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    May 17, 2018, 10:20 a.m.
    Reporting & Production

    Is there a big enough global audience interested in China to sustain the South China Morning Post’s ambitious new sites?

    With its new verticals Abacus and Inkstone and another on the way, the century-old newspaper is trying to use Alibaba money to build products that both reach a global audience and feel mobile-native.

    If you concocted news sites in a lab for maximum hipness, high polish, and most evocative noun names, you’d get and .

    These separate verticals — new offshoots of the Alibaba-owned , the storied English-language newspaper covering China, based in Hong Kong — are highly designed, efficiently product-managed, and precisely targeted at the types of topics meticulous consumer surveys have determined are what news readers want more coverage on, but which few existing news sites cover satisfactorily.

    Abacus covers tech in China broadly, and Inkstone is a daily digest on Chinese life and politics, with an eye towards explaining China for people who might just be glancingly interested in the country or newly aware of its influence in global politics. A third site, name undisclosed and launching sometime in June, will focus on food and travel.

    These new verticals will be workhorses in trying to fulfill SCMP’s goal of becoming a news organization not only for the China-interested, but also for the “globally curious.” They serve as sites of experimentation, both in product and editorial voice, and push the SCMP in front of readers who aren’t part of its traditional readership — business professionals, academics, diplomats, and anyone requiring more granular knowledge of China.

    “We’re going from a city like Hong Kong to becoming a globally relevant news organization that is reporting on China in all of its complexity and with all its growing reporting restrictions, while having this still-developing audience. There’s not an existing critical mass of people that’s raised both hands saying: Hey, hey, hey, I need way more China content,” SCMP’s CEO , who joined SCMP as CEO in January 2017 from a previous role as CEO of Digg, told me. “The demographics of our core readership are still not extremely diverse. But increasingly, because of our commitment to distributed media models, we are seeing younger populations that are globally curious, who do not fit into the diplomats-academics-business elite, who are at least accessing our content when we are discussing China’s rising impact on the world.”

    What is the deal with Chinese news media and western news organizations that cover China?

    — China’s really good at censoring critical voices online. There are some clear patterns. This is a tool that tracks what gets taken down from Chinese app WeChat and microblogging service Weibo.

    — China’s state news agency is going to build a “new kind of newsroom based on information technology and featuring human-machine collaboration.”

    — Subscription tech outlet The Information took subscribers on a trip to China, promising special access to certain people.

    — The Economist’s Global Business Review was its first non-English-language paid product.

    The organization has hired about 80 new people in the past year, bringing its total newsroom to 350 people. A significant proportion of that new staff is working on those global-audience-extending digital initiatives; the splashy new verticals Abacus and Inkstone now have about eight people each dedicated to editorial — many from established Western media like the BBC and The New York Times — and a similar number focusing on product management, design, and engineering for the sites. Since they’re starting from scratch and targeting new readers, the sites can draw from SCMP’s reporting and being developed for the entire company. But they’re meant to stand alone: “We’re building new brands, not just editorial products,” Liu said. “We’re taking a portfolio approach, similar to how Vox [Media] continues to grow.”

    “We’re a little startup when we need to be, and part of a huge company when we need to be,” said , executive producer for Abacus, who came to SCMP from CNN.

    Liu and many of the new SCMP staff speak the language of product management fluently, and have held SCMP’s narrative of and closer to heart. On the tech side, it’s been putting time into work such as developing tools for improving content recommendation and personalizing stories to different markets — details forthcoming. On the audience growth side, it’s eyeing the U.S. and Southeast Asia in particular — and not just the Chinese diaspora.

    “We think about audience growth in phases,” Liu said. “Phase 1 of market entry into the U.S., and even more so in Southeast Asia, is people who already understand China is important and are likely already searching for China content. These are the folks reading The New York Times for their China coverage, these are the folks reading The Economist, The Wall Street Journal. In Southeast Asia, they’re reading their local newspapers, the Philippine Inquirer, or The Star in Malaysia, The Straits Times.” The second phase, “which will be the more important phase for us,” is trying to pick up people more casually interested in China through its new topic sites.

    Abacus — which has already undergone a few design changes in a few months — covers Chinese tech and will build up an extensive gadget reviews section.

