Beijing News versus TOM.com
(Southern Weekend) The Media Environment behind the case of Beijing News versus TOM.com. By Cheng Gong and Su Yongtung. December 21, 2006.
"3.72 million RMB!"
On November 17, after a detailed and complicated calculation for the more than 25,000 reports and photographs, Zhang Yan asked the court to amend the original complaint. Previously, he had asked for 3 million RMB.
Zhang Yan is the lawyer representing Beijing News. On October 16, Beijing News filed a lawsuit in a Beijing middle court against the TOM.com website which is owned by the Beijing Lei Ting Wan Jun Network Technology Limited Company.
According to Beijing News, TOM.com had been republishing its articles without authorization from 2003 to September 2006. Beijing News is demanding a public apology and compensation.
The director of TOM.com's legal department explained to our reporter that this was all a "misunderstanding," but he admitted that TOM.com had republished those reports without being authorized by Beijing News. "We are seeking an out-of-court settlement. We cannot reveal the details to you."
In the second half of 2005, Beijing News' legal department initiated telephone contact with TOM.com over the problem of unauthorized re-publishing.
"They did not reply, but they began to delete some of the Beijing News reports that they had re-published," said Zhang Yan.
Ever since the launch of Beijing News in November 2003, TOM.com has been quietly re-publishing their news reports. According to a senior Beijing News person, they were too busy with launching the newspaper to pay any attention to TOM.com.
From 2004, Beijing News began to sign contracts with all the major commercial portal websites. "We signed with several large commercial portals, including Tencent and Xinhua Net. Only TOM.com was unwilling to sign," said this senior Beijing News person.
In early 2006, Beijing News approached TOM.com again but received no response. On June 13, Beijing News sent a formal letter to TOM.com to ask them to cease and desist, and to pay the royalties in accordance with the regulations. But TOM.com refused to respond directly.
"As of today, TOM.com is still re-publishing Beijing News article."
Obviously, the arrogant attitude of TOM.com pricked the self-respect of Beijing News. From July on, Beijing News began to collect vast amounts of evidence and they went to the Beijing City Notary Public to validate the evidence. On October 16, Beijing News formally sued TOM.com in court.
"Beijing News' defense of its rights is not just a matter of demanding compensation for copyright infringement," said legal representative Zhang Yan. "We want to use this lawsuit to promote the formalization of cooperation between Internet media and traditional media, such that the traditional media can attain a reasonable position in the cooperation."
Beijing News's lawsuit against TOM.com led outsiders to interpret that the traditional media are issuing a "challenge" to the new media which is represented by the major portal websites.
In the past several years, the traditional media as represented by the newspapers have boycotted the commercial websites. They complained that the commercial websites use their news reports for very low cost (or even for free) and they cannot protect their intellectual property rights.
In October 2005, more than 20 leaders of metropolitan newspapers in China met in Nanjing and issued the Declaration of Nanjing to call for all the newspapers in China to unite in order to reverse the trend of the newspapers becoming workers for the portal websites and to raise the negotiating power of the traditional media.
Three months later, the Liberation Daily group released a "Proposal to Form A National Newspaper Content Coalition" to 38 other newspaper groups. Publisher Yin Minghua personally met with the leaders in the other newspaper groups about this content coalition and called for raising the barrier for Internet re-publishing in order to protect their own intellectual property rights. "We will use one coalition to fight the other coalition."
This series of actions by the traditional media caused some Internet editors to be concerned. If the newspapers really joined together, will the performances and profits at the commercial portal websites be affected?
Sina.com global Vice-president and Chief Editor Chang Dan told our reporter that he wasn't worry about these issues. "Did you see anything happening with those declarations and coalitions?" He said, "You can search for two keywords: 'Sina.com' + 'Liberation Daily' and you will know what the outcome was."
In August this year, the Liberation Daily group announced that it will form a strategic partnership with Sina.com. The two sides reached an agreement: At a time when media properties are being consolidated, the best option is for traditional and Internet media to move ahead hand in hand. In September, Liberation Daily group publisher Yin Minghua wrote in <News Battleline> that win-win cooperation is an inevitable logic.
"We don't look favorably upon the declarations and coalitions. Just like the self-discipline pacts among service providers, these are shows that are put on for outsiders," said Chen Dan.
"Modern Express" is the metropolitan newspaper group that initially proposed the Nanjing Declaration. It has incurred the wrath of the three big commercial portals. The rumor is that its news reports were "banned" at one point from the news channels of the three major portals.
This year has been regarded as a "turning point" in the newspaper industry in China. Ad expenditures in newspapers went down by 3%, while ad expenditures on the Internet went from 1.9 billion RMB in 2004 to more than 3 billion for an annual growth rate of 78%.
"There is no information from any single media outlet that we must procure at all costs." Chen Dan said that about half of Sina.com's media partners are paid. But "there are too many" who are knocking on the door trying to get in.
"In China, there might be four or five similar metropolitan newspapers in a moderately sized city. The competition is fierce. The newspapers have no leverage to negotiate with the portal websites," said NetEase Vice-president Li Yong.
"Right now, I would love to have Sina.com and Sohu.com use my news every day. I only hope that they will specify the source," said Huaxia Times publisher Cui Enqing.
Democracy and Legal Times chief editor Li Mingxun said that a weekly newspaper with a circulation of only 100,000 can only use the portal website to establish a national influence. "We are cooperating with the portal websites, but we have not yet gotten to the point of talking about money."
