Almost exactly one year ago we gathered here for the funeral for SmartBeijing. I certainly didn’t think only a year later it would be City Weekend’s turn. But that’s exactly what’s implied by this post which went around Monday. I started working for City Weekend Beijing in July 2006 and ran the entire editorial operation until October 2014 so this hits close to home. But this isn’t about rehashing the good times – you can go here for a bit of that – rather about trying to figure out what – if any – business model there is for expat media in China.

Monday’s post – published on the website and pushed on their official Wechat account – began with this strange line,

“Today it is with great optimism that Ringier China announces that the November issue of City Weekend Beijing and Parents & Kids Beijing will be Ringier’s last.”

It goes on to mention ongoing negotiations to sell the operation to another party.

To understand why this is such a strange way to begin a farewell, you have to understand a bit of the revenue model for these magazines. Ad contracts at magazines like this are almost always structured by blocks of issues – full page, back cover, for 25 issues (the entire year) for a fixed price, or some variation of that. Sales people feast on contracts like these and their main job year after year was renewing these whales, some of which were either partially or wholly pre-paid. Cashing out in November rather than December will leave some ad contracts unfulfilled. No doubt the contracts contain T&Cs which cover this scenario, but it leaves Ringier – the parent company – in the unenviable position of refunding money, getting hit with lawsuits, and/or generating ill will. That was always an unavoidable consequence of shutting down, but doing so after the December issue when pretty much all your ad contracts expire would minimize the exposure. There’s clearly something else going on.

Sources tell me that negotiations with two potential suitors have already collapsed, leaving one left and that people inside the company are “crossing their fingers” that this one works out. Clearly Ringier doesn’t want to carry the cost on its books for 2017, but I can only assume that by announcing its willingness to rubbish the entire operation – which still has valuable assets (brand, followers, domain authority, systems, client database etc) – it is trying to force the hand of the other party. The market is clearly savvy enough to see that the longer operation limps along the lower its valuation. Wait long enough and you’ll get a real bargain, the logic goes. So it’s a game of chicken. Nothing optimistic about that.

Is there reason to be optimistic about the expat media market in Beijing or anywhere in China for that matter? I think so. Even if there is only a core population of 20,000 American/Commonwealth/EU full-time residents in Beijng, that’s more than enough to sustain local media. When City Weekend hit the scene in 1997, it joined That’s Beijing, Beijing Talk, and Beijing Scene and served a readership a magnitude smaller. Hell when the North China Daily News was founded in 1850 there were only a few hundred foreigners around to read it.

But times were different. Digital starting eating print’s lunch in earnest in about 2009. We at City Weekend actually very astutely positioned ourselves to ride the digital wave launching the first version of the 2.0 website in late 2006. This was the prototype for the “+Your Event” “+Your Listing” tabs you can find on all the sites now. We used the website to power the magazine and the site was powered by you. Until even 2013 things were quite okay as print revenue drops were offset by the growth of banner ad revenue.

But then the perfect storm blew up.

First of all, the way those banner ads were priced was just stupid. Clients weren’t paying cost per click, they weren’t even paying cost per mille, instead they were paying cost per duration of time on the site. That’s laughable. Not even premium volume ad publishers dare to do that. But back then clients didn’t know much about digital, just that it was “the way to go.” Then just as buyers got more performance oriented, CPM and CPC models collapsed, mainly because of mobile. Mobile ads are tiny, half of the clicks are accidental and those that aren’t rarely provide compelling lead acquisition journeys. Just like that, the beefy, well-designed, high-concept websites became obsolete and everything meaningful was shrunk down to the size of an iPhone screen. But at least in return we had social media.

Expat rags were quick to jump on social media, Weibo for a little while and then Wechat. These channels developed rapidly and became the perfect vehicles for content marketing which had been the holy grail of advertisers all along. But this further eroded margins and credibility. To shore things up the mags looked to diversify the revenue stream even further with stuff like partnerships with ticket sellers or restaurant booking services, for example, or creating their own video production teams. But it all dips dangerously into the territory of performance marketing – a nightmare for the mags.

Even though TimeOut and That’s and Beijinger still lumber along under the old regime, they will also face an inflection point – probably very soon – which will force them to pivot or cut bait. In theory, CW’s exit should release ad dollars into the market. In reality, advertisers will simply reduce budgets. Meanwhile City Weekend will lick its wounds and try to re-consolidate in Shanghai which will be the last refuge of the old model where an editorial team makes content, a sales force sells the volume and a capitalist at the top collects profits. The corporate model of local media in China is on its last legs.

I’d be surprised, though, if the players in Shanghai died of their own accord without being disrupted by a nimbler operation. A new model doesn’t seem that far off to me. The pieces are already there. It will naturally start with Wechat and will probably be spread over a few affiliated channels – food, events, family, entertainment and tech. This will have to happen within the embrace of performance marketing. None of the magazines have done any Wechat segmentation and none have succeeded with any kind of core loyalty program. That’s where we can meet – and exceed – expected ROI.

