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This article was published on October 13, 2009

Can the Future of Western Newspapers be Saved by China?

Can the Future of Western Newspapers be Saved by China?
Dr Matt McDougall

When looking at the Western and Chinese online newspaper landscape, many obvious differences are evident. There has been much written recently about the demise of the newspapers in the West as their circulation plummets and their online revenue models struggle to counter these losses in revenues. But what about the situation in China? Is the outlook as bleak? Is their similar trends and examples as there are in the US?… This is what I wanted to explore and understand more.

Most publishers in the Western markets are focused on how to charge for news. (such as the recent calls by Rupert Murdock for ‘pay per view’ news reading models for his papers) But there’s very little talk about how to innovate the packaging of news, much less a new UI for news. There’s very little talk about how people consume news on the web, about the value of aggregating articles from multiple sources, about solving consumers’ problems rather than publishers’ problems.

That’s why when I saw the new Google product, Fast Flip, which allows news consumers to “flip” through news stories I knew that the newspapers have more to worry about that their decreasing offline circulations. I believe Google is doing exactly what the offline publishers should be doing… Looking to innovations and taking the lead on creating the new news packages/news products. Google has a great strategy- take control the lucrative front end of distribution, while publishers are left with far less profitable back end of content creation.

Further, Technology has allowed everyone to be a journalist. Citizen journalists are becoming a credible source of information (look at the impact twitter has made on CNN) and a part of modern journalism. Also, technology embodies the two essentials that characterize field reporting: speed and convenience.What this does is fragment the news consuming audience… more sources, more up to date more timely, and with a perspective that matches the readers interests (or they would not seek out this blogger/twitter).

So what about the Chinese context?

The largest newspaper in China, the government owned People’s Daily, which is said to print 2.8 million copies per day. The newspaper derives its main revenue from subscriptions and big business advertising, many of which are also state owned. In a country where the press and many advertisers are run by the government, it’s not hard to see why the state is keeping itself in business. This is clearly one of the main differences in the newspaper dynamics compared to the West.

Also, technology in China has also spawned a huge increase in user generated content… creating a lot of informal blog/BBS content but citizen journalists have yet to be included by the mainstream online newspapers onto their editorial pages- Government censorship would simply not allow this.

Further, this week, Rupert Murdoch told the first World Media Summit in Beijing that India’s opening up its market to foreign competitors served as a creative and financial catalyst, and China should learn from this example. He said,  “The digital renaissance offers China an opportunity to exercise leadership,”. according to the Wall Street Journal. Saying the government could open the country’s “digital door,” Murdoch alluded to China’s “open door” policy in the 1970s, which led to economic reforms, the WSJ reported.

So, it looks like at least one media barron’s strategy is to have the Chinese Government open the door to his taking a position in the Chinese newspaper market and this may provide more breathing room for them to come up with an online model in for their broadsheets in the Western markets. As much as I think this is the hope of Rupert (and many others that are watching from the sidelines) I would speculate that the Chinese Government is in no hurry to allow this.

What do you think? Is the notion of a bankrupt media company better than a government-funded one?

Source: Digital Marketing Inner Circle

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