Ren Xin reads news almost every day but does not subscribe to any newspaper.
The 25-year-old office worker gets her information fix from the Internet. "I also watch TV for news. Sometimes, I buy a newspaper or a magazine in the subway, but that is rare," she says.
Information-thirsty Ren is one of a rising number of Chinese youth who are increasingly shying away from traditional media, especially the print publications.
"Subscribing to a newspaper? Wow, that is my Dad's job," she says, breaking into laughter.
The rapid switch from print publications to online news offerings is a worldwide trend, but in China which has more than 100 million Internet users it is accelerating.
According to a survey by the quasi-government China Information Network Centre (CNNIC) at the end of last year, 67.9 per cent of Chinese Internet users listed news as the most-used Web service.
During the just-concluded World Cup, Ren, a football fan, watched live broadcasts on TV and went online to get additional information about the quadrennial sporting fest.
According to Nielsen Netratings, more than 40 million people visited a World Cup section during the tournament on Sina Corp, the largest Chinese Web portal.
Ren was also a frequent visitor. "I could find almost everything I needed in the section. Besides, I could write a comment to express my joy or vent my anger," she says.
The increasing move towards online news offerings underlines how new media, largely led by the Internet, is taking a toll on traditional media.
Ironically, the vast majority of news offerings on the Internet are from traditional newspapers and magazines. Under current regulations, commercial websites in China are prohibited from reporting news. Technology and sports reporting is an exception though there is no formal approval.
As a comprehensive platform for timely news offerings with text, hyperlinks, pictures and even video clips, Internet companies such as Sina are not only grabbing readers and audiences, but also snatching ads from traditional publications.
For instance, a World Cup section of another leading Chinese Internet portal, Sohu.com, generated about 40 million yuan (US$5 million) during the event. The section also provided copyrighted streaming video clips of the event.
Chen Tong, senior vice-president of NASDAQ-listed Sina Corp, says his firm earned much more. He declined to reveal the figure, but adds that the country's top cellular operator, China Mobile, alone paid 10 million yuan (US$1.25 million) for a title sponsorship of the World Cup section.
Similarly, Chinese home appliance giant Haier had a similar sponsorship on Sohu's World Cup section by paying 2.5 million yuan (US$312,000).
In stark contrast, GoalChina, the most widely read newspaper by Chinese soccer fans, reportedly secured only 20 million yuan (US$2.5 million) in ad sales linked to the World Cup.
The World Cup is not the only battlefield where traditional print media is losing ground to Internet media.
According to The Blue Book of China's Media, newspaper ads sales fell by 5.1 per cent in 2004, and by 16.5 per cent in magazines compared with an average growth of 20 per cent in the previous 20 years.
The drop is largely due to increasing competition in an overcrowded market, according to Cui Baoguo, a professor at Tsinghua University and the author of the blue book.
But "in a large part, that's also because new media is eroding both the circulation and ad sales of traditional publications."
Cui estimates that the ad sales of China's major newspapers in the first half of 2005 dropped by an average of more than 15 per cent year-on-year.
Hong Kong-listed Beijing Media, the advertising unit of popular Beijing Youth Daily, saw its net profit in 2005 drop by 94.8 per cent to 10.09 million yuan (US$1.28 million).
Beijing Media attributed the decline to shrinking sales of ads placed by real-estate developers.
However, "apparently, young Chinese are starting to move away from traditional print media as they can now access various new media outlets," says Cui, "And ad agencies have been quick to keep up with the trend."
Tian Kewu, managing Editor-in-Chief of Beijing Youth Daily, says the newspaper has been hurt by the rapid rise of Internet media like Sina Corp in the past few years.
In the early days of the Internet boom, traditional newspapers such as Beijing Youth Daily were providing news free to online firms, or charged very little.
The reason was simple: Traditional newspapers wanted their publications to reach more readers.
But the backlash was unexpected.
