Sat, Apr 30, 2016 - Page 9 News List

Internet media start-ups fight China’s censorship crackdown

Investors in Chinese media are betting outlets can meet the demands of an emerging middle class looking for fresh content, but increasing censorship is making it hard for start-ups to establish their niche

By Shai Oster  /  Bloomberg

Illustration: June hsu

Will Cai (蔡華) is a pedigreed insider in China, where he clerked on the nation’s highest court and went on to become a high-profile merger and acquisition lawyer. That has not made it any easier to run a news Web site at a time of the nation’s worst media repression in years.

His site, Initium Media (端傳媒), debuted in early August last year and the next week an explosion hit the northern city of Tianjin. His editor-in-chief Zhang Jieping (張潔平) quickly dispatched three journalists to the scene, where toxic chemicals stored in a warehouse had erupted in a fireball that spewed debris and poisons over nearby apartments. The reporters slipped past security cordons to write about the disaster that claimed more than 150 lives and then reported on the connections of the warehouse owner. Within days, Initium’s Web site was blocked in China

Zhang and Cai never heard directly from Chinese officials, but they are convinced the nation’s increasingly strict censors cut off Chinese readers. Since then, the Hong Kong company has had to shift its business model and editorial approach. It is focusing on Chinese-speaking readers outside China and has pulled its reporters out of the nation, using freelancers to cover less sensitive culture stories.

“On the one hand, that meant we are doing some good, serious journalism. On the other hand, we must now really focus on the overseas Chinese market,” Cai said. “We are hopeful that gradually China will open up its media market.”

The Cyberspace Administration of China did not respond to a request for comment.

China is in the midst of a media crackdown, with tightened censorship, blocked Web sites and televised confessions from reporters.

Nevertheless, the country’s media industry is booming. China’s biggest Internet companies and start-ups like Initium are making record investments in news, movies and online television shows to satisfy the growing demands of Chinese consumers.

Venture firms put US$2.71 billion into Chinese media deals last year, more than five times the average during the previous four years, according to PitchBook Data Inc.

Alibaba Group Holding, whose primary business is e-commerce, has acquired Hong Kong’s largest English-language newspaper, a video streaming Web site and a television and movie production company.

Alibaba chief executive Daniel Zhang (張勇) refers to the company as an “e-commerce media ecosystem.”

“There is such pent up demand by the emerging middle class for culturally relevant fare that investors are right to scramble,” J. Walter Thompson Co advertising agency’s Asia Pacific chief executive Tom Doctoroff said.

China has more than 1 billion mobile phone users, looking for content beyond the traditional television stations and news outlets that have been under tight state control since the Chinese Communist Party (CCP) took power in 1949.

Investors are betting they can profit from developing the nation’s own versions of Netflix, YouTube, Snapchat and Vice Media.

“The widespread use of smartphones in Greater China has created a tremendous opportunity for digital media,” said Marcus Brauchli, former executive editor of the Washington Post and founder of North Base Media Ltd, which has invested in a Taiwan-based news site. “For many younger users the traditional media brands either aren’t well known or are tainted by association with governments or political allegiances. They’re looking for fresh, honest and engaging content, for voices and viewpoints.”

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