Popular Chinese news app 'Today's Headlines' investigated over copyright controversy

State watchdog investigation casts doubt on future of popular news aggregation app, valued at US$500 million.

PUBLISHED : Monday, 23 June, 2014, 1:35pm
UPDATED : Tuesday, 24 June, 2014, 9:08pm

China’s copyright watchdog is investigating 'Today’s Headlines', a popular mobile news app, for potential copyright infringement as traditional news organisations struggle to compete with aggregators.

Yu Cike, the director of China’s National Copyright Administration’s division for copyright management, said the regulator had received numerous complaints by unnamed traditional media outlets over the aggregator’s republishing of their news articles.

The investigation comes at the beginning of a joint campaign by the copyright watchdog, the Ministry of Public Security, the Ministry of Industry and Information Technology and the State Council Information Office into online copyright infringement dubbed “Operation Swordnet”.

Yu’s remarks were carried in Monday’s edition of the People’s Daily, the Communist Party’s mouthpiece paper whose website design hasn't changed in years.

Today’s Headlines, China’s No 3 most downloaded news app in May, aggregates news from major newspapers across the nation and curates the news articles according to readers’ interests on its phone and tablet platforms. It is owned by Beijing-based Beijing Byte Dance Telecommunications, which also has a news aggregating website and a Weibo account with 1.8 million followers.

Byte Dance could not be reached on the phone for comment.

The app and its maker became the talk of China's media and Internet industries when Byte Dance announced early this month that Today's Headlines had landed US$100 million in a third round of venture capital funding from Sequoia Capital, which put the app's latest valuation at about US$500 million.   

Many in the media industry argue that by providing an alternative, curated platform for news articles, aggregation apps deprive traditional media outlets of page views and thus advertising revenue. In a small survey of 32 media professionals and scholars conducted by the Southern Weekly newspaper in early June, 81.2 per cent said they consumed their news from aggregators such as Today’s Headlines, with none saying they habitually then also clicked on the link to the original content creator.

The Beijing News, one of China’s most prestigious newspapers, accused the app of stealing content in an editorial in early June. Replying to these allegations of copyright infringement in an interview in Southern Weekly, Byte Dance co-founder Zhang Yining was defiant. “Our industry model doesn’t need copyright,” he reportedly said.

In another statement responding to accusations of copyright infringement two weeks ago, Byte Dance said it had struck content sharing deals with an increasing number of news organisations and had asked other media outlets to reach out to make similar agreements. The company also invited individual bloggers to share their content, the statement read.

The Today’s Headlines app recorded the fastest growth in downloads among news applications in the first quarter of this year, according to research by China Information Technology, with downloads increasing 89.8 per cent between January and the end of March. More than 845,000 people downloaded it every day over the first three months of the year. The app had 120 million registered users and 40 million active monthly users at the end of May, according to NetEase.

The Guangzhou Daily retracted a lawsuit against Today’s Headlines for copyright infringement last week, according to China Business Journal. Instead, the newspaper struck a content-sharing agreement with Byte Dance. “One plus one is more than two,” Wu Yongqiang, a press official with the All-China Youth Federation, was quoted as saying, reacting to the decision.