Bertelsmann Book Club Establishes Strategic Alliance with Sun Media

Bertelsmann Book Club in China has entered into a strategic alliance with two subsidiaries of Sun Media Group Holdings Limited: Jingwen Records Company Limited and Sun Cross Media Development Company Limited. The comprehensive strategic partnership, which covers the Greater China region, will focus on publication logistics and media product distribution, whereby the two companies will complement each other with their respective competitive edges. As announced today in Hong Kong, Bertelsmann will distribute Sun Media Group’s quality media products through its well-established customer base in the PRC, while Sun Media Group will enhance Bertelsmann Book Club’s product range with content from Jingwen Records and Sun Cross Media. The products of both companies will be distributed through their extensive sales networks spanning the PRC, and especially regions outside Shanghai, further expanding the business of the Bertelsmann Book Club. Both companies have great confidence and expectations in this strategic cooperation.

Mr. Ekkehard Rathgeber, President of DirectGroup Bertelsmann Asia, said, „Sun Media Group’s great success is due mainly to its familiarity with the PRC market and to the management’s global philosophy. Anchorwoman Ms. Yang, a partner in the company, provides the essential public image for the promotion of Chinese culture. Sun Media Groups outstanding multimedia distribution business also played an important role in our decision to form a strategic partnership. Our cooperation with Sun Media Group is another step forward in Bertelsmann’s localization strategy.“

Mr. Xu Zhong Min, Chief Executive Officer of the Sun Media Publishing Group, expressed his admiration for Bertelsmann’s operative strategy in the PRC, saying, „Bertelsmann’s localization strategy has laid a solid foundation for our co-operation. Bertelsmann’s existing customer base in the PRC will strengthen our distribution capability, effectively promoting Sun Media Group’s media content resources. This cooperation not only creates a win-win situation, but also enables more audiences in the Greater China Region to enjoy our quality media products.“

Founded in Shanghai in 1997, Bertelsmann Book Club - a subsidiary company of Bertelsmann’s direct-to-customer division DirectGroup - was the first joint-venture book club in the PRC. It introduced the book-club concept to the Chinese market, a significant step in Bertelsmann’s business development in the PRC. Bertelsmann Book Club currently has 1.5 million members nationwide, with 6 club centers in Shanghai and cash-on-delivery payment service in seven major Chinese cities - Shanghai, Beijing, Guangzhou, Tianjing, Hangzhou, Nanjing and Suzhou. In all, over 700 different products, including books, CDs, VCDs, DVDs and computer games, are offered through catalogues sent out to members four times annually. Bertelsmann Book Club sells a total of more than 7 million items each year. BOL China was launched in December 2000 as a supplementary channel to the Club, and has since become one of the top three online media product suppliers, offering more than 160,000 products online. Bertelsmann Book Club aims to pioneer direct-to-customer service for Chinese culture and entertainment in the PRC.

Sun Media, a listed, Hong Kong-based media group founded in 2000, operates three TV stations, produces own program content, and does trade in audiovisual products. Jingwen Records and Sun Cross Media are the focus of Sun Media Group’s distribution activities. Jingwen Records, one of the largest distributors of original audiovisual programming in the PRC, joined the Group in April 2002. Having developed a comprehensive distribution network of audiovisual products, Jingwen Records also acts as sole agent for the distribution in the PRC of audiovisual content by „Universal“, „Warner Brothers“, „EMI“, „Dream Works“, „National Geographic“ and „Discovery“.

Sun Cross Media is mainly engaged in researching and developing authorized „Discovery Channel“ products, the establishment of „Discovery Channel“ chain stores in the PRC market, and the publication of 3 self-owned brands series including TV books, regular books and audiobooks. Sun Media Group is committed to establishing a comprehensive network combining the publication and distribution of books, audio and visual products. This will not only accomplish Sun Media Group’s transformation from a single TV media into a multimedia group, but also expand its income sources from TV advertising to include a combination of advertising, publication and audio-visual products.