ReDegg

The Herring Came First, But China Has Just Hatched an Egg 
By Anna Sophie Loewenberg  


Inside Redegg's office in Beijing.

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The Invitation
Compared to what it takes to launch a magazine in the People’s Republic of China, launching a magazine in America is a lot like having a party. Freedom of the press is an invitation, and if you are lucky all you need is a few like-minded friends and an empty room in your parents’ house.

In May of 1993, when Anthony B. Perkins, Christopher J. Alden, and Zachary A. Herlick first launched Red Herring — America’s leading publication about the business of technology — they did it in the room above the garage in Alden’s parents’ house.

"This is what I needed to get started — some cheap labor, a computer and a free room. So we asked my parents if we could work out of the house, and they said no, so eventually, we just moved in," says Alden.

Inspired by Red Herring, ReDegg — China’s newest technology magazine — launched its first issue in February, its readership: urban white-collar Chinese who work for multi-nationals and major corporations and entrepreneurs in high-tech fields. Theirs is a business magazine for a new economy and a readership that represents an entirely new class of Chinese. So ReDegg looked to the American equivalent of their target readership and the Red Herring model.

"We want to be like the Rolling Stone of technology finance," Alden remembers telling a designer whom he bartered with to get Red Herring’s first logo, offering advertising in the magazine in exchange for the designer’s work. Hence, what was on the cover came out looking strikingly like Rolling Stone. "By November of 1993, after we had only published a couple of issues, we got a letter from Rolling Stone’s lawyers, asking us to cease and desist using that logo," says Alden. "So we knew that we had made it when we got that letter." The letter is now framed and hanging in Alden’s office.

At that time, Red Herring, at $13.50 on the newsstand, cost more per issue than it does today; its newsstand price is now $4.99. ReDegg goes for 5 Renminbi (RMB), which is less than $1 U.S.

"We didn’t raise any money, we didn’t spend money on advertising, we didn’t go out with expensive direct mail campaigns. We were cheap and had a really bad art director," remembers Alden, "and I can say that because I was the art director, and I have no sense of artistic design whatsoever."

Red Herring earned the $29,000 that it cost to print its first run by getting investment banks that were helping technology companies go public — a sector that had never really advertised in magazines before — to spend money up front advertising in the magazine.
Today, Red Herring boasts circulation of over 300,000. It has long since moved from Alden’s parents’ house; the publication now has bureaus in New York, San Francisco, London and Boston, with reporters in exotic countries: the People’s Republic of China, for example.

But Red Herring’s fairytale-like launch is less than emblematic of America’s magazine industry. Graydon Carter, the editor-in-chief of Vanity Fair, recently joked that to start a magazine you hire 20 people on staff, install 20 toilets and take stacks of 20 dollar bills and just throw them in the toilet every day. In today’s troubled economy, it is increasingly common to see the tragic downfall of magazines that can’t lure top advertisers.

More Than Just a Scent of Red Herring Across the Trail

"In the 1800s, wily British fugitives discovered that rubbing a red herring across their trail would divert the bloodhounds in hot pursuit," says Red Herring’s mission statement. "In the spirit of truth in reporting, the founders of this publication felt this to be an appropriate name for a magazine dedicated to providing a first look at the companies and trends that are shaping the business of technology."

ReDegg, backed by foreign investors, a business plan, and an experienced editorial and design staff, may be financially a step ahead of where Red Herring was when it started, but the trail it is navigating has more than a few bloodhounds to divert.

ReDegg boasts the backing of Beijing-based China Interactive Media Group, a publisher that has already successfully launched iLook — a fashion magazine — and that includes foreign investors like MIT Media Lab’s Nicholas Negroponte. But in China, Interactive Media needed more than money to start the magazine. Most importantly, it needed a publication license or kanhao, which Interactive Media bought from a defunct Shanghai-based magazine called Scientific Life. The right for private individuals to purchase publishing licenses is a relatively new phenomenon in China. ReDegg also inherited Scientific Life’s 34,000 subscribers. But ReDegg may have gotten more than it bargained for with its license.

ReDegg’s problems started with its cover. After getting an editorial and design staff to provide content, a foreign investor to put up money, and a Chinese investor to vouch for the content of the magazine, there was still the question of censorship by the Press and Publication Bureau.

