The East is No Longer Red
By Eric Ransdell, Thu Feb 28 00:00:00 GMT 2002

Millions of Chinese are grooving and networking by zapping text messages to their favorite shows. In China, the idea is not only new, but revolutionary.

Most Chinese radio stations look like they were designed as military installations. With their bunker-like fortifications, heavily armed guards and barbed-wire fences they leave little doubt that the government still considers radio - with an audience in excess of 1 billion listeners - the most powerful weapon in its propaganda arsenal.

What’s changed, however, is radio itself. Instead of churning out such unforgettable revolutionary anthems as "The East is Red", Chinese radio now bombards listeners with a steady stream of sappy Mando-pop, kitsch karaoke classics and golden oldies that make its programming almost indistinguishable from that in other parts of Asia.

But the audience-friendly format doesn’t mean the security is any less tight. An average Chinese person wishing to enter a radio station would require clearance from high party officials or a formal invitation from the senior cadres who run the station itself. For a foreigner it is almost impossible to gain access to a Chinese radio station.

Which is why it was an exceptional event last month when Wytze van der Gaast a 27-year-old native of Holland, and one of his Chinese colleagues were allowed inside the heavily guarded confines of Shanghai Radio, the most popular radio station in China’s most populous city. What’s more, they were admitted into the studios with Yang Yang, the wildly popular female disc jockey whose drive-time dedication show reaches an audience in the hundreds of thousands.

Van der Gaast is a vice-president of sales and marketing for MezzMe, a Beijing-based SMS company, and on this particular day they were there to launch a pilot program that would allow any listener with a SMS-enabled mobile phone to interact with Shanghai’s most popular DJ. After three hours of preparation, Yang Yang’s show went out live and listeners were told they could SMS in requests to dedicate their favorite songs. "The first time Yang Yang announced that you could send an SMS to her show, the messages just started pouring in and they haven’t stopped since," says van der Gaast.

Number one with a bullet

That afternoon Yang Yang’s show received 200 requests for song dedications. Today, the SMS component has been extended to add real-time chat among groups of listeners and between Yang Yang and her audience. Yang Yang’s shows now generate as many as 9,000 SMS messages an hour. And her two assistants, Shadow and Ynse who host the 24-hour dedicated chat rooms, have become cult media figures themselves.

In the rest of the world, using SMS to allow an audience to interact with media programming is nothing new. In Norway, for example, the final episode of Big Brother generated 2.7 million SMS messages (out of a mobile population of 2.7 million users) to TV2, the station that carried the show. In Great Britain, more people cast their votes during that final Big Brother episode than in the country’s last parliamentary election.

But in China, the idea is not only new, but revolutionary. In the past, China’s media outlets cared little about their audiences. With all media owned by the state, the idea of responding to an audience (or generating profits, for that matter) was considered a foreign concept. But the advent of satellite, cable and looming foreign competition thanks to China’s entry into the World Trade Organization, has made China’s media outlets realize what broadcasters around the world have long understood that their audience is their most valuable asset.

And that’s where MezzMe comes in. The company was founded by Are Growen, a Norwegian SMS entrepreneur who approached the Beijing-based venture capital firm of Mobile Internet Asia Limited (MINT) with the idea of bringing a business concept that had worked successfully in Europe to the Chinese market. "With more foreign competition coming in it’s becoming a much tougher market and these broadcasters need to start making shows based more on market-driven decisions than on management decisions," explains Growen. "To start attuning their organizations to their audience rather than the other way around."

Judging by MezzMe’s success, it would seem that China’s broadcasters and publishers heartily agree. Although Mezzme is the only company operating exclusively in this space and it only began commercial operations last August, it has already signed up some of the biggest media organizations on the mainland. Aside from Shanghai Radio, MezzMe also has Chinese MTV, Beijing Sports Television, Shanghai Oriental Television, Guangzhou Television, China Radio International and numerous other radio, television, newspapers and magazines among its roster of media partners.

