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China’s content war heats up: Toutiao poaches talent from Zhihu

By Rita Liao

For the past two days, the focal point of Chinese technocrats has been on the war for talent between two rising content-focused startups—Toutiao and Zhihu. On August 29, a celebrity microblogger on the Quora-like platform Zhihu posted on WeChat moments about the news aggregator app Toutiao poaching authors (our translation):

Toutiao has signed more than 300 big Vs this year so far, and it has just signed me, at a compensation higher than that of an average white-collar worker. After signing with Toutiao, an author’s content cannot be reposted to Zhihu. The quality of Zhihu’s articles are going down as all the good content creators have been poached.

Toutiao, the four-year-old Chinese startup whose valuation surged to over $22 billion, launched its own Q&A platform in 2016 eyeing the monetization promises: users can pay for an industry expert, or an internet celebrity, to answer questions. Established and new internet companies in China are betting big on content as user acquisition costs in the country become higher. In a world of information overload, netizens increasingly long for quality, targeted digital content.

Started in 2011, Zhihu has evolved into a haven for well-educated users from top tier cities to share and consume knowledge. By the time the company was crowned a unicorn after its $100 million series D in January, it had accumulated 65 million registered users with 18.5 million active daily. Toutiao’s daily active users are at a meteoric 120 million—almost one tenth of the nation’s population—according to a leaked investor deck (in Chinese). The news app’s ad revenues are also growing at an alarming pace: from RMB 300 million ($45.58 million) in 2014 to RMB 8 billion ($1.22 billion) in 2016. The amount is still a fraction of the country’s digital advertising giant Baidu’s RMB 64.5 billion ($9.8 billion), but Baidu started 17 years ago.

This is not the first time Toutiao has waged a war over content. Not long ago it announced an RMB 1 billion ($150 million) subsidy plan (in Chinese) for its new short video arm Huoshan and has reportedly won over MC Tianyou, a top influencer from Kuaishou, currently China’s biggest short video app by monthly active users. Some commentators point to Toutiao’s surreptitious poaching tactic; others, including writer Zhang Jiawei, say that it’s normal for a writer to jump from platform to platform (in Chinese).

“It doesn’t hurt to have another source of revenue,” Zhang replies to a Zhihu post debating the talent grab. “Content monetization, as they call it.”

Source:: China’s content war heats up: Toutiao poaches talent from Zhihu

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