Although ReDegg’s bold but plain red cover seemed duly patriotic, the size and placement of the magazine’s logo was enough to worry Chinese censorship authorities. The first thing the Press and Publication Bureau noticed was that the English ReDegg logo at the top of the cover was larger than the Chinese title of the magazine Ke Xue Shenghuo (or Scientific Life) at the bottom of the cover. The Bureau called for further investigation of the magazine, including a close look at the rest of its contents.

"Well, it is not too serious, but they demanded that we make the Chinese name at least as big as the English name, and then that opened a can of worms because they had a problem with some of our content," says Jeremy Goldkorn, a South African and the editor-in-chief of ReDegg, as he sits in his Beijing office beneath a cork-board full of photographs, a reggae calendar and a Chinese poster warning: Setting off firecrackers prohibited.

The ReDegg office is a lot like the Chinese magazine industry these days: newly built, shiny, tall and modern, and sitting adjacent to the uncharted territory of a dusty construction site.

"There is nothing quite like the space we’re in because it is technology, but it is not aimed at I.T. specialists," says Goldkorn. Foreigners aren’t officially supposed to hold positions such as editor-in-chief in China, but the publishing laws in the P.R.C. are still in the process of evolving from a state of antiquated totalitarianism, so innovative ventures such as ReDegg are pushed to take those kinds of risks.

Goldkorn is an ex-patriate who has been working in the magazine industry in Beijing for the past four years. Although he speaks fluent Chinese, he is not a native speaker. Still, Goldkorn was hired by Hong Huang, CEO of publisher China Interactive Media Group, to oversee ReDegg and make it different from the handful of specialized, information technology magazines already on the Chinese market.
"There still is not a lot of very good journalism [in China]. One of the problems is, people just haven’t really been exposed to it, and they don’t really know how to do interesting, investigative stories, that have a sort of angle on things," says Goldkorn, while smoking a cigarette in front of his turquoise-colored laptop.

Most of the editorial staff at ReDegg is Chinese, including a managing editor who helps Goldkorn with line-editing and the finer points in stories. The design staff, however, is largely foreign, including Jonathan Leijonhufvud, a 20-year-old Swede who designed the cover. His designs are minimalist and tasteful, while most Chinese publications clutter their pages. Still, it is ReDegg’s international media-savvy approach to the world of technology that the magazine is relying on to help it forge a unique niche in the Chinese market.

Since media has long been Communist Party territory, it is only in the past decade that private companies and individuals outside of the government have had access to magazine publication licenses in the P.R.C. Privately-run, specialty publications, however, have been increasing in the past five years. With state funding dwindling, private and foreign investors are moving in to fill the void, setting their sights on the glossy page and longing to see the eyes of China’s 1.2 billion consumers reflected back at them.

In China, the business of advertising, also a recent phenomenon closely related to the opening up of the market economy, is an unknown industry that is blossoming along with magazines. Foreign advertisements are increasing where they used to be sparse, and the designs and gimmicks Chinese companies use are smarter. Among the advertisers in the first issue of ReDegg are Epson, China Netcom, and Volkswagen. The going rate for a full-page ad in ReDegg is 48,000 RMB (or about $6,000 U.S.) with a one-year contract. In 1993, Red Herring charged $1,950 for a full-page ad with a one year contract, a figure which has now jumped to around $38,000. In the P.R.C., however, the figures related to advertising and distribution are less than a straightforward matter.

"There is no independent circulation auditing in this country, so everybody lies through their teeth about their circulation to the advertisers," says Goldkorn. "Basically, any magazine in China that tells you a circulation figure, you half it and you have something that might be the real thing, but you probably have much less than that."

ReDegg’s official circulation figure for the first run was 70,000 copies, which is what it tells advertisers, but according to Goldkorn’s formula, the real figure is more like 30,000 copies.

"There are also very few accurate marketing statistics of who is reading the different magazines. So, everybody is operating a little bit by guess work," says Goldkorn. But with its subscriber base, ReDegg can estimate how many copies were either distributed by the post office or by middlemen.

"Chinese people read a lot. They buy books and magazines, and they are hungry for new stuff to read, so there is the capitalist motivation, and there is a big potential market, which is still in the early stages, so there are a lot of gaps to fill," says Goldkorn.

