Academic journal article Global Media Journal

A Study on the Profit Model of We Media in China

Academic journal article Global Media Journal

A Study on the Profit Model of We Media in China

Article excerpt

Introduction

The development of information and communication technologies (ICTs) is very remarkable around the world, especially in mainland of China. Based on the latest technology, many new types of media have been created rapidly, which have taken place the role and status of traditional media to many degrees. According to the annual report of China Internet Network Information Center [1], the total number of internet users in China reached 0.731 billion people and more than 0.695 billion people use the mobile phone to connect to the internet. The world's largest net users' group is the solid foundation for the improvement of those new types of media, especially We media in China. There were more than 12,000 thousand Wechat official accounts by the end of 2016 and some people predict this number might grow to 14,150 thousand by the end of 2017 [2]. These official accounts of Wechat are created by government, media, enterprises and ordinary people, which are the main actor in creating official accounts. So Wechat official media can be regarded as the typical We media in China. Besides Wechat official accounts, other types of We media have also experienced the rapid increase on other platforms, such as Baidu, Today Toutiao (www. toutiao. com), Tencent and so on. As time goes by, the function and attribute of We media have changed significantly, specifically, people's main aim of creating and managing their own We media is not only for disseminating information but for making money. Managing We media becomes a way of starting a business for many people. For example, "Luoji Thinking", an internet knowledge-based talk show, develops a diversified business model on different internet platforms, including Youku, Wechat and so on. What should be emphasized here is that this We media created an official account in Wechat and the number of fans had reached more than six million that exceeds many Wechat official accounts set by big traditional media organizations and government's departments in 2016 (Tencent Technology, 2016). This We media had completed B round financing in 2015 and valued at 1.32 billion yuan (Sina News, 2015). So Luoji Thinking becomes one of the most successful We media in China in recent years.

Witnessing the rapid development of We media and its bright prospects, many enterprises and venture capitals have been investing and even acquiring We media. For instance, China Media Capital announced a plan to invest 0.1 billion yuan to "Wall Street Horizon", a financial We media. Alibaba Group also announced a plan to invest "Day Day Cook", which is an APP providing information about cooking and latest fashion. Meisheng Culture acquired "Tongdao Uncle" by 0.21 billion yuan (The New List, 2017). Besides these investments and acquisitions, there was another investment that attracted great attention. Luoji Thinking connected with other venture capitals to invest "Papi Girl", which is a fast-rising internet funny talk show. After this investment, Papi Girl was valued at 300 million yuan (Tencent Technology). According to these cases, it is easy to find that We media with a large number of fans and bright prospects have been favored by enterprises and venture capitals. There is no doubt that, the main aim of enterprises' and venture capitals' investment or acquisitions of We media is making money or so-called increasing profits. At such background, whether We media can create the profit model that brings lasting and steady benefits becomes one of the most important elements for its future development.

According to the statement above, this study aims to make it clear that the profit model and its function of We media in China. A suitable profit model is one of the decision-elements for We media, either its ability to make profit or its sustainable development. According to the wave of investing We media from enterprises and venture capitals, it seems that We media in China have set up the suitable profit model so its profit expectation is wonderful. …

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