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Media & Entertainment

Apple Daily enjoys advertising surge after founder's arrest

Small business rally for Jimmy Lai's feisty Hong Kong paper may not be sustainable

Apple Daily’s bumper Aug. 16 edition carried 13 pages of supportive messages on faux Post-it notes in echo of the “Lennon Walls” that anti-government protesters had previously set up around the city. (Photo by Kenji Kawase)

HONG KONG -- Hong Kongers who in recent days have rallied to support Apple Daily by buying extra copies as well as stock in its parent company are also stepping in with another lifeline for the embattled newspaper: advertising orders.

"We just want to keep Hong Kong's freedom," said hair salon owner Holas Cheung, who contributed to the purchase of a half-page ad in last Friday's edition of Apple Daily by more than 100 salons and stylists. "If we don't do it now, Hong Kong will be game over."

While Cheung acknowledged that listing his salon in the ad might turn off some pro-government residents who hear of it, he said "We have had more people coming to our place after the advertisement."

Since Jimmy Lai's arrest and the raid on Apple Daily's offices by some 200 police officers Aug. 10 in relation to alleged violations of Hong Kong's national security law, the paper has seen a surge in advertising sales to small businesses.

The Aug. 12 edition included more than a dozen ads taken out by external clients in the paper's front section. Two days earlier, there had been none, with just one on Aug. 11.

Ads took up some two-thirds of the front section of the Aug. 16 edition, which carried 13 pages of supportive messages on faux Post-it notes in echo of the "Lennon Walls" that anti-government protesters had previously affixed around the city.

"Our phone keeps ringing," said an ad sales manager at Apple Daily. "We have not been so hectic for a long while. The number of enquiries has jumped tenfold at least."

Most traditional media in Hong Kong, as elsewhere, have been under pressure as the slow squeeze on their ad sales has intensified greatly under the coronavirus pandemic. Apple Daily's woes, however, have long been magnified by the paper's editorial activism against anti-democratic moves by the local government and Beijing which in turn has seen supermarkets, developers and other major Hong Kong ad buyers take their budgets elsewhere.

Lai, arrested on allegations of colluding with foreign forces, was released on Aug. 12 but still faces charges in relation to his involvement in unauthorized demonstrations held over the past year.

In a special edition for the paper's 25th anniversary at the end of June, Lai wrote of the advertising woes, "Since Xi Jinping's rise to power in 2012, things went from bad to worse."

Lai also cited public pressure from C.Y. Leung, vice chairman of the Chinese People's Political Consultative Conference and Hong Kong's former chief executive, who has habitually criticized companies continuing to advertise in Apple Daily.

Next Digital, Apple Daily's parent company, has posted five straight years of losses. Revenues in the year ended March 31 fell 11% to 1.15 billion Hong Kong dollars ($148.36 million) as the company's net loss reached HK$415.2 million.

The current ad surge is giving some relief.

"At the end of the day, a newspaper needs stable revenue to produce high-quality content. And we hope to contribute to that," said Frankie Chow who last week placed a subtle quarter-page ad for his travel website Flyagain featuring little more than a small company logo.

Online sharing of the ad led to some 50,000 new followers for the company on social media as well as queries from Chow's friends for the contacts of Apple Daily's sales team. "Now everyone knows the return on investment of advertising in Apple Daily is very high," he said.

Mike Lam, owner of a Thai grocery store with 21 outlets in Hong Kong, bought the paper's full front-page ad space for a day, which he said generated a 30% to 40% surge in sales at his shops.

"I will continue to advertise on Apple Daily, not only because of its effectiveness in promoting my brand, but also for safeguarding the freedom of press," Lam said.

Next Digital Chief Executive Cheung Kim-hung told reporters on Aug. 14 after the company's annual shareholder meeting that the ad sales rise had been "significant."

Hong Kong police arrested publisher Jimmy Lai on Aug. 10.    © Reuters

Commenting on the increased sales of papers and ads, he said: "We do not know how long these will last. So it is difficult for me to assess how much revenue these will bring to our company. We will print newspapers according to the demand."

Sales of newspapers have surged, beginning with the Aug. 11 edition which showcased stories on Lai's arrest and the police raid. Printing 550,000 copies that day, close to eight times the ordinary run of 70,000, the media company sold 510,000, the second highest sum in the company's history, according to Cheung. The paper has continued to print daily editions at an elevated rate.

Leung, Apple Daily's nemesis, has questioned the paper's recent success on his Facebook page.

"Innocent trees. Innocent ink. Innocent landfills. Apple Daily boasted of its sales," he posted on Aug. 12, alongside a list of convenience stores with unsold papers. He later posted photographs of stacks of such papers.

Support for Apple Daily, though, has also expanded into the stock market, sparked by an online call to support the company through financial market actions.

The company's stock, which had been thinly traded penny shares, led the whole Hong Kong market in turnover volume last week. After dipping to a new low of 7.5 Hong Kong cents soon after news of Lai's arrest on Aug. 11, the shares peaked the next day at HK$1.96 then ended the week at 40 Hong Kong cents.

The roller coaster touched off a warning from the Securities and Futures Commission of Hong Kong to investors to "exercise extreme caution."

An academic who follows the media industry said the ad sales surge might not last long.

"The power and magnitude [of the gains] were unexpected, but I am not sure if this can be sustained," he said. The outlook for Apple Daily remains dark in his view, with "an official policy to crack down on Lai and his company no matter what it takes."

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