The End Or the Start of Journalism?The Online Extension of Chinese Print Media
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The End or the Start of Journalism? The Online Extension of Chinese Print Media Ms SONG Yan MPhil Candidate Journalism & Media Studies Centre The University of Hong Kong
End or start? Restrictions or opportunities? Traditional Western so-called “offline” media are fully matured and the space for further development in their original pre-Internet sphere is limited, so they have been expanding their presence to the online battlefield. For them, the decision to go online is tantamount to one between change and extinction. The situation for the Chinese media could not be more different. Longtime government restrictions on traditional media have retarded their development in the offline sphere. Viewed from another perspective, that means these restrictions, which are slowly lifting, have left a lot of potential for the Chinese media to grow. What Chinese media are now face is quite different from traditional Western media – it is not a story of a sad ending but rather a happy beginning, both in the offline and online media sectors.
Since the economic reforms that started in 1978, Chinese media have experienced considerable advances both in terms of what they have been allowed to do and what they have sought to do. More recently, the media sector has received a boost from the emergence of the Internet, which possesses the ability for the first time genuinely to reach a mass audience.
This paper is a summary of the findings of a qualitative study I recently completed at The University of Hong Kong on the Chinese media, with a special focus on how traditional media are approaching the Internet. I present findings from three case studies on print media out of a total ten that I conducted, based on information from the face-to-face interviews. The material in my study has rarely been included in the past literature on this subject.
The three case studies are about Sanlian Life Week, which is the most cautious among traditional media about investing online; Beijing Lifestyle, the website has positioned itself to implement a uniquely localized strategy on the Internet; and Beijing Youth Daily, whose affiliated website is among the pioneers of the use of the Internet and one of the most successful news sites in China.
Political factors – the last bastion of China’s planned economy Unlike developed Western countries, China has been in a process of economic transition since 1978, and these changes have created an environment for the media that is completely from that of their Western counterparts. China has witnessed significant changes both politically and economically as it moves from a centrally planned economy to a market economy.
- 1 - However, the so-called transition economy in China has to be defined more exactly in the media context. China’s media remain heavily controlled by authorities, with government intervention providing clear evidence the market is not that free. Qian Gang, Co-Director of the China Media Project at The University of Hong Kong, says he believes the transition of the Chinese media market is “even worse than the most awkwardly ‘transformed’ state-owned enterprises” and calls it “the last bastion of China’s planned economy”.
The unique situation of the Chinese media in a rapidly growing economy is that has two conflicting roles – one is that of a mouthpiece of the state and the Party (in this sense, it represents more a cause than an industry), and the other is that of a watchdog for society – a role that is widely accepted for the media in other parts of the world, reporting news as well as making profits1. However, the first role of the Chinese media is so stubborn and powerful that the other role has been prevented from fully maturing.
Up to now, only governmental offices, or government-approved operations, are allowed to publish news, and even then, only under stringent restrictions. The licenses governing news outlet, for instance, limit the subject matter, the regional distribution, the media form, and so on. Consequently, real competition is hard to find in the Chinese media market.
State-owned and Party-controlled According to the relevant provisions issued in 1999 of laws governing the media, all Chinese media companies are ultimately state-owned, no matter who has invested in them2. Also, all Chinese publications operating legally must be distributed with government approval, which is guaranteed by the licensing mechanism. .
As such (before the Properties Law was adopted in 2007), for example, Wang Yan, owner of Beijing Lifestyle, was deprived of ownership of the media company in 19993. A decade after the legal proceedings concerning the ownership of Beijing Lifestyle, the restrictions have since been slightly loosened.
Furthermore, some executives of Chinese media enterprises are actually political figures, which actually accentuate the propaganda role of the relevant media. For example, Mr. He Huazhang, proprietor and editor-in-chief of Chengdu Business Daily, was promoted to be Director of the Propaganda Department of the Chengdu Committee of Communist Party and later vice mayor of Chengdu city in the last decade4.
The influence of WTO has yet to felt Unlike many other services such as telecommunications, which have been opening up according to a fixed schedule after China’s accession to WTO, no provision has ever been made concerning the media sector5. Without violating any rules, the Chinese media field remains unchanged after “surviving” the anguished internal structural adjustment and several rounds of trade negotiations with the external world.
