Around the world, more and more people are choosing to read news via mobile clients. On the whole, social media apps and news apps have become the main ways people access news on mobile clients. News apps, which are designed specifically for the dissemination of news, have become a main site of market competition for news media and other app distributors. Let’s take a look at the differences between Chinese and US news apps.
At SVIEF on September 30th in US, Cheetah Global Lab released a report which titled <Global News App Market: Development Sitation and Trends>.
<Global News App Market: Development Sitation and Trends>
1. An Overview of the Global News App Market
Which country has the most mature news client market? The answer is Japan.
Our standard for this was the countries’ overall active users. The higher the ratio of active users, the higher the number of mobile users of news apps in that country. Japan came in number one, and China came in second.
This probably seems quite strange to many of you. Why does the US come in second to last? Many of you here today may be able to provide some additional insight into this, but according to our analysis, there are two possible reasons. The first is that US users have not completely moved from PC to mobile clients for their reading needs. According to a May 2015 report by the Pew Research Center, most US websites had more traffic from mobile clients than PCs. However, in terms of time spent per visit, desktop users still came out on top. The second reason is that US users prefer to use social apps such as Facebook to read the news on their mobile clients, instead of apps designed specifically for the news.
Which market is the most competitive? The answer is India. We conducted an analysis of market competition taking into account two factors. The first was the number of apps with a market penetration higher than 5% in the country. The more such apps in a country, the higher the number of seriously competitive apps. As we can see, India and China each have six such apps, while England and Japan have four, and the US has only two. The second factor was the market penetration of the country’s number one app. The lower this number, the higher the danger of this top app being challenged. In this respect, India’s top app claimed only 25% of the market, while the top US app claimed over 50%. Taking into account this second factor, China is the second most competitive market of the five. Meanwhile, the US market is more monopolized.
If you look at our rankings for these countries, you may discover something surprising. News aggregation apps have already become mainstream in the news app market. In the news app markets of major countries, there is always at least one news aggregation app among the top three. There’s Flipboard, of course, which has an absolute advantage in Europe and the US. And among other news aggregation apps, another trend has emerged, that of personalized recommendation news apps. These apps are especially popular in developing countries like India and China. India’s dailyhunt is the number one news app in India. Meanwhile, in China’s top five, three are personalized recommendation news clients. Japan’s SmartNews is the number-two ranked news app in the country.
2. The Undercurrent of News App Rankings in the US
First, let’s take a look at the top 20 news apps in the US. We can basically divide them in four categories:
1) News aggregation
News aggregation apps like Flipboard and News Republic account for more than half of the market.
2) Media subscription services
With media subscription apps like Google Play Newsstand, users can subscribe to multiple newspapers and magazines through a single app. When they want to read something, users can click on the newspaper or magazine and they will be automatically transferred to the media’s mobile version.
3) Comprehensive news portals
Comprehensive news portals include Yahoo News and AOL. Along with MSN, once upon a time, they were known as the US Internet’s three major portal sites.
4) Traditional media
This category includes FOX News, NYTimes and other news apps that are the result of traditional media transitioning.
The market share of news aggregation apps in the US already greatly surpasses that of other kinds of news app. However, news apps distributed by traditional media have higher user stickiness than news aggregation apps.
Fox News has the highest user stickiness of these news apps. Although Fox News is traditional media, its app user experience is by no means outdated. The media outlet’s app has multitasking capabilities. Users can browse news headlines while at the same time, on the same page, watching a live broadcast of Fox News. That’s one reason why Fox News still has a loyal user base, even though it’s an older media outlet.
Let’s take another look at the number-one ranked US app here, Flipboard. Breaking down Flipboard’s market share into its preinstalled version, which comes preinstalled on Samsung devices, and its voluntarily downloaded version, we can see that the preinstalled version accounts for more than two thirds of its total market share.
Google Play Newsstand is also facing a serious problem. From this graph, you can see that in the first half of 2016, Google Play Newsstand’s market penetration among US Android users shrunk. Why have these two major news apps have lost ground? We can find the answer in the next chart.
From the week of July 4th, we often refer to this index to see apps’ growth trends. From this chart, we can see that this week’s top five apps by new installations include three apps with personalized recommendation technology: News Republic, News Master, and News Break. News Republic rose to 23.86%, while Flipboard and Google Play Newsstand had only 1.47% and 0.58% respectively during the same period. So, we can see that US users are gradually beginning to accept personalized recommendations for their news reading needs.
3. China News App Market: New Reading Habits is Taking Shaping
Unlike in the US, where traditional media news apps are going strong, in China, news portal apps that developed out of portal websites over the course of a long period of time before 2015 became the main channel by which Chinese readers accessed their news.