    “There are really great sites like TechCrunch, sites that already cover the VC side of tech, the funding side of tech, and they do that well. But we hadn’t seen anyone focused solely on China consumer tech and electronics. There’s everybody, but also nobody. You have The Verge, Engadget, Gizmodo. All those guys are in the space, none of those are focused exclusively on the space,” Hiranand said. (Other digital startups like All Tech Asia and Tech Wire Asia cover sort of similar ground, without the added focus on product reviews.) “The bounds of coverage for Abacus are changing all the time. To define them by what we will or won’t cover does everyone a disservice.”

    Abacus is less concerned with pure funding stories, Hiranand said, pointing to its explainer-y coverage of Xiaomi going public. It’s ventured into entertainment ( ) and science ().

    “On the question of product–market fit, if we serve our mission correctly, first we want to lead this space when it comes to China, in the market of people interested in China tech, who could be interested in China tech or should be interested. That’s our goal, to be able to reach that audience,” , head of product for Abacus, who also manages product at SCMP, said. “There’s a little bit of audience overlap with SCMP right now, because a segment of that is interested in China tech. But SCMP is an almost 115-year-old brand out of Hong Kong. A lot of new Abacus readers are coming from the U.S., from Silicon Valley, San Francisco, Los Angeles, New York.”

    Inkstone puts out six stories on China each day, currently around half of which build on existing SCMP reporting, on a site with lots of bells and whistles: For instance, there’s a countdown to the next daily brief and a meter that tells readers how many of the six stories they’ve completed. The team makes videos; its editors also write a daily newsletter.

    “The market is very crowded. And I don’t mean crowded in terms of there being another mobile-first, China-focused news product similar to ours. There are really great existing publications out there that do China coverage, and we’re building Inkstone from scratch. Not to mention, we don’t have a physical presence in the U.S.,” , Inkstone’s senior editor, who joined SCMP from BBC News in November. At that time, a design prototype and loose editorial concept already existed (it’s even patenting a for presenting two contrasting opinion pieces on a single Inkstone page, a format that’s also being adopted over at SCMP.com). It staffed up extremely quickly; most of the Inkstone team officially started working at SCMP the day it launched. “You have a lot of specialists who read SCMP, at least in America, so my feeling was Inkstone needed to be mass in appeal. We decided we would cover everything.”

    SCMP’s global ambitions kicked off in 2016, after Chinese e-commerce and technology giant Alibaba purchased SCMP Group for an estimated , announcing an intention to offer a “” and to portray China in a , as well as to invest heavily in the paper by adding staff and building new digital products and technologies. For SCMP, concerns of a blunted news outlet promoting China’s interests . (Jeff Bezos’s purchase of The Washington Post is occasionally mentioned in the same breath as Alibaba’s, but the starting point of each paper, and their ownership structures, are different.)

    SCMP.com’s paywall went away as soon as the Alibaba deal closed in April 2016, and the site saw a brief bump in readership. But “without new products, after a couple of months, the traffic dropped back to just slightly greater than what it used to be” with the paywall, according to CEO Liu. Its audience makeup, however, had been shifting dramatically away from Hong Kong and the mainland (where SCMP.com ), from about 60 percent outside of Hong Kong to 80 percent. Readers from the U.S. don’t add up to the majority of non-Hong Kong readers, but the U.S. is the “single largest country” monthly traffic-wise. Traffic from all the Southeast Asian countries together makes up a similar amount. For SCMP.com, Google search is the leading referral source (18 percent), followed by direct traffic (16 percent), with about 5 percent from Facebook (these numbers include visitors from paid advertisements), according to a spokesperson. SCMP says its flagship print daily has a circulation of about 100,000 and its main site generates about 10 million monthly unique visitors.

    Both teams declined to share any reader numbers or audience targets. SCMP wouldn’t share specific revenue figures, but the organization as a whole isn’t profitable, The New York Times . So far, Alibaba leadership have expressed behind growing the organization, allowing for a “” of as long as 10 years, with the first three of those focused on building new products and the following two on finding revenue models to support it.

    “This is a few more years down the road, but of course we have to figure out a sustainable business model around our product, and it’s certainly going to be multiple different revenue channels,” Ong said. “We’ll experiment with ads, subscription, and a multitude of other revenue channels, and we have no set plan as to which one of those channels will come first.”

    “We’ve always designed these products with ad placements already in mind. But we’re in no rush to monetize,” SCMP CEO Liu said. “I expect that the ad-financed free products you see today will continue to exist, but there’s definitely opportunity to build other products, other services, other experiences, that are not free and ad-supported. We believe subscription products will be part of our future, but right now we have the luxury of growing reach, engagement, and impact, and that’s what we’re doing.”

    POSTED     May 17, 2018, 10:20 a.m.
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