Why the Chinese Will Pay for Content That Americans Won't
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Back in early 2016, Li Xiang was just another overworked magazine editor in Beijing. Then along came an opportunity to produce a business newsletter on a brand-new app called De Dao. In just a few months that app, whose name means “I Get,” had attracted millions of users looking for daily advice and to learn everything from music to economics. And Li? Within months, he had close to 100,000 subscribers paying about $30 a month.
It’s the kind of story that couldn’t happen in the United States, where many people believe content should be free. In China, meanwhile, companies and individuals alike have managed to monetize smartphone apps, making money from news, entertainment and social media — by making people directly pay for it, instead of relying on advertisers. De Dao is just one in a whole economy of mobile apps where people like Li Xiang can make real money.
“In China, we don’t really talk about advertising-supported models, whether it’s on PC or mobile,” says Jenny Lee, a venture capitalist at GGV. “There are very few startups that actually grow very big on the back of advertising. There’s Baidu with search, but beyond search-based advertising, most of large internet companies in China actually grew or monetized by charging the consumer directly.”
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