Whoever wins in the medal count, the true winner in Beijing might be technology itself. As David Carr noted in his New York Times piece, NBC has done its best “to plug online leaks of the flashy opening ceremony of the Beijing Olympics in order to protect its taped prime-time audience 12 hours later”. This effort was both intense and somewhat silly, with various anchors trying to give the impression that China is not really 12 hours away from New York. Or marking time by offering less than culturally rich discussions on whether chopsticks should ever be left sticking out of a bowl of food (they shouldn’t). All this fussing by NBC probably wasn’t necessary because, even as people were finding ways around the Olympic blackout, the total global television viewership was huge—more than 34 million viewers. The opening ceremonies received 70M page views; more than ten times the number enjoyed by Athens in 2004.
While television is the glamour technology of the moment, the story with legs might be mobile. This would come as no surprise, of course, given the 565 million mobile devices currently in use in China. Nielsen Mobile considers the Olympics a “watershed moment” for this application. Nicholas Covey, Director of Insights for the company remarked that the “event-driven and around-the-clock nature of the Olympics makes the next few a really important testing ground for mobile media” (http://mediapost.com/publications). And China is all about watershed moments: it just surpassed the U.S. in Internet usage with 250 million online (OK, so there are more Internet police in China.). Of the 4.5% global ad growth anticipated in 2009, China will likely supply more than 30%. This is one hot country. But wait! PaidContent.org notes that the Russian online sector grew 73% last year. And this market will grow from around $400 million in 2007 to $4 billion in 2017 assuming, I suppose, the region is not in flames.
China had at least 5,000 years of culture and history to package as Olympic symbolism and the opening ceremonies were nothing short of art projecting the national psyche, uncovered and rediscovered. It’s hard to tell if Chinese authorities will take a more relaxed view of media after the Olympics. As we have seen, in the run-up to the Games, the media police were out in full force making life difficult for international journalists, fearing the mere viewing of forbidden sites might free Tibet. It was widely reported that TimeOut Beijing—the English language edition, was closed down weeks before the Olympics, presumably to reduce the likelihood of feisty reporting or of singing the praise of gay bars in a tourist-blessed Beijing. Magazines (and occasionally people) can fall into a dark hole in China. The people I asked at the General Administration of Periodical Press (GAPP) didn’t seem to know or care much about this event. The closure was likely no more than another small assurance that the official Communist Party Olympic narrative would remain intact.
My guess is that, despite the national and international glow associated with the Games, the fundamental media scene won’t change too much. Television and the Internet are and will remain the big advertising revenue drivers. The magazine universe will not change much from its current lines of demarcation. Strong international brands will continue to get the lion’s share of display advertising. Of the estimated 9,500 magazines in China, most will remain unprofitable, unless the government agrees to a consolidation and a “roll-up” of titles in the various categories. This seems unlikely as magazine, newspaper, and book licenses have been spread out among the provinces and that authority, power and prerogative is difficult to take back. GAPP officials told me that they still encourage international titles, as long as they are in the science and technology categories, a sector that is already oversubscribed in the country. And with few new magazine licenses being granted, this invitation seems lukewarm at best.
But just to look at magazines gives a very incomplete view of the media market, especially when considering the digital space. IDG China is one of the best examples of a company that over time has brilliantly married print and digital businesses—and kept them separate in the operational sense. To be sure, the company got an early start with the pioneering work of Pat McGovern. IDG has also been prescient in a way, thinking strategically about a possible “post-print” world even when print remains strong. IDG China’s venture capital company has a very impressive portfolio of companies including Myspace China, Sohu, the premier portal site, and Baidu, the leading search engine.
While top international magazine brands have managed to become dominant in China, at least in terms of advertising dollars, U.S. Internet companies have not been able to do the same thing. Baidu has about 65% of the search market with Google at about 26% and growing. Baidu has been helped immeasurably by being cozy with the Chinese government and has benefited from a degree of nationalism. Google hasn’t conceded anything to Baidu but will likely focus more on local search and mobile applications.
If mobile is the future for China, video is the Wild West. Duncan Clark writes in the Wall Street Journal (July 22, 2008) that Google’s acquisition of YouTube lit a fire under video-sharing in China. Since 2006 foreign venture capitalists have invested close to $300 million in video sites. China has managed to build a firewall around the Internet so it didn’t take long for Chinese authorities, playing catch-up, to get a handle on video. Since the beginning of the year video and audio web sites would require a license, just like magazines. Due to the fierce protests from video-sharing sites, the government relented for a bit. Members of the American Chamber of Commerce (AMCHAM) I addressed in Beijing said that the government seemed to be arbitrarily shutting down video sites, including the top sites like 56.com and Tudou.com that were backed by significant Western venture capital.
This is the way of censorship in China. All media, including digital, will sooner or later have to get a license to publish. This is what video sites are doing; Youku.com com is the first leading player to receive a license from the government. Others will follow suit. Those who don’t will likely find their sites inexplicably shut down. And, as the world turns, video sites, like magazines, will take on the responsibility of self-censorship, thus staying clear of the vicissitudes.
The web site Ars Technica (http://arstechnica.com/news) has an interesting series on piracy in China. Piracy is the other side of censorship. The appropriate government ministry will close down Rolling Stone for an offensive cover or TimeOut Beijing for what it might publish in the future, but it does little to prevent media or any piracy. Ars Technica reported that “Some of the games on the Olympics’ official web site appear to have been blatantly copied from some independent game developer here in the U.S.” Developer Cadin Batrack claimed that the Olympics’ game “Fuwa Fight the Winter Clouds” bore an uncanny resemblance to his “Snow Day”.
The game has been removed from the Olympic web site but my pain remains. I bought tons of these cute Olympic Fuwa mascots for my nieces and nephews and to discover they have been tainted by the piracy brush is enough to make me weep.
Charles McCullagh
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