Toutiao, China’s top news aggregator app, uses machine-learning technologies to promote relevant content to prospective users and now it has pledged to offer more cash incentives and traffic dividends to help individual writers build up their follower base and thus increase content exposure. (PHOTO: CHINA DAILY)

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Prior to the internet age, the imbalance between the development of quantitative content and the demand for personalized services meant that startups in the field of content production had trouble attracting investment. With the arrival of Toutiao, a popular Chinese news app, which uses artificial intelligence to create personalized feeds of news and videos, content production startups have begun to boom.

In addition to technological innovation, the growing number of content production startups could contribute to the enlarged pool of talent, new business models and a shift in the consumption structure.

 

Pool of talent
Content production is a labor-intensive industry with an emphasis on creativity, so those with imagination are crucial players.

In the era of mass media, the publication channel was monopolized, so there was a series of standards and requirements that content producers had to follow. However, in today’s world, the media channel monopoly no longer exists and more amateur content producers have begun to dabble in the field. Online platforms have begun to share the traffic and market revenue with content producers, creating the first batch of content entrepreneurs on the internet.

It is also this group of amateur content producers who multiplies the size of the content pool, undermines the value of content from professional practitioners, and squeezes the market share of mass media. In the wired internet period, the restrictions of time and space left some breathing room for traditional media, but mobile internet today practically penetrates every facet of people’s daily lives, fundamentally disrupting the traditional media.

In this light, upon spotting the challenges and opportunities posed by the internet, some mass media practitioners have begun to leave posts and launch their own content production startups, injecting professionalism into the business.

In addition to amateur content producers and former mass media employees, more and more ordinary people are taking part. People have become increasingly accustomed to viewing images rather than simply reading text, and the emergence of live streaming, short videos and other visual platforms has lowered the amount of professional skill needed to produce content.

What’s more, with the increasing industrialization and intellectualization of social production, manual work and standardized intellectual labor are gradually replaced by machines, freeing mankind from the old-fashioned physical labor and sparing them more time to engage in content production and consumption, which provides a vast pool of human resources for the content industry.

 

Multiple platforms
To start with, internet technology overcomes the scarcity of media space that existed in the mass media era, facilitating the free circulation of massive amounts of content on the internet.

Second, the internet has overcome the time limitation so that quality content can continuously produce value. In the mass media period, all media were a kind of diachronic record, whereas the internet is synchronic media. All content can be permanently stored on the server, which means that quality content can continue to produce value.

The internet has also broken the space-time restrictions of the mass media, allowing content supply to run indefinitely. From unlimited supply to personalized needs, there is a key problem to be solved, which is how to achieve the distribution of personalized content.

To this end, the emergence of a smart recommendation engine such as Toutiao not only avoids the “outburst risk of barrier lakes” brought by unlimited data, satisfying the demand for personalized consumption, but also solves commercialization difficulties, allowing content producers to focus more on producing high-quality content.

Also, as the internet moves from offering users information in general to providing small-scale, personalized service, a new market emerges, creating an unprecedented opportunity for content entrepreneurs.

 

Smart technology
Before the advent of the internet, the industrial chain of each industry was obscured by the complexities of social reality and such a chain is difficult to learn or  coordinate and control on a macro level. In order to reduce the risk caused by a poorly functioning industrial chain, some enterprises have endeavored to construct and manage the whole industry chain through the capitalization and collectivization, pushing production into a closed, centralized and monopolized state. However, this model is by no means suitable for all industries, because it will somewhat reduce the vitality of business.

The internet, as convenient as it is, enhances the visibility of the industry chain, reduces the difficulty and risks of participation, and promotes open, democratic and coordinated production, increasing the inclusiveness and innovation capacity of the whole industry.

For example, some platform websites in the content industry, such as apaipian.com, have broken down the content production process, making the entire industrial chain transparent. This enables content producers to enhance quality control, thus reducing the risk of a malfunction in the industrial chain.

In the meantime, the internet has made possible the standardization, modularization and intellectualization of some production sections with the aid of various auxiliary tools such as Meitu, which not only lowers the threshold for content producers and cuts the cost of content production but also shortens the production cycle and improves productivity.

 

Business models
The business model is the basis for a company’s survival in the market. Under the current market economy framework, each type of business model has a certain market share, which also establishes the boundary of development within the industry. If a company wishes to break through the ceiling of its original market size, it has to reform its business model. Since the arrival of the internet, these reforms have progressed in three stages.

First of all, the internet companies relied on the mass media business model to make structural adjustment in the stock market based on their technical advantages in order to capture a greater share of the mass media market. This kind of structural adjustment did not expand the incremental market. It only somewhat optimized the stock market structure. As more users flock to the internet, the breathing room for traditional media narrows, even leading to the bankruptcy of some market-oriented mass media outlets.

Second, on the basis of the existing business model, internet technology has started to develop a long-tail incremental market. The internet has created demand among enterprises and users for long-tail products by such means as providing an easy and cost-effective way for a large number of small and medium-sized enterprises to advertise. As a result, the long-tail market expands the original market size of the content industry.

Lastly, the internet has spawned a variety of business models for the content production industry, such as unilateralism, bilateralism, multilateralism and other business models. In particular, the introduction of the multilateral business model has not only granted the content a richer social significance but also further enlarged the market of the content production industry.

Content entrepreneurship originated in the wired internet period, and boomed in the mobile internet era. If we agree that in these two periods, the content production industry has grown increasingly independent, then we should know that the industry is poised to grow in the future with the advent of augmented, virtual and mediated reality. In today’s world, all internet products are in the form of content, leaving huge room of imagination to the content production industry.

Though it is said that the internet has created a golden age for content production entrepreneurship, there are many risky factors, especially the restriction of institutions. The current management system of the industry is built on the technological and industrial characteristics of the mass media and the prerequisite is that the mass media is a one-way controllable transmission platform for the public.

However, the internet stresses more on personalization, collaboration and massive data, making the original management concept, method and tools obsolete. Therefore, in this transitional period, content entrepreneurship faces potential institutional risks, which may as well be the biggest risk of the industry at the moment.

 

Wang Chengwen is from the School of Journalism and Communication at Renmin University of China.