The relationship between traditional and online media is creating tensions everywhere in the world, but China is putting a unique spin on this struggle.
As online media started to develop in the latter 1990s, media authorities panicked, fearing they would lose control over a media sector that has been restrained severely by government controls. In reaction, Internet companies were banned from hiring journalists and collecting information independently. They could only republish news that had already be published in one of thousands official newspapers.
Initially Internet companies tried to ignore or circumvent those regulations, but in the end they had to comply. Over the years, by repackaging the existing news in very clever ways they have become major media players anyway. Their wide reach makes them real competitors for advertisers' revenue.
Under the original arrangement, Internet media could republish articles for free or for a rather small fee. Since advertising revenue was booming anyway, everybody was happy to get a piece of that ever-expanding pie. However, that consensus ended last year as suddenly newspaper income dropped dramatically.
The Economic magazine (as translated by ESWN) reported, "According to research conducted by the China Renmin University Media Management Research Institute, the total revenue of the newspaper industry in the first half of last year was falling. Advertising revenue fell between 10-30 percent, with some newspapers falling by more than 40 percent. On August 26, 2005, Beijing Youth Media announced a net profit of 170,000 RMB [renminbi, the Chinese currency] for the first half of the year -- a 99.7 percent drop compared to the 66,309 million RMB for the same period last year. The media were in an uproar. Previously, in the past 20 years, its advertising revenue had been growing by an average of 33 percent per annum."
Now the traditional media want to get paid more for their content, as Internet media grow more wealthy. The debate has started and is unlikely to go away very soon. (More background: See China Herald)