For New Century Weekly executive chief publisher Liu Feng, his magazine has been out for less than one year. He needed the 'magnifying glass" known as the Internet to increase name recognition. He said that the two sides are "symbiotic."
For Li Yong, there are two reasons why the "news supermarket" is successful. First, the existing rules in the administrative system mean that there are only local newspapers that are marketized for general readership. The commercial portal websites fill the gap by becoming the substitutes for national newspapers that are marketized for general readership. Secondly, the newspaper business is immature and weak in its understanding of copyrights.
As a source of supply in the "news supermarket," the cost of operation for traditional media is rising. In the <Proposal to Begin a National Newspaper Content Coalition> offered by Liberation Daily, it is said: "It costs several tens of millions of RMB each year to produce a general readership newspaper. But when we hand our excellent-quality news information over to the Internet media, we just get a symbolic several tens of thousands back. There is a vast difference between the costs and rewards.!"
Modern Express executive vice president Zhao Lei was interviewed by our newspaper and he said, "We call for the protection of the publishing rights of news reports. We are not trying to protect the paper quality. We are protecting and respecting 'original journalistic creativity.'" "Most mainland Chinese newspapers are working for the portal websites for little or no pay." Zhao Lei thinks that the price for the re-publication does not reflect the value of the content.
While the two sides are trying their best to compete each other, a large group of traditional media elite have quietly joined the Internet media. This has even become a industry trend.
Recently, former Beijing News chief editor Yang Bin joined Hexun as chief editor. Some time ago, former Nanfengcheng chief editor Chen Juhong became the chief editor at Tencent; former Beijing News deputy chief editor Wang Yuechun temporarily became the executive deputy director at Sohu.com; former ComputerWorld vice-president and chief editor Wang Chao joined the Guangyuan Media as president; former Economic Observer publisher He Li joined Sunshine Media group to become the chief executive in charge of new media business in the Greater China region. Of all the traditional media elite who have switched over, the most impactful was when former Global Entrepreneur chief editor Li Yong joined NetEase as vice-president and chief editor in May last year.
Why are these traditional media elite all going into new media?
"Once you work in Internet media, you won't want to go back into traditional media," said a senior person who just went over to a portal website. This veteran media worker had spent eight years in print media since 1998. He discovered an unbeatable advantage for Internet media over print media in the effectiveness and efficiency of distribution -- such as its speed and volume. From the collection of news to distribution, Internet media can update immediately. By comparison, traditional media have to go through information gathering, editing, layout, printing and distribution. The frequency of updating is also restricted by the production process in print media.
"For example, there was a recent news about how traffic on the Guangzhou-Shenzhen railroad had to stopped due to a huge explosion. Within one hour of the incident, our website announced the news. The newspapers won't be available in the streets until next morning, or more than 12 hours later," said this veteran media worker.
Similarly, Internet media do not have physical restrictions such as print space and paper costs. Right now, many mobile telephones can receive the short news messages from the Internet.
"Working at the website, we can have several front page stories every day. There are fewer restrictions and the freedom of movement is greater. It gives me a sense of accomplishment," said Li Yuxiao. One month ago, he had switched from Southern People magazine to Tencent to take charge of the news channel.
He is especially excited about the interactive nature of Internet media: at the peak period, a headline news story can gather several tens of thousands of page views in the blink of an eye. The comments left by the netizens under the news story cannot be replaced by the traditional telephone calls and letters in traditional media.
The advantages in the system of new media is an important factor that attracted the media elite. This includes a flexible worker incentive system, so that the talents are retained through stock option reward plans. Presently, most traditional media are state-owned systems and therefore do not have the flexibility in using stock option plans.
People in the industry are also trying hard to figure out ways to boost traditional media.
Chinese Renmin University School of Journalism professor Peng Lan is one of the first scholars to study Internet news. She said that "the traditional media should develop according to the trend and reform their own business practices, develop their own new media products and create their own space."
"Of course, these new formations and products (such as mobile telephone, electronic newspapers) will blur the boundary between various types of media. So it will be hard to say who won in the end. Instead, we only ask for a multiple-win outcome."
For example, even though the commercial websites do not have the right to gather news, in certain specialized domains (such as those that do not involve the sensitive areas of politics and current affairs), "there will be more and more original news stories and certain famous bloggers will infiltrate into the traditional media and specialized Internet media by various means."
Peng Lan believes that the trend is for the traditional media and Internet media to engage in "competitive cooperation." "Competition is the engine for cooperation, and cooperation is the destination for competition. The future cooperation should not a simple question of supplying or sharing the resources. Rather it is about redefining the production process and redefining the roles of everybody in this new production process."
"The Internet media republishing the news reports of traditional media is a rather elementary form of cooperation between traditional and new media with low efficiency," said a senior portal website official. "We are presently looking for more satisfactory ways of cooperation."
In March this year, Tencent and Chongqing Commercial News tested the water first by establishing a regional portal website -- Dayu Net. This is a commercial portal model which used the newspaper's content together with the strength of QQ's communication channels in order to share the benefits.
In earlier years, the traditional media started their own websites which had to live or die on their own. Today, some traditional media are starting their own portal websites: Southern Metropolis Daily bought Shenzhen Hotline and turned it into Oeeee.com; Beijing Youth Daily bought Qianlong net.
They are obviously not satisfied with the current state of things.
Copyright suit in China called opening salvo in media war Howard French, International Herald Tribune.. January 3, 2007.