Paid Content, A Distant Dream

(Chinese Version)

The emergence of paid content providers such as Fenda(voice message based Q&A service) and Zhihu affirms the possibility of gaining profit directly from content. Paid subscription content such as Li Xiang s Business Insight has debuted on Dedao s APP while Ma Dong s Talk A Good Talk has been launched on XIMALAYA FM, attracting thousands of users paying to taste the content. These successful cases no doubt have given content providers the incentives and hope to carry on on this path.

However, when users are paying ￥199 for Li Xiang s content, are they contributing to the development of a sustainable cash-in model for content, or merely a crazed fad?

The enthusiasm for paid content has cooled down

When Ji Shisan announced that Fenda s market valuation had hit over 100 million dollars 42 days after the product came online, users enthusiasm for Fenda has in fact started to cool down. In some way, this announcement from Ji Shisan is more of an attempt of self perseverance when faced with the decline of popularity.

Although Ji Shisan has stated openly for multiple times that the time for knowledge content on the Internet to cash in has come, the development in the last two months have proven that the fragmented voice message based Q&A model is just a casual entertainment for most people. Many of those popular respondents on Fenda that attract data traffic are celebrities and the most frequently-asked questions for them are about their private life and gossip.

Some say that the fragmented settings on Fenda, such as the 60s voice message reply limit, hold the platform back from becoming a truly professional content platform. In this case, what are the prospects of text-based paid content products that can convey more information in today s rapidly developing Internet world?

Recently, the attention getter Li Xiang s Business Insight, a paid column, amassed an explosive growth in just a few days. Within three days, the number of subscribers surged to over 50,000 at the price ?199 per subscription. It s estimated that Li Xiang and the platform have harvested a revenue of over ten million RMB, far higher than people s expectation.

People trust Li Xiang s professional insight, that s why they are willing to pay for his content (Li Xiang had worked at prestigious companies such as The Economic Observation, Bloomberg Business, and Economic Weekly etc.). But more importantly, the audiences are also agitated by the promotional introduction: The column has been highly recommended by Liu Zhichuan, Jack Ma, Lei Jun, Li Kaifu, and Chen Kexin since its debut.

The subscription page of Li Xiang's Business Insight

The passion of the audience didn t last long. One month later, the subscription started to decline, losing its strong momentum in the beginning. An experienced media insider who has also subscribed to Li Xiang s Business Insight revealed to TMTpost that the views of Li Xiang s articles on the column is also falling.

“The quality of the content is not that amazing as the way it s promoted. The news reviews mostly touch the tip of the ice berg without getting any deeper. Personally speaking, I am not sure I will continue to subscribe next year.”

In contrast to Li Xiang s Business Insight, which has been the very center of attention, the Offline, a rather quiet paid digital magazine is seemingly struggling to get people s attention. The Offline is a digital magazine that focuses on how technologies influence every aspect of culture, business and social life. Currently The Offline operates and releases new issues on its official website and WeChat official account. It s said that the digital magazine will roll out print magazines in the future.

In April this year, the Offline launched a “random subscription” package, which offers a discount to subscribers when subscribing a half-year of a full-year package. One of my colleagues purchased the random subscription package right before the activity ended and became a paying subscriber. The Offline gave her a subscription number, 00421, suggesting that she s the 421th subscriber.

In one afternoon in late June, the Offline s cofounder Fu Fengyuan told TMTpost in an interview that the number of subscribers of Offline in the first two months after the magazine came online has been around 600, voicing his concern about the future growth of subscribers. The Offline s team is also hoping that they can make use of industry leaders and successful entrepreneurs fame to draw attention. On Offline s website, names like Feng Dahui, Ji Shisan, and Wei Wuhui are displayed on the promotion section which titles Who s Reading Offline.

It s apparent that making use of the names of thought leaders in the Internet industry has become a common method to promote content.

Of course, the Offline is not as famous as Li Xiang s Business Insight, since the thought leaders that have subscribed to Offline are not as well-known as Jack Ma and Li Zhichuan etc. who are subscribers of Li Xiang s Business Insight. Perhaps, the fact that Offline operate independently also contributes to this current state. At present, subscribers can only pay to read on Offline s official website and the contents are sent to them via emails regularly. Li Xiang s Business Insight on the other hand is backed by Dedao, which is built upon the brand image and reputation of Luo Zhenyu s team.

Paid content products similar to Li Xiang s Business Insight were able to take off quickly for the support of capital and the power of the platforms they are on. In this case, Fu Fengyuan stated that the biggest challenge for Offline at present is figuring out how to promote the brand name and strike cooperation agreements with third-party platforms such as Dedao, Zhihu and Douban etc.

The latest print version of Offline

Freemium model doesn t work?

Many content providers that aren t in the center of attention like Offline didn t start with paid content, which makes them different from Li Xiang s Business Insight. Li Xiang s Business Insight has adopted the paid content model from the very beginning for all of its contents.

