Whose Headline Is It Anyway?

By+Li+Li

As more people turn to their mobile de- vices for news consumption， a goldmine has emerged in offering up personalized solutions for readers using the medium. Zhang Yiming， the founder and CEO of Beijing-based ByteDance.com， was one of the first Chinese entrepreneurs to spot an opportunity. The companys Toutiao app is one of the most used mobile news apps in China.

Toutiao， meaning “headline” in Chinese， is a personalized information aggregator which tries to supply content that is automatically created for each of its users through analyzing data obtained from their social networking accounts and personal reading habits.

Zhang is no stranger to entrepreneurial undertakings. After graduating from Chinas prestigious Nankai University in Tianjin with a degree in software engineering back in 2005， he worked for ticket booking service Kuxun. cn， microblogging website Fanfou.com， and established property rental site 99fang.com. As early as 2008， Zhang considered creating aggregation software that focused on jokes and real estate news， but gave up when he found the market wasnt ready.

According to Southern Weekly， a newspaper based in Guangzhou in south Chinas Guangdong Province， three changes Zhang spotted during the second half of 2012 led him to create Toutiao： Developments in machine learning， social networks and mobile Internet.

Launched in August 2012 as a content distributor， Toutiao does not generate content itself， but rather aggregates it from other sources. It has registered more than 120 million unique users and over 40 million active monthly users， according to company data. Zhang revealed that Toutiaos in-app advertising revenue in the first five months of 2014 surpassed 10 million yuan （$1.6 million）. However， Toutiao has still not achieved profitability.

In early June， Toutiao secured $100 million worth of Series C financing led by Sequoia Capital， a U.S. venture capital firm. It is currently valued at $500 million.

However， the initial success of the fledging IT start-up has received backlash from traditional media outlets. Several news portals， media giants and influential bloggers asked the company to stop using unauthorized linking， reproduction and forwarding of their contents.

A court in Beijing heard a case against Toutiao on June 4. Dayoo.com， which is authorized to publicize the content of newspaper Guangzhou Daily over the Internet， filed the suit and accused Toutiao of copyright infringement.endprint

The lawyer representing Dayoo demanded the removal of links to its original reports from the app， display of an official apology on the apps home page for a month and compensation. However， the lawsuit ended with a cooperation agreement signed by the two sides on June 18.

On June 23， the National Copyright Administration （NCA） confirmed that the administration had launched an investigation into Toutiao after receiving complaints from various media outlets that claimed that the website had illegally reproduced or reposted their stories.

The move has been seen as part of a nationwide crackdown on online infringements of intellectual property rights that the NCA launched on June 12， when the administration also pledged to improve a copyright certificate mechanism for print media to cooperate with news portals.

“Strictly speaking， the services that we are providing are just a collation of news links， and we dont plagiarize any content，” Zhang said.

No easy answer

Zhang told the media on different occasions that during his companys initial development stage， Toutiao engineers used programs to categorize and archive media and social network content and reformatted some web pages into a mobile-ready version， mainly without the authorization of the original websites. In the process， advertisements on the original web pages were sometimes omitted. Moreover， as the reformatted pages are mostly stored in the servers of Toutiao， the original websites saw no increase in page hits for their content on the Toutiao app.

But the practice was later adjusted with its focus being shifted to guiding readers to the original sources， according to Zhang.

“About 70 percent of the clicks on our app will go directly to the original sites and I dont see any legal risk to this part of our business. The remaining clicks will direct users to our reformatted pages where we can still keep the logo from the original website. This part of our business could be controversial，” Zhang said during an interview with Southern Weekly on June 6.

Zhang explained that the reformatting is mainly driven by technological needs as some pages， mainly from smaller websites， are unusable by Toutiao app and browsing them directly could lead to the application crashing.

Newspaper Beijing Times reported on June 7 that Toutiao has launched a study into minimizing the reformatting of pages unless it is technically unavoidable.endprint

“We have tried to communicate with websites whose content is not adaptable with our app. If they still reject our app reformatting their content， we will remove any links； if they can see the possibility of any form of cooperation， we will discuss it further with them，”Zhang told Beijing Times.

However， many legal experts refuse to accept Zhangs description of his app as being equivalent to Internet search engines.

“Compared to search results from Baidu， the worlds largest Chinese-language Internet search engine， which shows only a tiny part of the content of the original websites， Toutiao has edited the information， which makes it a content provider instead of a search engine，” said Xu Chao， a former senior official with the Copyright Management Department of the National Copyright Administration. He said that once copyright infringement was established， content providers hold the primary responsibility and service providers hold an indirect responsibility.

Zhang Hongbo， Director General of the China Written Works Copyright Society， said that Toutiao has at least infringed upon the rights of traditional media， reporters and other authors. According to him， many of societys members have complained about Toutiaos practice and are considering launching a class action lawsuit against the company together with industrial associations of traditional media outlets.

Song Jianwu， a professor at the School of Journalism and Communication of Beijingbased China University of Political Science and Law， defended Toutiaos model from the perspective of enhancing the publics right to know in an interview with China News Service.

Song said that compared with the Copyright Law， the Information Network Transmission Right Protection Ordinance leaves more space for the spread of information over the Internet， especially content related to current affairs.

The ordinance， which came out in 2006 and was amended in 2013， lists eight categories of works that can be spread through networks without the permission of copyright owners or paying them. The seventh category is published articles on political and economic issues related to current affairs.

“The overall development of the web-based media has better guaranteed the publics right to know by making information more accessible，” Song said.

Song said that these copyright infringement litigations filed by the traditional media are not necessarily winnable and even if they did win， there are little real benefits to their operation.endprint

Possible cooperation

Many websites whose links appear on Toutiao app are partners that approached it. These often lesser-known sites have garnered a boost in online traffic after cooperating with Toutiao by receiving visits from users of the app. Dongqiudi.com， a football information website， is one such site.

Chen Cong， the websites founder， told Southern Weekly that around 40 percent of the traffic to their mobile website comes from Toutiao. He said that the controversies over the legality of Toutiao are mainly caused by the different mindsets of traditional and new media.

Nextcar.cn， an auto information website， is also a partner of Toutiao despite originally opposing the app. In January， Nextcars founder Hai Lan paid a visit to Zhang Yiming， asking Toutiao to stop reformatting the pages from her website. Instead of pulling all related content from his app， Zhang promised to replace the reformatting with redirecting readers to Nextcars original pages after conducting tests on Nextcar.cn. This led to an immediate increase in visits to the website and visits by Toutiao users make up around one quarter of Nextcars total traffic.

Similar cooperation also exists between Toutiao and the mobile web edition of news portal Huanqiu.com. The special format tailored for the users of Toutiao by the latter receives a total of 6 million to 10 million visits daily.

Shen Yang， a professor at the School of Information Management of Wuhan University in central Chinas Hubei Province， said instead of confronting each other， traditional and webbased media should seek cooperation. “I hope that both sides could constructively discuss topics of copyright protection and technological innovation in the new era under the legal framework，” Shen said.endprint