News portals grow on government support
State-run news portals on the mainland are in no better position when it comes to showing a profit than the money-losing Internet providers, but that hasn't stopped the authorities from building more to promote the government's agenda.
Apart from the high-profile national news portals such as Xinhua.org and Chinadaily.com.cn, Chinese provinces and cities are being urged to set up their own news portals. At least a dozen have been set up in the past year or so, including Eastday.com in Shanghai and Enorth.com.cn in the northern city of Tianjin.
Chinese authorities get local state run television and radio stations and newspapers to pool resources to set up joint news portals to break what the authorities call 'the Internet stranglehold' and to promote the government's agenda.
To provide relief from the financial burden these portals could face, the State Council's Information Office has pressured China Telecom to offer 50 per cent bandwidth discounts to 12 state-run news providers. Beijing Morning Post says that this will save them 43 million yuan (US$5.11 million). China Telecom has promised to extend the offer to eight more state portals in future.
The authorities also organised a workshop last week at which representatives from the state-run ICPs discussed their operations and what the future will hold for them.
Zhang Wei, secretary of the board of directors of Eastday.com, told SCMP.com the offer would save his company about two to five million yuan, although the deal with China Telecom hasn't been finalised. Mr Zhang says their revenues mainly come from advertising and helping mainland enterprises build websites and that is not enough to cover Eastday.com's 30 million yuan in annual costs. Radio and television stations and newspapers in Shanghai provided Eastday.com with 600 million yuan when it was launched one year earlier.
But Enorth.com.cn in Tianjin does not have the same strong local backing and geographical benefits that Eastday.com has. And it only had 30 million yuan to set up the website last December. 'We have a very tight budget, so we must make every penny work and we're looking for other businesses to make money,' said Mr Wang Yi, Enorth.com's general manager. He told SCMP.com that Enorth.com.cn has few advertising revenues, and they design Web sites and provide content to broadband networks.
Mr Wang says he is thinking of looking for investment from the private sector but that he isn't sure about government policies. 'We can always manage to find a way because we can spin off a unit for the joint venture as long as we maintain control of editorial content,' he added. ICPs don't make much money from content anyway.
'But that is what we must do as a state-run news provider even if we know we are losing money,' according to Eastday.com's Mr Zhang. He says they are still waiting to see what to do next because government policies are still unclear about what Internet content providers can do.
Mr Zhang says he'd like to see a number of government-backed ICPs form a merger to share resources and save money, although it might be difficult. 'Supporting an Internet news portal in each province or city is very expensive', he says.
But Enorth.com.cn's Mr Wang says that that's just the price you pay for learning the new technology, and he doesn't mind merging with someone. It has to happen anyway, he says.