- 2 - However, some scholars expect changes to take place in the Chinese media industry as a result of the irresistible opening set in motion by accession to the WTO. For instance, Xie Xinzhou points out that “with China’s increasing participation in the WTO community, the Chinese media are being more frequently requested to join contests on a worldwide scale and thus the armor [of the hefty governance] will definitely be whittled away.”6
Legal factors – complex regulations and various permits As Xie notes, back in 2003, seven licenses were required to launch any Chinese news site. As time passes, even more permits are required to launch particular Internet businesses, because a number of online applications have been developed and improved rapidly in recent years, such as blogs, podcasting, video streaming, and so on.
Many different government entities are either responsible for, or are involved in, issuing various permits or filings, including the State Council (including the Information Office), General Administration of Press and Publication (GAPP), the Ministry of Industry and Information (including the dissolved Ministry of Information Industry), and the State Administration of Radio, Film and TV (SARFT).
Here, for example, are some basic and compulsory permits, which are listed on the front page of Sina.com, and they illustrate the complexity of launching a news site in China.
Figure 1: Various permits listed on Sina.com 1. Permit for providing Internet content (ICP) 2. Permit for Internet cultural businesses 3. Permit for Internet publication 4. Permit for audio-video content service 5. Permit for Internet news publication 6. Permit for Internet information service on drugs 7. Permit for Internet information service on education 8. Permit for electronic bulletin services 9. Permit for wireless value-added service (VAS) 10. Permit for telecommunication service 11. Permit for Internet information service on health
- 3 - Commercial factors – optimistic print ads and difficult online ads
Stagnant newspaper ads According to a report of WAN (World Association of Newspapers), the circulation of paid newspapers rose by 2.6% in 2007, with China and India marked as the two markets with the strongest growth. In particular, China was the biggest newspaper market by circulation with a daily average distribution of 107 million. But this may not indicate that the Chinese newspaper market, consisting of some 2,000 titles7, is as rosy as it seems, despite being better than that seen in the markets in the developed world.
This is borne out in data on ad revenues. The monitoring data of CTR (China Market Research) show that 2007 ad revenues of newspapers witnessed annual declines for the first time, dropping 1%, compared to the previous year after experiencing two slow years of incremental growth. The downturn continued in the first quarter of 2008.
As Qian Gang points out in the interview for this study, despite the slow growth of ad revenue in recent years, revenues in absolute terms are still quite large, so the threat may not feel fatal at this stage. In the peace before the storm arrives, some news organizations have started, however tentatively to react, such as Beijing Lifestyle, and a few have been practicing online journalism and exploring new revenue models for years, such as Beijing Youth Daily.
Prosperous magazine ads Newspapers have been hit more badly by the Internet, because they perform more of the functions that the Internet can also provide, and so can be replaced by the Internet. In contrast, China’s roughly 10,000 magazines8 have been largely immune to the penetration of the Internet, because what they provide is not as easily provided by the Internet.
Moreover, the explosive economic development of China has substantially improved the living standards of Chinese people and nourished a number of magazines focused on fashion, lifestyle and money. For example, from July 2007 to June 2008, Cosmo, as one of some 20 publications of the Trends Media Group, alone earned RMB 613.2 million (US$ 89.7 million). This compares with annual ad revenue of RMB 1.2 billion (US$ 168.9 million) generated by Sina.com, the leading Chinese web portal.
There are several reasons that explain the profitability of Chinese magazines.
First, the readers of magazines are different from those of newspapers. For instance, Zhu Wei, Editor-in-Chief of Sanlian Life Week says, “The reason why the magazine is profitable is just because the publication has been constructed upon a high-end platform, which has successfully generated ad revenue from high-end readers.”
Second, the Chinese media market is far from mature and high quality publications are still rare. “The fast economic growth of China is actually able to nourish more
- 4 - news outlets [than it actually does],” says Yang Daming, Managing Editor of Caijing Magazine.
Furthermore, politically, the Chinese media market is not completely free, because the total number of titles of publications is strictly controlled under the publication licensing policy. So without introducing complete competition into the Chinese media market, the existing players, no matter good or bad, may be able to remain alive anyway and would barely feel any commercial pressure.
As Zhu Wei, Editor-in-Chief of Sanlian Life Week, puts it, “Our magazine is number one in this category [news magazines] in China in terms of circulation and influence. If some day, the second and third players become serious threats to us, we will definitely try to figure out other approaches to harness our competitiveness. But right now, such fierce competition isn’t happening.” Zhu’s views illustrate why Chinese magazines feel less pressure to go online.