This chart shows the total number of active users of apps in the news app category for the first seven months of 2016. As you can see, this figure grew from 16% at the beginning of this year to 19.42%, a 21% increase. The line running across the graph here tracks the changes in the news app category’s ranking compared to other app categories. The news category rose from eighth place to fifth place, surpassing shopping and social. This shows that the number of people using news apps is gradually rising. The rise of the news app category has also boosted the momentum of personalized recommendation news apps.
Let’s take a look at the products. 2015 was a year of milestones for the Chinese news market. In 2015, Chinese personalized recommendation news clients completely surpassed portal site news clients. Now let’s take a close look at this graph. During the beginning of 2015, Jinri Toutiao only had less than half as many weekly active users as Tencent News. However, over the course of the year, Jinri Toutiao rose rapidly, and in September it surpassed Tencent News. Tencent News, on the other hand, lost users in 2015.
Thesame thing happened with Yidian Zixun. At the beginning of 2015, Yidian Zixunwas at the same level as the iFeng, NetEase, Sogou, and Sina news apps, but asof the end of 2015, its active users had tripled. Meanwhile, other portal appshad virtually no growth, and some even shrunk.
Overall,the Chinese market had two giants, two strong contenders, and a diverse arrayof apps dividing up the remaining market share. Four groups divided the Chinesemarket between them.
The first group was made up of Jinri Toutiao and Tencent News. Tencent News, leveraging the user base it built up during the PC era, retained a strong advantage in the mobile client market. Meanwhile, Jinri Toutiao leveraged the precision of its recommendation algorithms and its ability to break news to claim the number one position in the Chinese news market category.
Group #2 includes Yidian Zixun - funded by ifeng.com - and Tiantian Kuaibao - funded by Tencent. The weekly active users of each amount to the combined weekly active users of the apps ranked between five and ten.
Group #3 is made up of traditional portal sites. Sohu, iFeng, Sina, and NetEase, all formerly dominant portal sites, have not performed ideally in their transition to mobile clients.
After Group #3, the remaining apps form a more segmented market, breaking it down into sectors such as entertainment and military news. Although they do not have high market share, they have more well-defined user groups and unique value.
It is worth noting that there are two points on which the Chinese news market is totally different from the US market. One is that there have been virtually no apps distributed by Chinese traditional media that have performed well. Only one, The Paper, made our rankings, and it came in number 17. The Paper is an app distributed by a traditional newspaper group. There are two possible reasons for this: one is that Chinese traditional media are part of a more stagnant system, and administrative matters are a strong force holding them back. This has led to a rather slow transition. The second is that other news apps, such as those developed by portal sites and apps developed specifically for mobile, have developed rather quickly.
The second way that the Chinese market is different from the US market is that Chinese news aggregation apps, especially those that provide personalized recommendations, have higher user stickiness than portal apps. As you can see here, aggregation apps have an average weekly app openings per person of 2.92, while portal websites have only 2.5.
4. How Can Personalized News App Stand Out in the US
Globally, Chinese developers are at the forefront of the personalized news app trend. They have begun to deploy this kind of app in countries all over the world, including the US. What’s more, once they are distributed, these apps have done very well. Most are breaking into the top 20 news apps in their markets. In India and Southeast Asia, they have even entered the top 10. In these countries, personalized news apps are quickly gaining ground.
However, there are several issues that must be resolved before an app gains broad acceptance in the US.
The first is the issue of copyright. In China, personalized recommendation news apps can develop rapidly in large part because when they first start out they use their technology to indiscriminately scrape media content, without thinking about copyright issues. This has led to great controversy. It is only after one or two years that they begin to pay attention to copyright issues. But in the US, where copyright protection is relatively strong, this kind of development model is not accepted. Therefore, it’s necessary to get copyright access to several media first before a company can use technology and algorithms to develop this kind of app. This is difficult for startup teams. So whoever has both the technology and the copyright can make it in the US market.
The second issue is that of user reading habits. In the US, many news media have made social media the main channel for their news distribution. According to a September 2015 user survey conducted by the Nielsen and Knight Foundation, the three main channels by which US users access the news are television, social media sites, and social media apps.
Apps designed specifically for the news seem not to have become a major news access channel in the US. It will take some time before this changes at all.
The third issue is the improvement of algorithms for personalized news apps. They must not only recommend news in line with users’ interests, but also deliver news with greater value.
However, on a global scale, we are confident that personalized news apps are the future of news consumption, and in this respect, it’s time to copy China.
Editors：Cheetah Global Lab Nisa Albert