The price of knowledge

The days when Chinese refused to pay for anything they downloaded from the internet may be over; now they'll shell out for 'good stuff'

When the pioneering US file-sharing software Napster was forced off the internet 16 years ago amid allegations that its users were essentially stealing music, the internet in China was just getting into full swing.

In the years that have followed, Chinese internet users have become freeloaders par excellence, used to downloading music, films and books free of charge, even as their counterparts in the West have become increasingly accustomed to the idea that, in cyberspace, someone ultimately has to pay for content.

Now, Chinese are not only waking up to that idea, but are also showing themselves willing to fork over large sums for information products that the knowledge economy is serving up. This means that many of those who come up with the right kind of internet content can turn them into highly profitable cash cows.

One of these is Li Xiaolai of Beijing, an angel investor who publishes a weekly financial newsletter called The Road to Financial Freedom, for which he charges 199 yuan ($29; 26 euros; ￡23) a year through the mobile app Dedao.

By May 3, the business consultant had more than 150,000 subscribers to his service, which he began publishing in July last year, bringing in revenue of 30 million yuan.

Dedao, which aggregates information services, offers 24 other newsletters on subjects including business, science, books and technology at a similar price.

Luo Yonghao, of Beijing, founder and chief executive of the smartphone company Smartisan, has more than 30,000 subscribers on the app for his articles on how to make a startup company successful, each paying 199 yuan for an annual subscription.

Zhang Xiaoyu, also from Beijing, a former analyst with Goldman Sachs, set up a newsletter with the same price that provides histories of big international companies, and within a month he had more than 8,000 paying readers.

Luo Zhenyu, of Beijing, the creator of Dedao - Chinese for "to get it", implying that those who use the app will get the knowledge they need to keep a breast of the times - used to be a television producer.

In 2012, Luo started an online talk show, Logical Thinking, recommending good books each day, and says it now has more than 10 million followers. It was free of charge.

Last year, drawing on his experience of the past few years, he published a book titled Information Overload-I Know How You Feel.

"We need to change the way we think if we are to keep up with these ever-changing times," Luo says in the preface. "Change can be hard; it pushes us to learn continuously, to understand new things, but it is only in change that we can see the future."

The app is Luo's way of providing people with the knowledge to cope with change.

It offers written articles, podcasts, e-books and live talks.

But unlike other educational apps whose content is mostly free, almost every product carried on Dedao has a price.

GetAbstract, a Swiss company, was a pioneer in the West in cashing in on the knowledge economy and using the internet to promote it.

GetAbstract, founded in 1999, provides an e-library of about 15,000 condensed business book summaries mainly to big companies such as Boeing, Deutsche Bank and IBM to help their staff keep abreast of current knowledge.

In April, the company formed a partnership with Dedao in which summaries of foreign books are made available in audio form in Mandarin in the app.

"We always believe that good content is worth something," says the co-founder, Patrick Brigger. "You have to pay for quality content ... and this trend is even stronger than it was 20 years ago."

Brigger says there is so much information on the internet, but a lot of it is mediocre, and his company tries to solve that problem by sifting through, selecting and curating good content.

He compares GetAbtract's product to the papyrus scrolls in the old Library of Alexandria in Egypt, where every scroll had a brief summary at the top.

"That's our vision-anything with good content should have a summary so people can decide if it is the text they want to read," Brigger says.

"It saves time, and when the price is reasonable people are willing to pay for it."

The company has sold more than 12 million licenses for individuals and corporate entities, he says.

It will soon begin publishing Inside China, which will provide English-language summaries of reports originally published in Mandarin.

Rena Xie, a Chinese-American freelance translator and writer, has been working on the project since February.

Xie scours through mountains of Chinese news reports and industry analyses everyday, boiling them down into summaries of around 500 words.

Topics she covers are mostly current business trends in China, such as the real estate market, the franchise of entertainment products and mobile payments.

"A lot of the information in Western media is dumbed down for the reader to understand," Xie says.

She wants to present foreign readers short but to-the-point information with an authentic "Chineseness".

Speaking of the fledgling business of paid content in China, Xie is optimistic about apps like Dedao.

"It is getting people into the habit of respecting quality stuff and paying for it," she says.

The people who pay for Dedao or GetAbstract generally have a business orientation, and there are also people who pay for cultural content, she says.

Paid service

The Beijing internet company Douban, known to Chinese as a website of user-generated reviews of books, movies andmusic, launched a paid content section called Douban Time in March.

It invited 17 contemporary poets to give talks on poetry on its mobile app.

The poets are all well-known, including Beidao, Xichuan, and Ouyang Jianghe.

An audio podcast called A Poetry Class with Beidao and Friends costs 128 yuan, which gives the subscriber 102 episodes with about 51 poems, some Chinese and some foreign.

"Over the years, we have gathered a very large and loyal user base who like books, music and movies," says Yao Wentan, vice-president of the company.

"Many of them are willing to pay for good stuff, and what we do is to serve them with the right content."

Subscriptions to the poetry class are said to have exceeded 1 million in a week after it was launched in March, and since then Douban Time section has opened four other classes.

Yao says the section is called Douban Time because, by providing high-quality content, the section can help users save time, and she hopes users can spend more time on those refined cultural products.

One of the latest classes is about cult movies, curated by a team of 12 scholars led by Chang Jiang, an associate professor of communication studies at Tsinghua University.

Chang is a film aficionado and has been a film and TV critic for several years.

The class gives in-depth analysis of the cultural phenomenon of cult movies, such as A Clockwork Orange (1971) and Pulp Fiction (1994).

"I'm doing this more as a cultural scientist than a film lover or communications scholar," Chang says of the choice of the class topic.

"I want to create something that is both interesting and meaningful to people."

This is also his first venture with the knowledge economy, and sales have been good, according to Douban's public relations, but details were not provided.

It is fashionable to talk about the knowledge economy at the moment, Chang says, but content producers have to tread carefully and respectfully, working in a professional way.

"The knowledge economy is very different from other types of economy. You can't just make up knowledge, throw a price tag on it and then market it."

Paid content does not run counter to the idea of the free spirit of the internet, he says.

Since people are more than willing to pay for a can of Coca-Cola made by industrial machinery, they should not begrudge having to pay for professional knowledge created and made available thanks to human effort.

"Knowledge is priceless, but never free. Paying for knowledge is the future, no matter whether it is in China or elsewhere."

xingyi@chinadaily.com.cn