With the wide application of new technologies such as artificial intelligence and big data, and the rapid rise of new models such as full-screen ecology, fan economy and knowledge payment, the integration of Internet and content industry is deepening, and a creative communication development model different from the traditional content industry is gradually developed, forming a new format of Internet content industry. According to the difference of carriers, it can be roughly divided into three categories: text, audio and video, and can be derived from many sub-sectors such as online news, online literature, online music, online video and online live broadcast.
The scale of users has continued to grow, and the number of users in the sinking market has accelerated. With the promotion of speed-up and fee reduction of the Internet and the promotion of smart phone terminals, the number of netizens (especially mobile netizens) in China has risen rapidly. According to statistics from CNNIC, by the end of June 2019, the number of netizens in China had reached 854 million, including 847 million mobile netizens, with a population penetration rate of over 60%. A large number of China netizens and convenient and low-cost Internet access services have laid a solid foundation for the prosperity and development of the Internet content industry. In terms of the number of users, by the end of June 2019, the number of users of online news, online literature, online music, online video and online live broadcast in China had reached 686 million, 455 million, 608 million, 759 million and 433 million respectively, up by 1.7%, 5.2%, 5.6% and 4.7% respectively compared with the end of 2018. From the perspective of industry layout, the penetration rate of online news and online video users reached 80.3% and 88.9% respectively. Users in first-and second-tier cities have basically been divided up by leading enterprises, and there is limited room for users to increase. Some enterprises aiming at sinking into the market have achieved rapid growth. For example, in the first quarter of 2019, the number of installed users exceeded 400 million, and the number of monthly active users reached 110 million, of which users from third-tier cities and below accounted for more than 70%.
The threshold of content production is lowered, and the social attributes of the industry are highlighted. With the improvement and development of online content creation tools and content sharing platforms, the cost and threshold of content creation are further reduced, and a large number of potential creators are activated to actively rely on their own resources to output information. Users are no longer passive consumers of information, but become deep participants in content creation. In-depth interactive modes such as graphic community and short video community are rapidly emerging. The Internet content industry has gradually evolved from the early interaction between people and works to the interaction between people, and the social attributes of content are increasingly strengthened. Short video platforms such as Tik Tok have quickly accumulated a large number of users by reducing the difficulty of video production, building various shooting modes and guiding users to participate in hot topics, and become emerging traffic portals.
Information flow becomes the mainstream of push, and content quality becomes the focus of competition. Information flow refers to the display of continuous customized content in one screen interface, which is characterized by strong personalization and high information density. It is easy to operate and can provide effective content quickly, which is conducive to arousing users’ emotions and prolonging their use time. It has gradually become the main information push means for today’s headlines, Tik Tok, Zhihu and other apps. With the wide application of information flow, users are always pushing high-frequency and high-intensity content, and a large number of redundant and low-quality content is piled up. The information flow mode itself can provide very limited users and the growth of usage time, and the pushed content itself is the key. Some platforms strongly encourage originality and actively introduce high-quality content teams, which greatly improve the stability and professionalism of content output, such as the development of high-quality big V in Zhihu and the active introduction of official institutions in Tik Tok. Some platforms aim at segmentation and create a vertical content ecology, such as Kung Fu Finance, which focuses on financial information, Daily Cooking, which focuses on family food, and Little Red Lip, which is a short video application for beauty. Some platforms actively develop self-made content to attract users, such as iQiyi’s self-made variety idol trainees, self-made costume drama Story of Yanxi Palace, Tencent’s video self-made variety creation 101, and the audio of listening to books.
The protection of intellectual property rights has increased, and the content payment model has emerged. In recent years, China has strengthened the protection of intellectual property rights, and launched the "Sword Network Action" for online infringement and piracy for many years. The copyright awareness of the whole society has risen, and users’ awareness of paying for high-quality content and services has become increasingly strong. With the emergence of a large number of professional and differentiated high-quality content, content payment has risen rapidly, becoming an important mode of content platform development after advertising and e-commerce. In 2018, the market size of online copyright industry in China reached 742.3 billion yuan, up 16.6% year-on-year, of which the amount paid by users was close to 368.6 billion yuan, up 15.8% year-on-year. Content payment methods mainly include paying for quality works and paying for quality services. Paying for high-quality works mainly includes buying e-books, audio, video courses, online movies and other works, as well as rewarding articles, online questions and answers and other forms; Paying for quality service mainly includes purchasing members.
The development of China’s Internet content industry presents the following trends:
Supervision is becoming more and more perfect, and the industry is moving towards compliance. Problems in the development of Internet content industry are gradually exposed. For example, creators produce vulgar content that violates public order and good customs in order to attract attention, content platforms fail to review and openly disseminate bad information, and infringement methods such as piracy, plagiarism and manuscript washing emerge one after another, personal information protection is ineffective, and unfair competition behaviors such as traffic hijacking and blocking opponents of giant enterprises appear. With the strengthening of supervision, the compliance process of content review, copyright protection, personal information protection and standardized competition is accelerated, and the Internet content industry will gradually break away from barbaric growth and enter healthy operation.
Users and traffic are concentrated in the head, and Matthew effect is prominent. After the rise of modes such as supporting content creation live broadcast and short video, a large number of new content poured in, subverting the original user traffic gathering center and decentralizing content production. However, with the maturity of the new model, enterprises with early layout and rapid development have formed new centers by virtue of user base, capital strength and industrial chain layout ability, gathered a large number of high-quality IP and KOL, purchased and made a large number of high-quality content, and became head enterprises, harvesting most users and traffic until the new model brought subversion.
Continue technological and business innovation and actively explore new markets. The innovation in the field of Internet content is active and iterative, and there are four possible innovation directions in the future: First, the user groups with low willingness to pay are activated through innovation through communication channels, such as social fission. The second is to enhance user value through innovation in operation mode, and to further integrate information flow and content realization. The third is to directly attack the pain points of users through model innovation and lock in the blank product and service market to gain new opportunities. The fourth is to bring about changes in content carriers and communication modes through the application of new technologies, such as VR/AR, interactive drama series and so on, which may achieve development in the 5G era.
The Internet content industry is still in the process of rapid development, and new technologies, new models and new formats continue to emerge. In the process of promoting industrial compliance and upgrading, industry supervision plays an important role as a guide, and it is necessary to balance the relationship between strengthening supervision and encouraging innovation. On the one hand, in the process of promoting industrial prosperity, it is necessary to draw a clear line, constantly improve the laws and regulations on property rights protection, information protection and content review, strengthen supervision after the event, and create a good development environment. On the other hand, in the process of promoting industrial compliance, it is necessary to maintain the consistency and stability of policies, not to engage in one-size-fits-all and cliff-like management, to smooth communication channels with enterprises, creators and consumers, and to reduce the risk of industrial innovation. (Author: Xie Songyan, Institute of Policy and Economics, China Institute of Information and Communication)