The predominate position of Chinese web portals Ten years ago, the backward attitude and performance of Chinese offline media on the Internet provided Chinese web portals with big opportunities. Nowadays, it is easier for Chinese commercial sites to recruit top talent and develop and promote complex applications while being financed by venture capitals and stock markets, compared to Chinese news sites affiliated with Chinese print media.
In addition, as online pioneers, Chinese web portals have been far more experienced and sophisticated in publishing online news and as a result they are far more popular among Chinese online readers. Alexa’s charts show that the distribution range of daily reach 1 of the five major Chinese web portals are roughly eight times that of the most popular Chinese news sites affiliated with traditional Chinese media. The huge gap between Chinese web portals and news sites affiliated with print media means there are a lot of obstacles for Chinese print media to overcome in order to find their footing in the online media arena.
1 Reach, defined by Alexa, the most widely used online traffic monitor, measures the number of users. Reach is typically expressed as the percentage of all Internet users who visit a given site. So, in this case, if cctv.com has a reach of 0.42%, this means that of all global Internet users measured by Alexa, 0.42% of them visit cctv.com. (http://www.alexa.com/site/help/traffic_learn_more)
- 5 - Chart 1: comparison between news sites affiliated to traditional Chinese media2 Source: Alexa, August 15, 2008.
Chart 2: comparison between five major Chinese web portals Source: Alexa, August 15, 2008.
Case studies In the developed countries, the question for offline media companies is how to make full use of their websites and how to implement smooth cooperation and interaction
2 CCTV.com is the online branch of China Central Television Ynet.com is the online branch of Beijing Youth Daily Xinhuanet.com is the online branch of Xinhua News Agency People.com.cn is the online branch of People’s Daily iFeng.com is the online branch of Phoenix TV
- 6 - between offline and online sectors. However, in China, to some news outlets, the question is whether it is really compulsory and worthwhile to go online. The publications that have taken a conservative view toward investing in online operations have surprising yet logical reasons for theirs decisions, while the Internet embracers also appear to have a convincing logic behind their drives and goals.
Sanlian Life Week – cautious and reluctant of investing online The circulation of the publication is number one in the category of news magazines, exceeding the combined circulation of the second and third ones.
Despite the low cost of maintaining the website, which is RMB 30,000 (US$ 4,400) in 2007, Zhu says he remains skeptical about the commercial value of the website, given the company’s experiences so far. Indeed, Zhu is a self-professed doubter about the need for the publication to go online at all. Since the launch, network traffic has never been significant, nor has the site generated much in the way of online ad revenues, says Zhu. He says he thinks news websites are still struggling to discover viable revenue models and that web portals along with their news integration services are a sunset industry in the face of competition from fast-growing Internet services like Google and Wikipedia. In explaining his reluctance to embrace the Internet, Zhu cites three reasons.
Reason One: The return on investment (ROI) in online media is inadequate. The problem is not confined to Sanlian Life Week, according to Zhu, but is common to all Chinese media seeking to generate revenues through Internet channels. Also, the existing print business model is what works for them, as it does for Sanlian Life Week.
Reason Two: The online market for niche publications has limited growth potential. Since 2007, Sanlian Life Week has been cooperating with Sina.com to have their articles re-published on the web portal. By appearing on Sina, the articles can increase their rate of page views by as much as ten times compared to the magazine’s own website, but Zhu says he is not convinced the articles are reaching the right readers. “The majority of Chinese online readers still lack interest in our content and the magnification effect created by Sina.com is thus quite limited, because the audience is low-end whereas the magazine’s target audience and content is high-end,” Zhu says. “My observation tells me that most viewed blogs are either written by celebrities, or related to sex or sensational topics. It’s so hard for decent Chinese media to grow well off the cultural soil here.”
Reason Three: The Chinese appetite for online news is declining. Zhu also argues that the appetite for news among Chinese online readers has actually declined in proportion to the number of users coming online each year, although he does not provide hard data to support the point. In the pre-Internet era when Chinese people had few alternative channels of information other than governmental mouthpieces, Chinese people longed for an abundance of news and information, Zhu says. After the Internet was introduced, their thirst for information was overwhelmed by Chinese web portals whose news aggregation provided their audiences with much more news at a much higher speed than any other news outlets or TV stations could. However, as time passed, Chinese online users gradually lost their passion for massive news consumption. In particular, Zhu says, they are tired of what he calls “news
- 7 - derivations,” or the web portals’ habit of providing hundreds of versions of news reports around one core story. As a result, Sina.com and other Chinese web portals have inevitably begun to experience a fall in their page views.
