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Didier Guérin
President

Inside this issue:

Overall growth of 3.2% across the region Contraction of 8% in the US and 9.9% in Europe China to expand by 4.1% Japan continues to contract, India is flat Indonesia is the fastest growing market: +20% The news is good for Asia, but not so good for Europe and the US. The Asia Pacific region seems to have hit the bottom of the global economic downturn and is expected to head into a mild recovery in 2010. In the 11 largest countries in the region (excluding Japan), magazine advertising spending is expected to grow by 3.2% next year, reversing its first ever decline of 6.2% this year. Meantime, magazine markets in Europe and the US are expected to continue to contract by 9.9% and 8% respectively. In its recently released Worldwide Media and Marketing Forecasts, GroupM* sees China as the leader of growth in Asia with a 4.1% increase in magazine advertising spending. But it will be far from the engine room of regional growth it has been over the last eight years. Going back to positive territory are Hong Kong, Australia, South Korea, Indonesia and Thailand. For the third consecutive year, in 2010 US magazine advertising spending is expected to fall by 8% (after a 6% drop this year and -7.2% in 2008) to a total of $25.9 billion - approximately the level of advertising dollars in 2001. This situation is actually much better than the 21.2% decline for the first half of 2009, as just reported by Publishers Information Bureau (PIB) for US consumer magazines. In Europe, the 2009 annus horribilis is coming to an end. The four largest European markets should experience a reduced erosion of their magazine advertising spending next year, from France (-6.3% compared with -17% in 2009), to the UK (-9.5% compared with -17.2% in 2009), to Germany (-10% compared with -17.5% in 2009) and to Italy (-20% compared with -24.9% in 2009). * GroupM is the parent company of WPP Group media agencies including MAXUS, MediaCom, Mediaedge:cia and Mindshare. With worldwide billing in excess of US$60 billion, GroupM operates more than 42 offices in 81 countries. With a slightly bleaker picture, Publicis Group subsidiary, ZenithOptimedia, also published its "Advertising Expenditures Forecasts", which will be reviewed separately.

The magazine advertising business generally accentuates economic cycles: it thrives with economic growth but performs badly during recessions. This year represents the first time since World War II that the global economy is set to shrink and it has been a painful year for magazine publishers. Helped by near-zero interest rates and a large fiscal stimulus, it appears (as of mid July 2009), that several countries are showing signs of a recovery which should bring a better environment to sell advertising pages in 2010. The following reports present the forecast for the 12 largest countries based on GroupM's "This Year Next Year" (northern) Summer 2009 Forecasts. For the first time, we have included Vietnam in our annual review and deleted Malaysia. Click on the flags below to be transferred directly to the country of your choice. Japan -14.7% Hong Kong +5.1% China +4.1% Australia +2.0% South Korea +1.2% India 0% Taiwan -0.7% Indonesia +20.0% Thailand +2.7% New Zealand -6.7% Singapore +6.1% Vietnam +4.4%

Thailand and Indonesia will be the next Asian countries to launch a local edition of GRAZIA. After its successful launches in China last March, in Australia in July 2008 and in India in April 2008, Inspire Entertainment Company Limited will publish the Thai edition in September and plans to sell 180,000 copies with a cover price of Baht 90 (€1.90 or US$2.65). The Indonesian GRAZIA will appear in November. Both editions will be monthly.

After the launch of GQ in India in September 2008, a Chinese edition of the men's magazine will be published in October 2009. While the Indian edition is published by a wholly owned Condé Nast subsidiary, in China the monthly title will appear under a copyright cooperation agreement with the China News Service. The magazine will have a cover price of RMB20 (€2.00 or US$2.90) and is targeting circulation of 400,000 copies a month.

In China, two magazines launched a few years ago changed partners and were relaunched with a new team. Madame FIGARO, published since 1999 by Opus Media, was relaunched in February by Vision/Fung Choi Media. Previously launched by a subsidiary of Morningside Business Publishing, FORBES China is now published by Fosun Media Holdings. Both titles are monthly with a cover price of RMB20.

In Australia, Pacific Magazines will launch Prevention in October or in November under a licence agreement with Rodale. The healthy lifestyle magazine is targeting the over 40 women's market and it is expecting to sell 70,000 copies a month. With this 17th edition of Prevention, Pacific Magazines (already publisher of Men's Health and Women's Health) consolidates its domination of the health magazines segment down under.

