Each morning when James Lu drives to work, he streams economics podcasts that he purchased through iGet, a mobile app launched by Luo Zhenyu, one of China’s most recognisable media personalities.
“In big cities, people are too busy to read books and watch movies. Famous personalities can teach you knowledge that let you seem as if you have read the book or watched the movie yourself,” he explains.
iGet is just one of a burgeoning cohort of new media start-ups that trade branded knowledge for money that China’s tech groups are betting on, as a country infamous for pirating demonstrates an increasing willingness to pay for content.
“People trust the personal brand, and there’s this vacuum there for real information. Everyone knows the media is bought and paid for. Having these people who can speak to you in a real way and who have built large followings through providing information that is real is obviously going to attract a lot of people here [in China],” says Matthew Brennan, co-founder of China Channel, a digital marketing agency.
China’s tech oligarchy — Baidu, Alibaba and Tencent — have made monetising digital content a priority as the number of new users slows.
Social media group Tencent now runs the country’s biggest music streaming service after merging QQ Music with China Music Corp. Baidu has more than doubled what it spends on content creation and fees to acquire streaming and broadcast rights, from Rmb914.5m ($133m) in 2015 to Rmb2.21bn in 2016.
However, the number of digital entertainment subscribers is just a sliver of the hundreds of millions of users registered on China’s most prolific social media apps. Tech companies are exploring new ways to cash in on the user-generated content and expert analysis they host that until now has been largely distributed for free.
“People are time poor and money rich in China now, and it’s a very good thing for content,” says Mr Brennan. “Now there are lots of successful case studies of people monetising knowledge and the beginnings of a much healthier ecosystem for content creators than in the US.”
A January survey of internet users conducted by Guokr.com, a Chinese science news and education website, and Netease, one of China’s oldest internet companies, found that 75 per cent of users said they were willing to pay for quality content, while 52 per cent believed high-quality content providers deserve payment.
“In the early stages of the internet, tech companies relied more on a free consumer model. But as the volume of content has increased, quality has not kept up, and users have to spend more time and effort screening. They are willing to pay more for content curators that can promise high-quality content,” says Lou Meijing, analyst with the Beijing-based consultancy iiMedia Research.
The biggest knowledge platforms have leveraged the personal reputation of speakers to charge fees.
There is Fenda, based on Reddit’s “Ask Me Anything” format, in which users pay to hear celebrities and industry experts answer user-submitted questions. Created by Guokr.com, Fenda attracted early investment from Tencent last November as well as the founders of Xiaomi and Lenovo. The more popular the answer, the higher the payout for both the respondent and the asker.
Last May, investor Wang Sicong, the son of the founder of Dalian Wanda, attracted a media firestorm when answers about everything from financial advice to his sex life reached a price of nearly Rmb5,000 apiece ($750). JD.com, the ecommerce platform, and search engine group Baidu have launched similar question-and-answer apps.
Tencent-run WeChat jumped into the fray this month when founder Pony Ma announced a beta test with invited users that would test out payment models for WeChat public accounts.
WeChat’s base of 856m active users means it commands a huge audience of potential paying readers already linked up to WeChat Wallet, Tencent’s mobile payments platform, yet it has delayed in rolling out a concrete payment model.
“WeChat is behind in this respect, because content subscription is not the heart of WeChat’s business model. They are payment and finance driven, not content driven,” says Thomas Graziani, founder of WalktheChat, a privately owned, independent tech company.
With more than 65m users, the most successful knowledge platform is Zhihu, a free Quora-like platform backed by Tencent and Chinese internet group Sohu and the first knowledge platform to achieve a valuation of more than $1bn. It launched Zhihu Live last year through which users can pay for one-on-one sessions with an expert live-streamed to the user’s device. The average speaker earns about Rmb8,300 ($1,200) per session.
“In a community-driven model for knowledge, there are a lot of options and choices for content that are more appealing to consumers, whereas the traditional media is a lot more controlled,” says Anita Huang, an operating partner for Sinovation Ventures, an early investor in Zhihu.
This month, popular culture website Douban launched its own live-streaming feature, banking on its core audience — well-educated, culturally-attuned millennials — will shell out money to hear their favourite public intellectuals and artists discuss topics ranging from current affairs to trends in music and poetry at a starting price of Rmb128 ($20).
“Chinese consumers are notably interested in not only owning information but also owning perspective,” says Min Jiang, a professor of communications at University of North Carolina Charlotte, who studies Chinese popular media.
“You can read the newspaper, but how you interpret that story can be quite different . . . and that second part is more important sometimes than the first of just getting the facts straight.”
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