Edward Chin Chi-kin, a hedge fund manager and one of the leading lights of the Occupy Central movement, plans to launch an independent newspaper that he says will not bow to political pressure.
He says he will adopt the crowdfunding model used by The Hankyoreh, a South Korean national newspaper.
Chin’s plan is to raise about HK$100 million (US$12.9 million) for the newspaper with investors contributing as little as HK$5,000 each. (If everyone will contribute just the minimum amount, he will need 20,000 investors to raise the fund he needs.)
A brief look at the history of The Hankyoreh may give us some idea as to how the crowdfunding model works in the media industry.
The newspaper was put up by dissident journalists who had been purged from their respective news organizations at a time when media was under the thumb of government censors.
It was launched on May 15, 1988, just a few months after the victory of Roh Tae-woo, a friend of military dictator Chun Doo-hwan, in the 1987 presidential election. The Hankyoreh was “a symbol of a more democratic future for South Korean citizens” as it gave hope to the pro-democracy forces, according to the newspaper’s former editor-in-chief Sung Yu-bo.
Being an opposition paper, it had a hard time wooing advertisers.
In September 1988, the newspaper’s board approved a capital increase of 7 billion won (US$6.83 million) and started to raise fund publicly. It raised one billion won in the first month, 800 million won in November, and 600 million won the following month.
In January 1989, the company set up a special committee and developed three strategies to raise a development fund.
First, it appealed directly to the public. In one of its advertisements, the paper said: “The Hankyoreh Newspaper is here for the Korean public, with 430,000 subscribers and 50,000 stockholders! Invest now. Small contributions make a big difference at The Hankyoreh.”
Second, it conducted investment seminars for potential investors.
Third, it granted commission to employees who could bring in investors.
“The commission received by the first batch of employees who were able to get investors encouraged other employees to look for more investors, and so the fundraising effort took off instantly throughout the company,” Sung said.
All the three strategies enabled the newspaper to raise its working capital to 16.9 billion won as of January 1990, he said.
The crowdfunding strategy worked in two ways: it was able to raise funds for its continued operation while bolstering its image as national newspaper, with thousands of small investors having a stake in its survival and prosperity.
With the funding, the paper was able to further increase its readership, deploy correspondents to Washington and Tokyo, acquire its own land and build a new office, and upgrade its printing facilities.
The question is, will the crowdfunding model work in Hong Kong? Will there be enough readers to support such a paper? Will there be enough investors to raise the funds to keep it going? And will it be able to cope with the intense competition in the business?
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