Media: the end is near – the WTO column

(later also at Chinabiz)
The story that China’s traditional media are in a bad shape is not new, and I have been writing about this more often. But recent surfaced details on the state of the traditional media have even beaten my most gloomy predictions.

According to a recent survey by China’s domestic search engine Baidu online starlets are dominating its top-10 of most famous people in China. Former hits on those lists like former leader Mao Zedong and filmmaker Zhang Yimou have fallen to the 9th and 10th place, giving way to the internet stars of today, as internet-watcher Sam Flemming notes. The internet is replacing the traditional media as a way to format society.
Of course, you might argue, Baidu is an internet company and might have a strong bias in favor of the internet. Like cooking the books is nothing really new, making up top-10’s without having even a quasi-scientific basis is nothing new.
But the traditional media are also capable of going down the gutter without the help of the internet.

Declining readership and melting audiences for traditional media is not a unique Chinese feature. Media worldwide are on this slippery slope downhill for decades. But the Chinese market has shown a few trends that would go against that worldwide trend of decline, at least until recently.
First, ad revenue in China has exploded over the past fifteen years, making the media industry into some of the more profitable worldwide. Chinese media started off from zero, so achieving high growth was initially not so hard. Later, one China-hype after the other made advertisers blind for the sad truth. Certified audits for the circulation of print media have never existed and TV-ratings are sloppy at best. Earlier this year the TV-rating agency AC Nielsen announced it wanted to expand its current number of Chinese households it was monitoring. How many households do they monitor for their TV-ratings in the whole of China? Three hundred! I’m not much of a statistician but more qualified people fell into a fit when they heard that number.
That bizarre situation has led to a market where papers and magazine are sold for less than the price of the paper they are printed on.
Secondly, most Chinese media have become lazy because of the comfort they have been used to. When they moved away from becoming exclusive governmental announcers they did not look for an audience to serve, at best they wanted to serve the advertisers. That might be understandable, since those advertisers provided their main source of revenue, but it is causing a crisis now the media actually would need their audiences to survive.
Of course, the Chinese media are also restricted by governmental restraints on what they can publish and what not, but the efforts to really provide a service to their audiences have been scarce at best.

Since last year, the ad revenues of the traditional media have come into a free fall. In an effort to catch up with the steady decline of Western media, their downturn seems rather dramatic after a few decades of unrestricted growth. In 2005 ad revenue growth for daily papers declined for the first time and caused a panic. Shocking details about their declining reach have showed up in tandem.
Even the China Daily spelled out recently how little traditional media still mean for the urbanites where they were so popular.

Personally, I’m betting on the online media. Not because they are better, they are not even the main reason for the current decline of the traditional media. The basis of the way media are produced have changed dramatically worldwide. In China, because of very specific conditions, it took a bit longer to discover that mass media are lacking the economic rational they had in the past. Still much of the old power and capital is there, but it will need a magician to let them survive from the current crisis.

Fons Tuinstra