What MezzMe offers is a plug-and-play solution that allows media organizations to offer an SMS component to their programming almost as soon as the deal is signed. The software, much of which is off-the-shelf, allows companies to offer everything from live chat with media personalities to quiz programs along the lines of "Who Wants to be a Millionaire" to SMS voting that can affect the outcome of a show.

A lot of MezzMe’s pioneering work is in helping broadcasters understand how to deploy their products. "The way we define our company is not as a technology company," says Growen. "We build relationships and work more like a marketing organization doing lots of creative work, much more so than we would back in Europe." Adds Tom Kirkwood, CEO and founding partner of MINT: "The strategy behind MezzMe is much more important than the technology."

Brand free

A key component of MezzMe’s strategy is the idea of no branding. Though its SMS services are used by some of the biggest names in Chinese media, few outside the industry have heard of MezzMe. That’s because the company’s management has taken a conscious decision not to brand itself. Instead, it works as a silent partner running in the background under the brands of the broadcasters themselves.

"If we did brand ourselves we would bring down the value of our partners," explains Growen. "This way in the eyes of the consumer it’s MTV or Beijing Sports Television that have now started providing these wireless services to their end users and it’s their brand image that’s built up, not ours."

No branding means no marketing, which keeps MezzMe out of the costly game of having to advertise its services on billboards, newspapers and in the back seats of taxis like China’s other SMS providers. It also becomes much easier for media companies to add an SMS component to their offerings when they know that that it won’t entail marketing on behalf of the company providing the service.

For MezzMe having trusted media outlets as their distributors, the barriers of getting audiences to try out a service that’s new to China suddenly disappear. "The user experience is extremely important," says Kirkwood. "When a person’s using MezzMe technology they believe it’s already something that they are extremely comfortable with whether that’s their favorite radio program, tv station or the newspaper."

Its brand-free partnerships with big media outlets not only mean that MezzMe gains instant credibility in the marketplace, but that it can also charge a premium for its services. Currently, most SMS companies charge 2 to 3 miao (2.4 to 3.6 US cents) per message whereas MezzMe can charge up to 10 times those rates. "The reason is because people really want to interact with their television station or their favorite radio personalities," says Kirkwood. "But they might not be so excited to interact with a branded SMS service whose offerings are very similar to those of its competitors."

In Hollywood that’s called "Star Power". In China it’s proving to be a decidedly good business model. Like all SMS providers, MezzMe operates through China Telecom and China Unicom, the country’s two main mobile operators, who take 15 and 12 percent respectively and do all the billing and collection. According to Kirkwood, MezzMe’s media partners then receive 30 to 60 percent of the revenues. Last month the company saw a 359 percent growth in traffic and revenues. Since its inception it has been averaging 150 percent per month.

The use of SMS in China is experiencing similar rates of exponential growth. In the first six months of 2001, Chinese mobile subscribers sent 1.5 billion messages. During the second half of 2001, that number skyrocketed to 13 billion SMS messages.

Chat over China

Most of those were messages between friends. MezzMe is tapping into that trend by pioneering the use of SMS chat between people who might not be friends, but share a common interest in the same programs. On Yang Yang’s show in Shanghai, for example, audience members have a choice of communicating directly with the DJ or joining a chat group comprised of fellow listeners. Though Yang Yang and her assistants do interact with these chat groups, they are primarily self-sustaining. So far, it’s these chat groups that are proving to be the most popular of the show’s SMS offerings.

"We’re really focussing on ways for audiences to get to know each other and make friends," says Growen. "One of the main differences here is that the Chinese population is much more open to meeting new people than we are in Europe. Chinese people like to have the opportunity to talk to someone else while listening to a radio show, whereas in Europe it’s one-way between a listener sending direct messages to a DJ and then getting something back."

"The fascinating thing is that you are creating a community in that people are getting to know each other through the chat box," says van der Gaast. "In a sense, we are missionaries for a whole industry because we are helping people become accustomed to the idea of using their phones to tune into the radio."

Eric Ransdell is the former Silicon Valley Bureau Chief for US News and World Report magazine. Now living in Shanghai, he covers mobile technology in Asia.