lerbook Chapter 410 Media War
Chapter 410 Media War
December 15, 2002, morning.
As soon as Ling Yun arrived at the office, Chen Lingling pushed the door open and came in, holding several newspapers and printed screenshots of web pages. She looked rather unwell.
"President Ling, look at this, someone's starting trouble again."
She placed the newspaper on the table. On top was a copy of the Southern Metropolis Daily, with the economics section's headline: "Spark Monopolizes MP3 Industry Chain, Small and Medium-sized Enterprises Face Survival Dilemmas."
Ling Yun picked it up and quickly scanned it. The gist of the article was: Xinghuo Group monopolized the upstream of the MP3 industry chain by controlling core components such as chips, screens, and flash memory.
Small and medium-sized enterprises have no bargaining power and can only be exploited. Xinghuo's approach of creating a high-end brand while controlling downstream customers through open-source solutions is a typical example of "double monopoly."
He picked up a second newspaper, *21st Century Business Herald*, with the headline "Ling Yun: From Innovator to Monopolist." The third was *China Business Journal*, with the headline "Open Source Just a Pretext? An Investigation into the Spark MP3 Industry Chain." The fourth was a webpage screenshot, a headline from Sina Finance, titled "Spark Cuts Off Supply, Huaqiangbei MP3 OEM Factories Collectively Halt Production."
Ling Yun finished reading the newspaper and put it down. He looked at Chen Lingling and asked, "When were these articles published?"
"It just came out today, in newspapers and on websites, almost at the same time. Although the wording is different, the angle is the same. They all say that we have a monopoly, that we suppress small and medium-sized enterprises, that open source is fake, and that the main purpose is to control the market."
Ling Yun remained silent. He was very familiar with the writing style of these articles; they weren't the kind of poorly made smear articles, but rather meticulously planned ones. They included data, case studies, analyses from "industry insiders," and interviews with "victims." Each one appeared objective and fair, but each one reached the same conclusion: Xinghuo was a monopolist, and Ling Yun was a monopolist.
More importantly, these articles all cited the same "victim"—Hsiung Feng Electronics. Liu Zhenxiong, using the pseudonym "Mr. Liu," recounted how Xinghuo "pushes him to the brink": Xinghuo first seized the market with low prices, then controlled the chip supply, and finally cut off the supply, causing his factory to shut down and workers to lose their jobs.
"Who could have done this? Judging from the scale of this public outcry, it doesn't seem like something a small company in the industry could pull off," Chen Lingling asked.
"A pipe dream," Ling Yun said. "They've been waiting for this opportunity for a long time. Liu Zhenxiong's production line has stopped, and his customers have left, so they can use this as fodder. Those 'small and medium-sized enterprises' are just those people from the South China Electronic Commerce Association. They found the media, coordinated their statements, and released the articles simultaneously."
"So what do we do?"
Ling Yun thought for a moment and said, "Find Zhao Weiguo."
Ten minutes later, Zhao Weiguo pushed open the door and came in. He had already seen the articles, and his face was even more unpleasant than Chen Lingling's.
"President Ling, these people are shameless. It was Liu Zhenxiong who started the trouble first, and now they're turning around and accusing us of a monopoly. Those small factories wouldn't even be able to make MP3 players if it weren't for our standard design. And now they're saying we're holding them by the throat."
Ling Yun said, "No rush. They're waging a media war, and we'll fight back. But not by exchanging insults, we'll present the facts. You can contact Caijing Magazine; they've done an interview with us before, so they know us quite well."
"Arrange an in-depth interview with them to clarify the true situation of the MP3 industry chain. This includes how Liu Zhenxiong sent people to harass our store, how he hired people to film customers, and how he used counterfeit and shoddy products to flood the market. Make a copy of the evidence and send it to them so they can select some that can be made public and release it."
Zhao Weiguo asked, "By the way, have we obtained evidence of the Yixiang Group's involvement?"
Ling Yun said, "One of Liu Zhenxiong's men has already confessed. He revealed the time, place, and people involved in Liu Zhenxiong's meeting with Yixiang. Wang Degui is verifying this, but it's hard to say whether there's any evidence."
Zhao Weiguo nodded. "Okay, I'll contact Caijing magazine right away."
Two days later, a reporter from Caijing magazine arrived in Jinan. The interview took place in the conference room of Xinghuo Group and lasted for more than three hours.
