorphosed, its profitability soared. From barely breaking even, it grew to an operation that brought in a net income of HK$1 million a year.
So when the company renewed my two-year contract with no increase in pay, I quit.
By then, I had convinced myself that I could strike out on my own by publishing a community newspaper.
Hong Kong had a growing Filipino population and small companies were sprouting to serve this market. Its Filipino-oriented media consisted of four magazines led by a glossy that cost HK$15 a copy. As in any media market where the leader took most of the spoils, this magazine got majority of the ads and sold the biggest number of copies.
I had played around with the figures, and saw a chance for a newspaper to succeed. This was confirmed in a formal feasibility study which a friend, a lawyer in Hong Kong, asked me to do with a view to a partnership.
When it was time to decide, however, we disagreed on one fundamental point. In my feasibility study, I wanted a business model where copies would be given away for free, with advertising as the only source of revenue. When my prospective partner insisted on selling the copies, we agreed to part as friends.
From shoestring to success
Jobless, I had nothing to do but pursue the project. I sat by our dinner table one night and, using a 286 computer with a green monitor running an old version of the Adobe PageMaker program, I put together four pages of The SUN’s maiden issue.
When The SUN hit the streets of Hong Kong days later, it was hardly noticed by the owners of the leading magazine. I could not blame them. That The SUN started with four pages could only indicate that this was a harmless, shoestring operation. That copies of the paper were being given away for free may have also indicated to them that this new competitor made the blunder of sacrificing an important source of income. After all, the advertising market consisted of less than 10 banks providing remittance services and a few door-to-door cargo companies.
But in a high-wage place like Hong Kong, I found out that it would cost me as much, or even more, in administrative costs—distributing copies to outlets, keeping track of sales, collecting payments and warehousing unsold copies—as I would earn from circulation sales.
The other reason was: who would pay for a newspaper that had all of four pages?
Distributed free, The SUN could build an instant circulation, without being bothered by whether or not copies would be bought. In the first issue, I printed 10,000 copies. The market was silent. The next month, I printed 15,000 copies. Still, nothing. When circulation reached 20,000, however, the advertisers we were courting started to respond.
The newspaper’s attraction to readers was that, instead of discussing high school subjects such as “What is love?” which the leading magazine has been known for, The SUN was reporting events in the community, commenting on actual situations such as a local restaurant’s policy of using plastic utensils on Sundays when Filipinos made up most of its clientele, and so on. In other words, it was not “dumbed down” to suit its target readership of mostly domestic helpers—it respected its readers’ intelligence.
With people able to read a better paper for free, they stopped buying the leading magazine. Unable to sell copies, the magazine began losing advertisers. One year later, it closed down.
Creating a market
I was cheered by these developments, but I was running out of money. On several occasions, I had to borrow from my wife, Daisy Mandap, who was then working at the English TV Station ATV as a news editor, to pay the printing bills (Daisy joined The SUN as editor years later, further improving the quality of its coverage).
To raise more funds, I had to find jobs. I started another trade magazine, this time about quality management, in partnership with people I met when I was the HK Staff editor. When ATV had a shortage of people, I worked there too as a night editor on a part-time basis.
By its second year, however, The SUN was posting modest profits from being the market leader with a circulation of 30,000 copies. On the fourth year, we found a printer that could print 50,000 copies at the same cost. Its dominance was such that all the magazines that preceded it had folded up, and no newspaper could survive if it did not distribute its copies for free.
Perhaps because they saw The SUN as a good tool for marketing their products and services, local businesspeople woke up to the potential of the Filipino market. More businesses emerged to serve the community. For example, when we launched The SUN, we were working on at most 30 prospective advertisers. On its fourth year, however, The SUN had 130 individual advertisers.
The 1997 Asian economic crisis, followed by the outbreak of SARS (Severe Acute Respiratory Syndrome) in Hong Kong, was an especially revealing period. Mainstream companies noticed that, at the height of the economic crisis when the locals restrained their expenses in anticipation of a worsening situation, the Filipinos continued with their spending habits. Their long-distance phone expenses, for example, remained at about a quarter of their salaries. Thus, big companies such as PCCW and Hutchison joined the roster of advertisers targeting The SUN’s readers.
Philippine companies also saw the OFW market as an alternative source of revenues. The two dominant cell phone companies in the Philippines, for example, continued their rivalry in Hong Kong. As these incursions required ad support, The SUN invariably was a main player in their marketing plans.
Inevitably, success attracted competition.
One newspaper had the habit of comparing itself with The SUN, even claiming the same circulation but offering its ads at half the rate. To prevent our advertisers from being lured by such an offer, we came out with a “mid-month” issue with ads at half the price, but with half the circulation. Since then, The SUN has been coming out twice a month.
A group of Filipino journalists who were laid off from a mainstream English newspaper, The Standard, combined their separation pay and started another newspaper. After a few months, however, the money ran out and the group had a falling out.
Another newspaper offered advertising rates at half the price we charged. To win over our advertisers, it made a compelling offer: 80 percent off on ads if they advertised with it exclusively.
Invariably, these newcomers failed to dislodge The SUN from its leadership. The newspaper, after all, was working in a market that it developed.
Before becoming publisher of The SUN, Leo A. Deocadiz worked in the Phlippines as associate editor of the defunct Business Day and business editor of the Philippine Daily Inquirer.
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