The P.R.C.’s budding magazine industry — a market that, historically, has been handicapped by tight government censorship, lack of design skills and equipment, and lack of demand for advertising — is now a bustling competition of flashy covers on the streets of Beijing, Guangzhou, Shanghai, Chengdu and Dalian, where ReDegg is distributed. Where there used to be a sparse collection of poorly designed, government-run publications sold on the sidewalk, there are now daring magazine covers competing for a prime position on sparkling new government-built newsstands. Trendy magazines include the monthly rock’n’roll review Modern Sky — which is creating Chinese rock stars by putting up-and-coming musicians on the cover and distributing a CD with every issue — and Frends (sic), a chic women’s magazine which, in one issue, included a fashion spread featuring a six-foot tall female model hovering over Chinese avant-garde artists in their studios. Chinese mainlanders have not seen publications with this much flavor and creative license for several generations. In effect, the whole concept of what is news is changing in China. In the 1970s, during the last years of the Cultural Revolution, China’s leading newspapers, such as the People’s Daily, reserved the front page headlines for words of wisdom by Chairman Mao. Today, although this new wave of special interest magazines is far from touching on anything political, their motivation is a newsy one: get the reader by getting a good story.

The first issue of ReDegg is 96 pages and includes articles such as "Why Do We Play Videogames?" which is about Playstation II, a game system that people are crazy about in China and features a sexy picture of the machine-gun wielding, videoland heroine Lara Croft. Another article introduces new gadgets like the Pocket PC and the Photomax MP3 camera by Polaroid, and a feature story explains the recent conflict regarding Napster for an audience who lives in a country where piracy remains largely acceptable.

As for the business venture content, much of it had to be dumped along with the original ReDegg logo.

ReDegg’s first feature story was to be about the Zhongguo Pengyeban — a Chinese version of Nasdaq, or a stock exchange for small companies — which is not yet up but is expected in the next few years. Because the Chinese Nasdaq would be a perfect venue for high-tech companies, ReDegg planned a comprehensive feature story predicting its arrival and explaining the application procedures, what kind of companies will be eligible, and the effects it will have on China’s technology companies.

According to Goldkorn, it was largely because the Chinese Press and Publication Bureau was first concerned about ReDegg’s cover that they scrutinized the Chinese Nasdaq article. Officially, the Bureau argued that because ReDegg’s license is for kepu or topics relating to popular science, not sheke, or social science, they weren’t authorized to run the story.

"They may have just not bothered about that if for some reason they hadn’t decided that they didn’t like the cover. But once they decided we were kind of dodgy, they did an investigation," says Goldkorn.

Like most Chinese publications, ReDegg has an internal self-censorship system where all of the content is carefully looked over by the magazine’s Chinese partners before going to press. "It’s not George Orwell-style totalitarianism. Generally, you don’t have a government censor from the Press and Publication Bureau who comes and censors you," explains Goldkorn. He regularly e-mails and faxes Li Qiao, ReDegg’s Chinese partner and official editor-in-chief, with the content of the magazine, purely so that she can rid it of any material that might be offensive to the Bureau.

As for the question of whether ReDegg’s content should be about popular science or social science, Goldkorn isn’t concerned. "Personally, I am not going to pay any attention to it. I’m not prepared to do the job if I have to worry about that all of the time," he says, arguing that the magazine will just have to buy a different kind of license if it becomes a regular problem.

Still, ReDegg has refined its slogan: "Technology and Culture." Goldkorn is now re-thinking the magazine’s mission. "It may start to look a lot more like Wired," he says. Also an American, West Coast-based, technology magazine, Wired came out in 1993, just a few months before Red Herring.

For the upcoming issues, Goldkorn plans to include some stories on business, but also on topics such as digital artists who work with computers, how to set-up your own movie studio and a section all about new technological gadgets.

"I think that the time it takes for new technology to be adopted here is faster than it has ever been. If you compare the number of personal computers and Palm Pilots and cellphones to [Chinese] incomes, it is completely out of whack with the United States. [Chinese] people whose salary is 3,000 RMB — less than $400 U.S. — per month will spend double that on a personal computer," says Goldkorn.

Likewise, he is hoping that they will spend the 5 RMB per month — less than $1 U.S.— it takes to buy a copy of the hip, glossy paged, monthly tech magazine ReDegg.

With the help of models (like Red Herring’s) that have proven themselves in the American market, Goldkorn and the ReDegg team want their magazine to contribute to changing ideas about innovation in the P.R.C. "Although the rate of adoption is really fast, there is not very much innovation here," says Goldkorn. "So cutting edge devices can take a while to filter down, and the stuff that is easily available tends to be stuff that is proven in other markets. This is a big problem with everything in China. That is one of the things we really want to look at with ReDegg, as a sort of long-running theme. What is up with this country, where there are so many skilled technology people, but there is so little innovation?"