Protocol | China

Can Chinese tech save American news?

TikTok isn't the only hit U.S. app with roots in China.

Can Chinese tech save American news?

China is one of the world's most controlled news environments, yet the practices developed there have succeeded worldwide.

Photo: Shawn Goldberg/SOPA Images/LightRocket via Getty Images

It's the most downloaded news app in the world — and the content it carries is entirely local. In the U.S., it drives more traffic than all but three apps. Small publishers have raved about the page views it brings: about 700 million in 2020. It was more downloaded than The New York Times, BBC and even Google News. It's rethinking how local news gets delivered with an AI-driven interface and a stream of hyperlocal COVID-19 updates its users crave. With 45 million monthly active users and 24 million installs via the App Store and Google Play in 2020, News Break bills itself "the nation's No. 1 intelligent local news platform."

Yet it's not rooted in the local communities it serves; in fact, it's founded by Chinese entrepreneurs and computer scientists in Silicon Valley. Meet the AI-driven aggregator News Break.

News Break is a classic example of a cross-border company. Headquartered in Mountain View, California, and with offices in Seattle, Beijing and Shanghai, it's owned by Particle Media, a parent company founded in 2015. News Break is led by a team of Chinese entrepreneurs and engineers with extensive experience in both the U.S. and China. CEO Jeff Zheng, a former Yahoo executive, co-founded News Break in 2015 along with former Baidu executive Xuyang Ren, who departed in 2020.

News Break has succeeded using tactics imported from China, where news delivered via algorithm — a practice pioneered by ByteDance's Toutiao — has flourished. An "interest-based engine" powered by AI select articles readers are likely to enjoy based on past engagement — much the way, say, YouTube and TikTok select videos a viewer might like.

Content aggregators like News Break aren't just winning in the U.S. market. Opera News, owned by Beijing Kunlun Tech, and Scooper News, developed by Shenzhen-based Transsion Holdings, have both made significant inroads into Africa and Europe. These apps can target the audiences mainstream outlets tend to neglect, and they serve not just news, but information pulled from every corner of the internet.

China is one of the world's most controlled news environments, yet the practices developed there have succeeded worldwide — despite, or perhaps because of, pervasive censorship. Without the ability to freely access, share and discuss certain major news, users are less likely to look to what their friends share, creating greater space and necessity for algorithms to step in.

Enter coronavirus

The company's own big break came in 2020. When it launched in 2016, it reached No. 39 among the most downloaded news apps globally, according to Sensor Tower — a promising start, but not dominant. Then the COVID-19 pandemic hit; traffic to News Break surged in March 2020, up 516% from the month before, as it became the go-to source for localized COVID-19 updates, according to publishing analytics firm Parse.ly. News Break now ranks as one of the world's most downloaded news apps.



The Toutiao install number is likely much bigger. Sensor Tower doesn't have Toutiao's Android app download estimates for China, as Google Play is not available there.

"What makes News Break special is that it offered local readers what they needed at a time they needed it most," Kelsey Arendt, who leads data insights at Parse.ly, told Protocol. Arendt says that "an add-on or nice-to-give" with other aggregators, but a "core focus" for News Break.

Investors have taken note. After closing a $115 million series C funding round in January, News Break claimed it became a newly-minted Silicon Valley unicorn. Backers include the prominent Francisco Partners, IDG Capital and ZhenFund.

News Break's special sauce

The key to News Break's success is an AI-curated personalized and localized news feed tailored for each user. News Break calls its core technology an "interest-based engine" (兴趣引擎). "The interest-based engine combines search, recommendation and intelligent interaction, which requires a high tech stack," CEO Zheng told Chinese media Baijing in 2017. "It encourages users to have richer and more intelligent interactions with the product."

To get users hooked, News Break also makes use of frequent push notifications — this reporter has received an average of 20 alerts each day since installing the iPhone app — and it pays local bloggers and content producers to write articles, express opinions and share local news events.

News is only an entry point. News Break is mostly invested in the so-called " long-tail," a popular marketing strategy catering to various niche interests, instead of only a few popular verticals. Once the user signs up for verticals that interest them, News Break will recommend more relevant channels.

Like most popular apps in China, all of which strive to become an "app for everything," News Break is not satisfied with just being a news aggregator. To lock users into its ecosystem, News Break is also a Nextdoor and Craigslist, providing classified information such as local job listings, events, restaurants, deals and services for specific communities.

With its deep understanding of its users' interests, News Break is able to build what publishing data analysts call high "demand," meaning average views per article, which equates to the quality of audience reach. In March 2021, News Break ranked No. 4 as a news traffic source, after Google, SmartNews and Flipboard. But the average viewership on each News Break article was higher than that of Google News, according to data from Parse.ly.



News Break won't break — or save — local news

Small and local publishers have raved about the traffic News Break drives to their sites. According to Parse.ly, in 2020 News Break became one of the top referrers within their respective networks, after Google and Flipboard.

But aggregators like News Break won't replace local newspapers rooted in their readers' communities, said Joseph Lichterman, editorial and communication director at the Lenfest Institute for Journalism, a local, journalism-focused nonprofit based in Philadelphia. News Break "lacks an independent and original voice as well as a sense of community, which is critical for local news," Lichterman told Protocol.

The app won't do much for the bottom lines of local papers, either, which are increasingly reliant on direct reader revenue through subscriptions or membership, while digital ad revenue is dwindling. "These types of news aggregators could be helpful to grow raw traffic, but they're unlikely to result in the type of habituation that converts readers to paying supporters," Lichterman said.

TikTok it ain't

Cybersecurity experts worry that at a time of strained U.S.-China relations, the fact that News Break has a presence in China — which multinationals like Microsoft and Google also do — might attract heightened scrutiny if it continues to grow. For example, given its Chinese ownership, popular U.S. app TikTok found itself at the center of U.S. controversy about sharing data with Beijing last year, although a recent Citizen Lab audit has found the app doesn't pose a national security risk to the U.S.

News Break didn't respond to Protocol's inquiries for comment. But a News Break employee who requested anonymity told Protocol that all of the company's data is stored on Amazon Web Services, and its servers are located in the U.S.

"If the data is stored with AWS in the U.S., I don't see how the Chinese government could access it without AWS knowing about that. There is no law in China explicitly granting the Chinese government that authority," Samm Sacks, a cyber policy fellow at New America, told Protocol.

Though News Break's China presence can raise potential questions about information control — to what extent the news seen by readers in America might be subject to censorship and how it might expose them to disinformation. But experts say that without research into the app's data infrastructure and the company's architecture, it's hard to assess how concerned people should be about these issues.

"Even without the help of the Chinese government, disinformation has already wrought havoc here in the United States," Sacks said.

Correction, April 29, 2021: Due to inaccurate reports in Chinese media, this article previously named an investor who does not back News Break. It has been updated.

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