In India, Harper's BAZAAR was launched last March by Living Media India, part of the India Today group. The magazine licensed from Hearst is published 10 times a year, with a cover price of 100 Rupees (€1.40 or US$2.00) and a circulation of 50,000 copies. Still in India, Media Transasia launched Casa Viva under licence from Mondadori in January. With a circulation of 50,000 copies, the interiors and design monthly magazine also retails for 100 Rupees.

In Korea, a local edition of FORTUNE was launched by newspaper publisher Hankook Ilbo last March. The magazine licensed from Time Inc carries a cover price of Won 15,000 (€8.45 or US$11.80) and is targeting a circulation of 29,000 copies. In Bangladesh, a local edition of CAMPAIGN was launched last March by Haymarket's new licensee: Unicom Media. Published in English, the monthly magazine sells for BDT99 (€1.05 or US$1.45) with a circulation of 10,000 copies. At the same time, Haymarket launched the Chinese on-line site of campaignchina.com.

Rodale's Women's Health was launched in China and the Philippines last April under licensing agreements with Titan Media and Summit Media. The Chinese edition is expected to reach a circulation of 458,000 copies a month with a RMB15 cover price (€1.50 or US$2.20), while the Philippines edition is looking to sell up to 20,000 copies at Pesos 125 per copy (€1.85 or US$2.60). Also in Australia, Yoga Journal is planned to be launched by niche publisher Odysseus Publishing. Under license from Active Interest Media, the magazine will be published bi-monthly with a print-run of 25,000 copies and a cover price of A$7.95 (€4.50 or US$6.35).

In India, FORBES was launched in May by Network18. The licensed magazine carries a cover price of 50 Rupees (€0.70 or US$1.00) with a circulation of 75,000 copies every other week. Still with Haymarket, the soccer title Inside United: The Official Manchester United Magazine was launched in China in October 2008 by Soccer Asia Interactive, with a RMB 15 cover price (€1.50 or US$2.20) and a circulation of 50,000 copies.

Expanding further in Asia, Haymarket has also licensed its high tech and gadget magazine Stuff in Vietnam and in India. The Indian version was launched by the UK publisher's wholly owned subsidiary in Mumbai in December 2008 and sells 40,000 copies per month. Stuff's Vietnamese edition was launched in March 2009 by Le Media JSC and sells 40,000 copies at a cover price of VND 29,000 (€1.15 or US$1.65).

Bucking the challenging global conditions, The Economist Group increased its revenue last year by about 18% to £313 million (€363 million or US$507 million) and its pre-tax profits by 26% to £56 million (€65 million or US$91 million). These impressive results (for the fiscal year ending March 31, 2009) were mostly driven by the performance of the weekly news magazine, whose global circulation grew by 6% to 1.39 million copies. Not a bad performance for an old media vehicle.

Meantime, profits at RCD1 Ltd - the Northern & Shell's holding controlled by Richard Desmond (pictured) – plunged 25% to £41.6 million (€48.2 million or US$67.4 million) on revenue of £484 million (€562 million or US$785 million). These results were mostly affected by the heavy losses of the US edition of OK! which were down to £20.6 million (€24 million or US$33.4 million) from the 2007 loss of £24.3 (€28.2 million or US$39.4 million). Maybe it does not look good on paper, but it certainly shows the incredible commitment of a media owner to establish his publication in the world's largest magazine market.

A personal tribute to George Green (pictured) who just retired as Chairman of Hearst Magazines International, by Didier Guérin, President and CEO of Media Convergence Asia Pacific. George Green has been responsible for more than 200 licensed or joint-venture editions of Hearst magazines in 55 countries, in 36 languages for distribution in more than 100 countries.

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China has 364,000 High Net Worth Individuals compared with 362,000 in the UK and 346,000 in France. Defined as people "having investable assets of US$1 million or more, excluding primary residence, collectibles, consumables and consumer durables", High Net Worth Individuals in China now represent the fourth largest group of their kind after the US, Japan and Germany. (Source: 2009 World Wealth Report by Capgemini - Merrill Lynch Wealth Management)

" Dazzle your readers, inform them, inspire them and grip their imagination. Connect to their hearts and their minds. Do it with conviction and with emotion. Convey the same values with a website, with a weekend, with an event or an experience which engages them. Love your readers (and your advertisers) and they will love you back. " Jonathan Newhouse Chairman, Condé Nast International London, May 6, 2009