Growing but Losing Money -- Online Newspapers on a Bumpy Road to Replace the Print Press

Abstract:It has been predicted that the print press would be replaced by onlinenewspapers with the rapid development of digital network technologies andthe growth of the "Internet generation." The print press has indeeddeclined, but the dominance of online newspapers is yet to be established. Using the online newspaper industry in China as a case, this study aims toexplore (1) the social, political, economic and cultural factors that affectthe development of online newspapers; and (2) operation of these onlinenewspapers. Specifically, it addresses the following questions:a) What are the major social, political, economic and cultural factors thatfacilitate or hinder the development of online newspapers?b) How do online newspapers operate in terms of finances, manpower,structure, management, newsroom setup, and the solicitation and display ofadvertisements?c) What are the prominent features of the content of online newspapers?d) What are the dominant business models and their advantages anddisadvantages?It has developed two conceptual frameworks for the exploration: amacro-level framework of social ecology of technology and a micro-levelframework of virtual community. A combination of three methods were used inthis study: document analysis, indepth interviews, and case studies.The findings show that the development of China’s online newspapers hasbeen handicapped by several social/economic factors. The controls imposedby the government out of political reasons, lack of effective laws andregulations in monitoring copyright violations on the Internet, thecompetition from mega news portals, and the lack of solid business modelshave all adversely affected the development of the online newspaper industryin the country. Since 1994, online newspapers in China have witnessed anoticeable development, with almost all the 1937 newspapers in the countrylaunching online versions, ranging from static "online duplications" to"quasi-interactive media" and "virtual communities." However, the majorityof them are still struggling for both readership and a profit and trying tofigure out how to break the shackles as lower-stream suppliers of freecontent to such mega news portals as Sina.com, QQ.com, and Sohu.com. Somehave struck new alliances with the mega portals, and other have venturedinto the fields of multimedia and mobile information provision. Only ahandful of them have established sound business models and strategies andposed themselves for a promising path.The contributions of this study lie in that: (1) its comprehensive andsystematic overview of the development of China’s online newspapers; and(2) the development of two conceptual models for macro- and micro-analysisof online newspapers, which could also be applied in future studies ofonline publications in other countries or different social environments.