The Offline, instead, has been trying the free + paid model, or in another term, freemium. Offline regularly pushes some free contents on its WeChat official account and other platforms so as to attract viewers to subscribe to paid content. Offline issues new contents weekly and the charge models include two-months subscription and full-year subscription: Entry-level members pay ?20 for one-month subscription and ?200 for full-year subscription; senior-level members pay ?120 for two-month subscription or ?600 for full-year subscription.

Offline is not cheap either.

Fu Fengyuan told TMTpost that the fee not only includes the contents, but also offline activities such as conferences Offline will organize in the future. On Offline s website, it s written that entry-level members can attend one offline activity while senior-level members can attend four during the subscription period.

That s the difference Fu Fengyuan believes that sets Offline apart from the crowd. Offline wants to filter users and build its own community, improve user loyalty and retention rate, and subsequently build up an image through this membership mechanism.

However, marketing mechanisms that are highly reliant on reputation might not be as good as it seems to be. The fact that Offline only has around 400 subscribers confirms this in a way. And the number 412 subscriber mentioned above told TMTpost that she wouldn t really recommend people to subscribe to Offline, and the reasons are as follow:

“Nowadays fewer people are willing to pay for articles on the Internet. That s the reality. I don t think people I know will need Offline s content. Models that are against sharing will find it hard to survive.”

Another reader of Offline who has been subscribing for a long time also told me that the free contents Offline pushes are already enough for daily digest, and that there are plenty of quality and free WeChat official accounts out there for people to read, thus there s no need to pay for extra contents.

The successful American paid content provider The Information s founder Jessica E. Lessin told TMTpost on the Boao Forum for Asia that the content provider should adopt paid content model in the very beginning if it wants to build a paid content platform; and although there would be obstacles in accumulating users in the early phase, the problem would be solved once the platform earns itself a brand name, a reputation.

Furthermore, it should be noted that Li Xiang s Business Insight and the Offline don t allow users to have refund. In reality, paying for non-returnable contents seems to be much of a gamble for many consumers, since there s no guarantee that you can get the quality content you expect in the coming days.

Fu Fengyuan told TMTpost that digital reading is Offline s attempt to transform from print medium to digital. “If we could not achieve the goal on user growth by the end of this year, we might try to operate in another way,” he said. “But we will continue to provide our readers with quality content.”

So here comes the question: the first half of 2016 has already passed, if Offline couldn t achieve its target by the end of the year, what would happen to users that have made the full-year subscription?

Ethical and legal issues of paid content models

When some people are showing off to their friends about paying ?199 for Li Xiang s Business Insight, 300 people only spent ?9 for a full-year contents of the column on Taobao. What s worst, that s only the sales figure from the Taobao shop with the higher sales record. These sellers will upload the column s newest contents to encrypted clouds once there is an update.

Piracy is not an uncommon phenomenon on the Internet. On the Internet, it literally costs almost nothing to copy intellectual properties. All you have to do is copy and paste. As UGC platforms continue to surge explosively and cloud platforms rise, it is even more convenient and safer to copy other people s work and benefit from it.

In the past, most contents on the Internet were shared for free. Such tradition could and has already led people into the mindset that neglects copyright protection. Since the public can have free and easy access to information, most of the time content creators do not benefit from the content they created. Therefore, many content providers don t even care if their contents are being copied or not, they only want their works to spread further and reach a grander audience so as to increase their popularity.

At this point, promotion accounts keep posting quality content generated by netizens on Zhihu and Douban again and again to attract followers on Weibo. After amassing a huge base of followers, these accounts then start to post ads, extracting major commercial benefits from advertising. Copyright violations like this anger the netizens, and it has raised the awareness of copyright protection on the Internet.

It should be noted that in the field of paid content, authors utilize their contents to acquire economic benefits. The views or listens are deeply linked to the income platforms make. If the contents got leaked and spread for free, it would not only directly affect content providers income, but also the user experience the paying readers enjoy.

For instance, Wang Sicong collected 20 grands on Fenda for his answers and replies, but they were later posted on the Internet very quickly. Without a doubt, Wang Sicong possibly doesn t care for such amount of money, but the reality is that some people don t have to pay a cent for Wang Sicong s information.

However, it seems that Dedao and Taobao have both initiated their strategies in response to such issues. Even before TMTpost released the report, if you searched Li Xiang s Business Insight on Taobao, you would find nothing at all as Taobao tells you that the items have been removed due to legal reasons. “If the contents are being replicated, that in some way proves the value of the contents,” Fu Fengyuan said, commenting on the copyright issues on the Internet. “In fact, some part of me hopes that Offline is going to be pirated. But of course, if there are indeed pirated versions of Offline, we would go after those thieves as well.”

Still, there are some unspeakable sadness in the air when Fu Fengyuan hoped for the content to be pirated or to spread for free. Startups like Offline and other independent and not so known media are still struggling to sell their contents to cash in. Perhaps the time just hasn t come for paid content yet.

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[The article is published and edited with authorization from the author @Li Chengcheng, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.