But we will still have to monetise on reach, plain and simple. That’s where entertainment comes in. Look at Shameless – at their height doing 50,000RMB/month in ad business before seizing up on a government official’s bad haircut. That’s Shanghai’s attempt to re-invent a better version of Shanghaiist is understandable, but it’s not going to get us the 100,000+ article reads we need at a scale of production we can afford.

Beyond that there is the question of video. Frankly I’m not sold on video. It’s difficult to get it to go viral and the organic engagement numbers I see within Wechat are not particularly encouraging. As a vector of content marketing? Forget it – clients expect Hollywood-level production values and the reach to match. Won’t ever happen in the expat market. Bring in video on an ad hoc basis – when you have a great idea or the perfect client – there are plenty of talented one-man-band freelancers out there, and get into livestreaming instead.

I’m not tossing out the web, it’ll still be relevant as long as people still use search engines, but it’s not where we start (aside from a simple branding page or two). After we make a stable business with the Wechat array, then we invest in web, fighting for long tail keyword strings, like Skimbl used to do. We use that traffic for new channels of Wechat adoption and more (free) eyeballs for the content marketing.

The linchpin here is a competent marketing department. I spin up my initial (small) sales team (of 1 person) – which is mainly focused on fielding requests from advertisers and looking after accounts receivable – into a proper O2O event marketing team. Put asses into seats – that’s what we’ll do and those are the types of clients we will bank on, not high rolling dakuan who just want to see themselves rendered gloriously in print. Those guys still exist but they are ploughing money into KOLs now. Offline events are key to making the whole thing work. The CMO has to be top notch in terms of event planning, partnership engineering and execution. Kills me to say it, but he or she is top dawg in my new org chart.

What about print? Does it ever come back? Sure, why not. But only after social, events and web are in place. Think of it as hybrid O2O. To do print right you need great photos, decent design, reliable distribution and the balls to bluff your distribution numbers. Print is part of the plan, but in the form of annual or semi-annual publications and then for sure the production is outsourced. Did I mention we will only accept full-page ads?

Let’s circle back to content marketing – a term that worries a lot of readers out there. Within media writ large and small there’s been a steady erosion of trust over where the lines are drawn. JFK Miller just came out with a memoir detailing his censorship scraps with Chinese authorities during his time at the helm of That’s Shanghai. It’s well-written, and of more than passing interest to me as someone who has his own censorship stories to tell, but it overlooks client side censorship which was more colorful, more dramatic and far more rampant.

Some point to SmartShanghai as an example of how to cut out the evil of content marketing. These guys, I am convinced, are actually less likely to cover you if you give them money, unless you are a DJ and you give them money in which case your odds are probably 50-50. They did a laudable job of building a content model in lockstep with a target demographic. But it’s still monetised on an unsustainable formula of cost per god-knows-what. It’s already failed in Beijing and as I said Shanghai is the last refuge of this kind of frothiness. Sooner or later it will catch up to them too.

So how are we going to do this, my friends? How are we going to come to terms with the fact that our editorial and sales are in bed together? To be honest, having been on the production side for many years, it’s less of a problem than people make it out to be, except in those restaurant and bar awards things which is a story for another day. Poorly disguised hackwork churned out by disinterested editors definitely happens, but 99% of what gets written is the editor following his or her nose and doing the best he or she can.

Brand positioning solves this problem for us. Media that is seen as genuinely community will not only be forgiven it its commercial aspects, but will be celebrated for them as hallmarks of success. TimeOut, That’s, City Weekend all smack of the corporate, because they are corporate. Perhaps the most disturbing part of Miller’s book is the portrayal of “Li” – clearly a pseudonym for That’s CEO Leo Zhou – who is the real boss of the whole operation. He comes across as a cynical self-absorbed asshole laoban who’s only in it for the money. I don’t know if it’s true or not, but I certainly didn’t see our Ringier overlords as being too concerned with carrying out a public service – a perception this most recent turn of events will do little to change.

The new model is all about sustainability. Editors, sales, marketing people will all be shareholders, not because these shares are to be cashed out someday, rather just to keep them out of the hands of a single person. When people leave – and the turnover on the editorial side is always distressingly high – the shares are inherited by the next person. Whatever profits there are get ploughed back into the community in the form of awesome events and siphoned back to the workers as dividends. Everyone has a stake.

If that sounds a bit revolutionary, it’s because it is. As far as I know there’s nothing like that anywhere in China or the world. But wind the clock back – for a few years at City Weekend we really felt that we were spearheading a revolution – web 2.0 – which was going to overturn the old model of publishing. And we succeeded until mobile suckerpunched us. There’s precedent in our local media to innovate. This time though it won’t be just a publishing model, but a production model and ultimately an ownership model.

If this current negotiation falls apart (as I suspect it will), then someone should run a Kickstarter campaign to buy up Ringier’s distressed Beijing assets. The angle is crystal clear – be part of making local media everyone can be proud of.

Beijing has always been a good place for a revolution.