Having always relied on government funding, State-run news websites are now being urged by the authorities to become financially independent. But how will these websites strike a balance between adhering to the Party line and making profits?
By Chen Dongyi and Zhou Hao
All news organizations in China are owned by the State. Traditionally, many government-run organizations haven’t had to face the challenge of turning a profit because their funding is largely underwritten by central or local governments. However, times are changing. After years of commercialization leding to the success of privately-controlled media, the State is now calling for officially run digital media organizations to become financially independent. News websites such as xinhuanet.com and people.com are two notable examples.
The reform is deemed justified by the fact that thousands of Party-owned media organizations across the country devour huge amounts of funding from State coffers. Moreover, the decades-long practice of State funding has made these news organizations less competitive and appealing compared with other domestic portals such as sina.com.
At the forefront of the ongoing reform campaign is the task of making key news websites go public on the stock market, including xinhuanet.com and people.com, respectively controlled by the State media Xinhua News Agency and the People’s Daily newspaper.
Holding the Party Line
More than a decade ago, a few media companies such as Chengdu B-ray Media Co Ltd started to float shares on the stock market. Only assets such as advertising, distribution and circulation were listed, while editorial remained firmly in the hands of the authorities. The arrangement was made out of considerations aimed at safeguarding the “political correctness” of news and broadcasting, but the restriction also dented investor confidence in the media sector. According to sources from xinhuanet.com, reportedly the first website to be approved by the Publicity Department of the Central Committee of the Chinese Communist Party to float A-shares, the website is likely to get listed as a whole, meaning both its operational and editorial arms. Tsinghua Media Survey Lab Director Zhao Shuguang noted, “If editorial can be opened to market capital, it will be a breakthrough for China’s media sector.”
“The listing of xinhuanet.com is very likely to follow the previous integrated listing mode of privately owned portal websites such as sohu.com and sina.com,” Zhao continued. “It is clear that the authorities are hoping to break the bottleneck in the reform of the country’s culture sector [press and publication areas included].”
While capital from diverse sources is expected to be introduced into what was classified a “politically sensitive” industry, relevant regulations were hammered out to strike a balance between political correctness and commercial operation.