On March 30, People Daily Online and SUMG (Shanghai United Media Group) signed a contract to launch a new media project “Wuli” targeting young generation. It’s never new that traditional media try to embrace the trend in the digital era, but it’s kind of awkward in this case considering the political property of People Daily as the voice of PRC, featured by its serious tones and values.
SUMG, on the other hand, is the monopolist of the mass media in Shanghai, which owns all the giant players including Jiefang, Xinmin and Wenhui newspress. At the same time, SUMG is also an active explorer into media transformation, and has successfully operated several news websites or Apps in recent years, such as Jiemian and The Paper.
Birth of Wuli
Traditional media is struggling to find a way out in the Internet world. In this transition period, technology is a fundamental enabler to achieve paperless and on-demand consumption, while consumers are the ultimate factor that drive old media to make a change.
Furthermore, the young generation is an important customer segment for lots of brands, not limited to media companies. It may be mainly because of their ability of consumption and purchasing (sometimes it comes from their parents, who have almost accomplished the stage of wealth accumulation), which will finally turn to be economic benefits for corporations.
In this case, it’s understandable that People Daily is finding a way to approach the young generation, and to attain young users to balance its user base that is mainly composed of elder people. The cooperation with SUMG may have taken some political factors into consideration. But narrowed down to the operational level, SUMG has good performance and experience in managing news Apps, as well as talented labors that are able to accommodate to needs from both user side and government side. Moreover, with SUMG, it will be more natural for People Daily to enter the young market, weakening its political property.
Consumer media or mass media?
Although supported by experienced content suppliers, the new released App Wuli does a totally bad job in content, failing to cater to young people’s customs or habits. Labeled as an information App targeting young people born after 1990, Wuli categorized its content into Gossips “八卦震”, Knowledge “漲知識”, Jokes “笑點低”，Animation “二次元”, Videos “看視頻” etc. Simply looking into the categories, it seems like an App facing students from primary and secondary schools rather than the proposed segment it has stated.
Actually, in terms of positioning, Wuli continues to be “mass media”, which means it targets a whole market segmentation of young people, rather than a certain portion of audience segmentation. It’s ambitious to grab market share of young people regardless their life cycle or characteristics, similar to what People Daily has done to the adult market. As a result, the essence of Wuli remains to be traditional media, lack of tactics to interactively communicate with its users. Back to the content, since Wuli has a broad audience, it’s more than difficult to create appropriate content suiting for the entire young generation (not to say the political requirements about content, such as conveying right values in the articles).
In the consumer media era, consumers are increasingly picky to content, and are able to make decisions on their own. To achieve better performance, it’s strongly recommended that Wuli further segment the audience, reposition itself and produce excellent content.
After all … it has capital behind
Compared with other new apps, Wuli has absolute advantage in capital and power, which permits it more space to make a mistake. People Daily is the first media company in China for IPO, and sustained considerable year-over-year profit increase. Traditionally, most of its revenue comes from advertising and subscription fees of the media platform. However, it’s worth to be mentioned that from the income statement in Q3 2015, its investment income reached 40 million CNY, which occupied almost one-third of total income. Supported from such a giant company, it will be much easier for Wuli to acquire further investment from venture capitals like Meridian Capital China. Consequently, there is little need for Wuli to worry about its cash flow, and simply make more efforts to improve its content.
To sum up, the cooperation of People Daily and SUMG is a strategy to attain young audience in new media realm, who will be the main force to drive tremendous economic benefit in near future. Although the previous content and audience segmentation strategy is full of problems, Wuli has sufficient capital and chance to correct the mistake.