Ling Yun did not participate, and instead had Zhao Weiguo and Chen Zhongming handle it. They recounted the entire story of the MP3 industry chain from beginning to end—from how Xinghuo developed the M1, how they developed the open-source solution, and how they drove the development of the upstream industry chain, to how Liu Zhenxiong hired people to cause trouble and how they used counterfeit and shoddy products to disrupt the market.
Zhao Weiguo laid out a table full of evidence. There were photos taken by Wang Degui showing Liu Zhenxiong meeting with troublemakers, statements from Liu Zhenxiong's subordinates, records of Liu Zhenxiong's phone calls with executives of Yixiang, and recordings of internal meetings of the South China Electronics Chamber of Commerce.
The reporter listened and took notes, the pen scratching across the paper. After the interview, he said, "This material is enough to write a long article. But we need to verify it, and that takes time."
Zhao Weiguo said, "I'll wait for you."
Three days later, the cover story of Caijing magazine was published. The title was "The MP3 War: Who Is Monopolizing?" The article was long, taking up eight pages. It began with the story of Liu Zhenxiong's Xiongfeng Electronics ceasing production, and then peeled back the layers—from the MP3 industry chain in Huaqiangbei, to Xinghuo's public domain solution, to Liu Zhenxiong's hiring of people to cause trouble.
The article concludes: "The essence of this MP3 war is not monopoly versus anti-monopoly, but a contest between two models. One is the model of mastering core technologies and driving the development of the entire industry chain through open source; the other is the model of relying on assembly, distribution channels, and unfair competition to survive. The former is rising, and the latter is declining. This is not a question of who has a monopoly, but a question of who can survive until tomorrow."
After the article was published, public opinion began to reverse.
Sina Finance moved Caijing's report to its homepage, changing the title to "The Truth About the MP3 War: The Supply Chain Game Behind Spark Open Source." The tone of the comments section also shifted.
"So that's how it is. Those small factories are using Spark's solution, and they even said Spark has a monopoly. How shameless."
"Liu Zhenxiong hired someone to photograph customers; does this kind of person even deserve to be called an entrepreneur?"
"The Spark open-source solution is given away for free, yet people accuse it of monopolistic practices. It's really hard to be a good person."
After reading the reports and commentaries, Ling Yun closed the newspaper and set it aside. He knew he had won this media war.
Xiongfeng Electronics occupies the entire fifth floor of an office building on Zhenhua Road. A brightly polished brass plaque bearing the words "Xiongfeng Electronics Technology Co., Ltd." hangs above the entrance. A young woman in a white shirt, her hair tied in a ponytail, sits at the reception desk. Seeing the elevator doors open, she stands up and asks, "Who are you looking for?"
The person ignored her and walked straight inside. Three people in dark jackets followed behind, walking quickly. The receptionist caught up with them and said, "What are you doing? You can't come in without an appointment!"
The man pulled an ID card from his pocket and flashed it in front of her. The receptionist froze; she recognized the words: Shenzhen Municipal Public Security Bureau Economic Crime Investigation Division. Her hand hung in mid-air, her mouth agape.
In his office, Liu Zhenxiong, around fifty years old, was wearing a dark blue polo shirt, had a large belly, and a tightly strapped belt.
He was on the phone, speaking loudly and laughing heartily. The door opened, he turned around, saw who it was, and his smile froze.
"Are you Liu Zhenxiong?" the man asked.
Liu Zhenxiong put down the phone and stood up. "It's me. Who are you?"
The person who arrived showed identification. "Shenzhen Municipal Public Security Bureau Economic Investigation Detachment. You are suspected of commercial defamation, unfair competition, and organizing organized crime activities. This is an arrest warrant. Please cooperate with the investigation."
Liu Zhenxiong's face turned pale. He opened his mouth, but no words came out. His hands began to tremble, and he took a step back, bumping into a chair. The chair tipped over with a loud thud. People outside heard it and ran over to see what was happening, but were stopped by the three men in jackets.
"Please cooperate and don't interfere with official business."
Liu Zhenxiong was taken away. As he passed through the corridor, the employees all stood up and looked at him. He didn't look up, keeping his head down, but his legs were weak and he couldn't walk fast. Fortunately, two people supported him so he didn't collapse to the ground.
If Ling Yun saw this scene, he would probably say, "I still prefer your unruly self. This kind of behavior doesn't suit your image as a big shot in both the underworld and the legitimate world."