Media apps make headlines in a fast-evolving landscape
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E-mail China Daily, August 24, 2015
"With mobile phones, people can read the latest news in a more efficient way," Zhang Yiming, founder of Toutiao.com and head of the app's parent company Beijing Bytedance Technology Co Ltd, said. "It so much easier now."
While Toutiao has yet to release detailed financial figures or media contract fees, the privately owned company has increased advertising revenue and is now breaking even. But it still has no plans to branch out into providing original content as the company does not have a full time team of journalists in place.
"We will stick to being a news platform," Zhang said. "That is what we do best."
The success of Toutiao illustrates the problems that mainstream media firms, such as newspaper groups, face when trying to stabilize revenue in a changing landscape dominated by online rivals.
Last month, a report published by the China Internet Network Information Center showed that news apps were only second to instant messaging players, such as WeChat and QQ, both part of Tencent Holding Ltd, when it came to online traffic. More than 459 million people clicked onto news apps by the end of June, roughly 77 percent of the Internet users in China, according to the Beijing-based CNNIC, a government-backed industry body.
"The number of those who access news via smartphones has grown 10.6 percent in the first half of this year, compared with the 6.4 percent of instant messaging users," the report highlighted.
But despite breakneck growth in the sector, industry insiders have warned that many of the new news kids on the block might struggle to stay afloat.
Already major social networking apps, such as WeChat and Weibo, are beefing up their news coverage and attracting online readers from media startups.
"Unlike the personal computer-based Internet era, in which news was gathered by major portals, such as sohu.com and sina.com, the mobile online industry has produced a wide range of apps in an extremely competitive market," Tao Jingqi, director of research at Talking Data, an Internet data service provider, said.
Last month, a survey released by Talking Data reported that the penetration rate of news apps among mobile Internet users was about 60 percent, lower than CNNIC's 77 percent.
"This is a mature market and will continue to grow steadily," Tao said. "But I don't think we will see a dramatic increase in the sector."
Her views were echoed by Li Senhe, chief executive officer of Zaker, a mobile news app, which collects content from other websites through copyright deals and employs nearly 200 staff.
This allows users to build their own magazine based on individual interests. "The days when you just launched a news app and users rushed to download it are gone," Li said.
Indeed, the marketplace has become as crowded as a subway train during rush hour.
Dozens of news apps have sprung up in China. They range from those rolled out by established newspaper and magazine companies to online portals and media providers, such as Toutiao and Zaker.
In this melting pot, apps run by traditional online sites are dominating the Internet media scene, but that could be changing. "Apps designed to provide news to individual tastes are now showing great potential," Tao, of Talking Data, said.
Tencent, which has the largest market share in the news app industry through its own dedicated portal, Tencent News, has already made significant moves to tap into this trend.
With 250 million active daily users, the company plans to radically update its service. "Personalizing our content will be an important part of the apps development," Wang Yongzhi, editor-in-chief at Tencent.com, said.
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