"We found Sina had become a very strong brand in news, which largely eclipsed our newspaper," says Tian. "Internet users don't care about the brands of traditional publications. What they know is that the news is provided by Sina."
As a result, Beijing Youth Daily decided to increase the charge for its news. Sina offered to pay 1 million yuan (US$125,000) per year, but Beijing Youth Daily deemed it unacceptable.
"That is even lower than the cost of our daily printing," says Tian. Accordingly, "we resolvedly decided to cease co-operation with Sina."
Chen, however, denies Sina offered 1 million yuan per year for news from Beijing Youth Daily.
"That is an exorbitant price that we will never offer. The online version of news published by traditional media is just a kind of value-added service. It can never equal the value of the original content," Chen says.
Beijing Youth Daily later decided to launch its own online version and clinched a partnership deal with Microsoft's MSN division to offer some of its news on MSN's Chinese-language portal. Beijing Youth Daily's online news, bundled with MSN messenger, has become one of the five most popular news websites in China, according to Tian.
"Our digital strategy is starting to pay off. But frankly, we are already late in embracing Internet technology."
Traditional newspapers and publications covering technology sectors are bleeding more.
Last year, China Computer World (CCW) Group, the largest IT media house in China, posted 450 million yuan (US$56.25 million) in annual revenues, up 11 per cent year-on-year but the revenue growth mainly came from exhibition business and online publishing, according to Liu, the group's president.
"Our traditional publishing business is, in fact, declining rapidly in terms of both circulation and ad sales," says Liu.
"We could have built a strong online brand in the 1990s. But due to the Internet bubble, we did not make adequate efforts to commercialize CCW's online version. We really missed a good chance."
Liu says his company expects to generate 50 per cent of its revenues from publishing via new technologies by 2010.
CCW has significantly cut the amount of news offerings provided to Internet portals such as Sina Corp as a defensive move and is adopting an "Internet-first" strategy to boost digital publishing. Last year, CCW's website generated 18 million yuan (US$2.25 million).
"Going digital is a move CCW has to take," says Liu. A recent survey by CCW Group shows "our top 20 ad customers are shifting a large portion of their spending onto the Web."
According to Shanghai-based iResearch, China's online ad market was worth 3.13 billion yuan (US$391.2 million) last year, up 7.6 times from 2001.
The market is forecast to hit 4.6 billion yuan (US$575 million) this year and 15.7 billion yuan (US$1.96 billion) by 2010. The revenues earned by ads agencies are not taken into account.
But that accounts for only a small portion of the ad sales of traditional media last year. China's ad market was worth 316 billion yuan (US$39.5 billion), according to Nielsen Media Research.
But with big companies increasingly interested in interactive marketing, the forecast for the online ad market could be upgraded, according to industry observers.
"Most big names in the market such as Lenovo and Nike are our customers," boasts Sina's Chen.
Feeling the heat, some major newspapers have recently called to form an alliance to prohibit Sina from using their news offering.
But such an attempt could hardly succeed, according to Wang Ran, chief executive officer of China eCapital, a leading private investment bank in China focusing on the media sector.
"Some smaller newspapers and magazines are still putting a big bet on the very influential Sina to make a name for themselves and boost their popularity," he says.
And the online ad boom is not totally coming on the cost of traditional publications, Wang notes.
"That is largely an emerging market."
The only solution for traditional print media might be a convergence with new media, especially Internet tools and mobile telephony.
"Traditional media would never be replaced, but they will be increasingly eroded by new media. It's foreseeable that traditional media will get a larger proportion of their revenues from publishing via new technologies," Wang says.
The competition between traditional media and new media is set to intensify in the coming years.
"Even new media like Sina have realized their news sources are at stake with the increasing wariness of traditional media," says Wang.
"They are diversifying their resources such as blogs to lower risks."
Blogging is a service enabling people to post Web blogs, or online journals. By the end of last year, China had more than 16 million bloggers.
And 52 per cent of white-collar workers in China keep blogs, according to career consulting firm CBP Career Consultants Co Ltd.
