Epic Showdown Looms in China: Don’t Bet Against the New Media

In the eerie flash-film “EPIC 2014” (released in 2004), traditional mass media organizations are no match for nimble, aggressive and highly personalized news aggregators. The conflict comes to a head in 2011 when The New York Times acts on behalf of 180pxgooglezon the “slumbering Fourth Estate” in a landmark copyright infringement lawsuit against the formidable “Googlezon” and the other aggregators. The U.S. Supreme Court ultimately rules in favor of Googlezon. The Times discontinues its on-line edition, leaving it only with a printed paper for aged and nostalgic readers.

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The visionary film is proving prescient in many ways. But the great showdown between old guard mass media organizations and new media aggregators may be happening four years sooner than predicted – and in a jurisdiction 12,000 miles from Washington, D.C.

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A copyright infringement lawsuit filed by one of China’s largest newspapers is expected to be taken up soon by a court in Shanghai. The Beijing News is suing popular Internet site Tom.com seeking the modest sum of $400,000 in damages. But the suit has far-reaching significance.

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Just as they have in the U.S. and Europe, digital news media in China are putting the hurt on mass media, especially daily newspapers. Declining newspaper circulation leads to reduced advertising revenue, which leads inevitably to consolidation and downsizing – unless the newspapers fight back.

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A January 3 story in the International Herald Tribune (“China Newspaper Suit Against Internet Portal Called Opening Salvo in Media War”) describes the coming battleground...

“There is a very brutal competition between newspapers, with seven or eight big ones just in Beijing, and now a big new player, the Internet, wants to wipe them all out, to change the landscape,” said Yu Guofu, a lawyer who specializes in intellectual property matters.

“The press is leading a hard life and facing an unpleasant future, but it has decided it is better to protect its rights than just sit and wait to die,” Yu said.

Yahoochinawinslawsuit2_1 Chinese Renmin University School of Journalism professor Peng Lan believes that a trend is emerging for traditional media and Internet media to engage in “competitive cooperation” that will benefit both parties. “Competition is the engine for cooperation, and cooperation is the destination for competition,” she says. (Western translation: Think joint venture.)

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Last March, Tencent and Chongqing Commercial News launched the first regional portal news site, Dayu Net, to marry the newspaper’s content with the agility and distribution power of the popular website. Other cooperative ventures are sure to follow.

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(Communist China may seem like an odd place for a precedent-setting media showdown as it hasn’t exactly been either a haven for copyright protection or for free expression on the Internet. But China is trying to at least give the appearance of cleaning up its act so it can fully reap the benefits of world commerce — just yesterday China signed a sweeping memorandum to crack down on Internet piracy of trademarked intellectual property including software and movies. Time will tell if the leopard is truly changing its spots.)

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Media battle lines are being drawn elsewhere in the world as well. In Belgium a ruling is expected this month in the dispute between Belgium newspaper publishers and Google Belgium. Google is charged with copyright infringement for its news summaries culled from the newspapers and other sources; Google contends that its service benefits the newspapers by bringing readers to their Web sites. Sound familiar?

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Whether Tom.com, Google and other aggregators agree to pay small royalties to mainstream media, are permitted to freely aggregate, or choose to combine with other news organizations, it’s clear the communications landscape is fundamentally changing all over the world. Corporate media strategies that focus only on traditional mass media already are woefully inadequate.

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- Jon Harmon

Comments

  1. Perilocity says:

    Beijing News v. Tom.com

    For copyright infringement.
    In China.

  2. David says:

    Jon,
    Superb post.
    Several interesting things are happening in China to drive all of this:
    1. The government can no longer afford to subsidize the media, so it is gradually pulling back its funding, forcing the guys who own printing presses, news wires, and TV studios to go make a buck on their own.
    2. These media properties, now without their government patrons, are at the mercy of market forces.
    3. Most of the folks working in traditional media are superb at production, but are awful at marketing. After all, their system was “if you print it, they will read” for decades.
    4. The web guys, on the other hand, are excellent at marketing but have limited skills on the content creation side when compared with their traditional media brethren.
    What this means, of course, is that the web guys are scrambling to get good at content, and the traditional players are running just as hard to figure out how to engage audiences.
    Is China’s media a heavily regulated sandbox ringed by protectionist laws and policy? Absolutely.
    But it is a sandbox nonetheless, and some amazing things are happening.
    David

  3. Jon Harmon says:

    Very insightful thoughts. Thanks for posting. It will be very interesting to watch all these forces at work in China. And as you point out, cooperation between mass media and new media in China is a natural because of each’s strengths and weaknesses. But will they trust each other enough to really cooperate?

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