E-COMMERCE: Alibaba Opens Up SCMP Website, Changes PR Head
Bottom line: Alibaba’s removal of the paywall from the SCMP’s website shows it may want to use the newly acquired newspaper in its bigger strategy to get more news from big data, as it seeks to boost its global influence.
E-commerce giant Alibaba (NYSE: BABA) is in the headlines as it wraps up its landmark purchase of Hong Kong’s leading English language newspaper, announcing it will formally remove the paywall on the South China Morning Post’s (SCMP) website as its first major strategic move. In a completely separate headline, Alibaba has also named a new head for its international public relations team, replacing a heavy-hitter it hired less than 2 years ago in the run-up to its record-breaking New York IPO.
Both of these moves reflect the rapid changes taking place not only at Alibaba, but also in the traditional media realm where the SCMP operates. Traditional newspapers like the SCMP are looking desperately for new revenue sources as they get abandoned by their traditional advertisers and subscribers who are flocking to the Internet.
Some like the SCMP have tried charging fees for access to their websites, but have found limited success due to resistance from consumers accustomed to getting their news for free. Meantime, the change at the top of Alibaba’s global PR machine reflects the company’s global aspirations, and also the high pressure that comes with a job leading the communications strategy for such a high-profile name.
We’ll begin with the SCMP website shift, which came with the concurrent announcement that Alibaba has formally closed its purchase of a company that owns one of Asia’s oldest and most influential English-language newspapers. (English article; Chinese article) Alibaba surprised many when it announced its plans to buy the SCMP last year, due to its relative lack of history in the traditional media sector.
Some also feared the SCMP could lose its editorial independence with its purchase by a mainland Chinese buyer, and others worried that Alibaba might try to turn the newspaper and its website into promotional vehicles for the company. It’s still too early to say if any of those fears are being realized, and Alibaba’s removal of the paywall from the SCMP’s website doesn’t really hint at any major editorial changes just yet.
Blow to Subscription Model
Instead, the removal of the paywall seems to be a relatively big blow against traditional media companies that were hoping to survive in the future using web-based subscription services. The move also seems to show that Alibaba is willing to let SCMP ultimately slip into the red, though it’s possible it could make up for lost online subscription revenue with new advertising sales that will come with increased online readership.
My expectation is that Alibaba may have never intended the SCMP to be a profit-making machine by itself. Instead founder Jack Ma may see the newspaper and its website as a complementary piece to his bigger dream of wringing more news from the big data that the SCMP and e-commerce companies like Alibaba generate. Alibaba has already taken some steps to try and make better use of such data for news-generating purposes with its formation of a financial news joint venture with Shanghai Media Group (SMG) last year.
Next there’s the PR announcement, which has Alibaba naming a new executive, Jennifer Kuperman, as its international head of corporate communications, reporting directly to executive vice chairman Joe Tsai. (company announcement; Chinese article) This particular move surprised me a bit, as it comes less than 2 years after Alibaba appointed another high-profile westerner, Jim Wilkinson, to the same position.
Both Wilkison and now Kuperman represent a new generation of highly professional, experienced western executives that Alibaba began recruiting in the run-up to its record-breaking $25 billion New York IPO in 2014. Those executives were a major force behind the IPO’s success, which saw Alibaba’s stock soar in its first few months of trading.
But the team has had to deal with some less appealing work since then. First it had to handle a major clash with China’s e-commerce regulator over pirated goods being sold on Alibaba’s popular Taobao site in early 2015. Later in the year it also had to mount a major campaign to avoid similar criticism in an annual “notorious” piracy report published by the US government.
Alibaba says in its latest announcement that Wilkinson is leaving to start an unspecified new entrepreneurial venture. Perhaps that’s true. But I also expect that Wilkinson has been quite busy these past 2 years, and is probably ready for a lower-pressure challenge that involves something not only new but also lower profile and less likely to attract controversy.
(NOT FOR REPUBLICATION)