Beijing Lifestyle – prudently following the lifestyle of Beijingers Beijing Lifestyle is a weekly bundled newspaper in color print and it works as a consumer guide in Beijing. Its circulation started dropping in 2003, but the main cause was not the Internet but the change of Beijingers’ lifestyle. Since that year, the number of private cars has been booming in Beijing and the middle-class people, the target audience of the paper, has been shuttling between home and office by car instead of via public transportation. Because people mainly read the paper on bus or in subway, the transportation shift had a considerable impact on the circulation. Furthermore, the municipal government has been trying to make the city look neater by removing some newsstands from streets. This measure even further worsened the circulation. As a consequence, the logistic matter has been a big challenge for the media company.
However the good news is more and more readers are accessing the content over the Internet. Because leisure reading off screen is not as noticeable as reading off a newspaper, actually the network traffic during the work hours is very optimistic.
The paper is recognized and appreciated by many advertisers because it reaches the potential consumers preciously. For this reason, Beijing Lifestyle holds a unique policy for the online branch. In order to inherit the offline advantage, the website remains concentrating on Beijingers only, whereas many websites are designed to target a wide range of audiences. Consequently, the website invests only on the Internet connection in Beijing but not on elsewhere. The result is the access from South China is quite slow but it does not matter to the newspaper at all.
Beijing Youth Daily – a forerunner of an affiliated news site Beijing Youth Daily, the official publication of the Beijing Communist Youth League subordinate to the Beijing Municipal Committee of Chinese Communist Party, was started in March of 1949. In December of 2004, Beijing Media, the parenting media group, was listed on the Hong Kong stock market as the first ever Chinese media group to go public overseas. Ynet.com is the first website derived from a core print business of the media group.
Ynet was launched by three staff members from the technical department of the newspaper. In fact, the website staff wanted to get disassociate the newspaper from its website, because they felt he name tainted the website with the impression of being state-owned, traditional and a regional mouthpiece.
However, in 2007, Ynet.com had to merge with Qianlong, a regional news website supported by the Beijing municipal government, a real online mouthpiece. The acquisition, however, was a total political act, according to Mr. Xu Jian, CEO of the website. Having had a chance to take a close look at Qianlong, Xu was strongly impressed by its culture inherited from the state-owned era, which is an attitude lacking in a drive for self-motivated development. Nevertheless, Qianlong had a
- 8 - different vision of newsworthiness. For instance, the news appreciated by Qianlong was often disliked by Ynet – Qianlong judges news according to how the government reacts to it, which grants funding when pleased; Ynet, in contrast, follows the audience’s demands when generating and publishing content.
What Xu expects and aspires is to partner with other Internet giants. Ynet.com has been cooperating with MSN, MySpace and eBay, in the hope of promoting its content through their high popularity and exposure to Internet users.
Some facts about Ynet.com illustrate how popular Chinese news sites are practicing online journalism. Ynet.com provides daily update of 40,000 pieces of news automatically and 1,000 manually by online editors, a daily traffic of 40-50 million page views, partnerships with 375 Chinese offline media companies and major revenue from wireless value-added services followed by online advertising.
The overall landscape expected unchanged in the near future The Chinese offline media environment will likely remain cozy and relaxing for quality publications for one or two more decades, according to Yang Daming.
First, politically, the Chinese media market is not completely free and the majority of existing news outlets in China are not the quality ones surviving fierce competition in a free market but the legal license holders backed by various governmental institutions. Also, the fast economic growth of China could nurture more new titles.
Second, the availability of a good journalistic workforce is another problem. Ironically, many Chinese publications have experienced difficulties recruiting qualified journalists, despite some 700 journalism schools run in China. Consequently, the scarcity of capable journalists hinders news outlets from feeding the Chinese audience with abundant and satisfactory news reports. A considerable number of well-cultivated journalists may thus come out of the next generation.
Third, the commercial factor also contributes to shape the Chinese media scene. The Chinese media market is relatively open to Chinese investors, but an agreement has not been widely reached about how online journalism could be practiced in China, which means an unpredictable return on investment. Chinese commercial sites used to burn and are still burning money while discovering the right model for online news services. What kind of online models would be suitable and profitable to Chinese news outlets remains unclear or unknown, because successful models have not yet been developed.
To sum up, the development of the Chinese media is still at a burgeoning stage and Chinese media companies are learning how to practice offline and online journalism in parallel.
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