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Tuchong, one of the top three domestic image service platforms, officially announced a change of ownership.

According to the National Enterprise Credit Information Publicity System, recently, there have been business changes in Shanghai Tuchong Network Technology Co., Ltd. (hereinafter referred to as "Tuchong"), the operating entity of Tuchong. The original wholly-owned shareholder Douyin Co., Ltd. has withdrawn, and Beijing Xueyun Ruichuang Technology Co., Ltd. has been added as a shareholder with 100% shareholding. At the same time, the company's legal representative and several key personnel have changed. Founded in 2009, Tuchong was initially a professional image photography service community, which gradually developed into an image community service website encompassing personal image management, image search, online communication, and other functions. It has three product businesses: Tuchong Community, Tuchong Creative, and Tuchong Premium.

In addition, Shanghai Yingmai Culture Communication Co., Ltd., a subsidiary of Tuchong, is the copyright operator of the well-known commercial image library IC photo (formerly "Oriental IC"), which is jointly controlled by Tuchong Network (95% stake) and Shanghai Eastday Network Co., Ltd. (5% stake). With Douyin's withdrawal, after this transaction is completed, platforms including Tuchong and IC photo will change hands.

ByteDance sold its first investment

In 2009, Tuchong.net was officially launched by Shen Zhenyu, a graduate student in the Computer Science Department of Peking University, positioned as a photography enthusiast community. In 2014, Zhang Yiming invested in and acquired Tuchong.net, which had only been registered for two years.

Thus, Tuchong.net became an important source of image materials for platforms such as ByteDance's Toutiao. In 2016, Toutiao, entering its fourth year of development, had accumulated 600 million activated users, with the average daily usage time per user second only to WeChat, and was in the midst of an explosive growth phase. Although the data looked impressive, Toutiao's shortcomings in original content continued to attract criticism and scrutiny from the outside world. In July of that year, Toutiao announced a strategic investment in Oriental IC. As one of the few major transactions in the history of domestic image copyright, this move was seen as an important step for Toutiao to enter the market for original content and copyright content transactions. According to media reports, this was the first investment and acquisition initiated by Toutiao since its establishment. However, based on public information, ByteDance's acquisition of Tuchong.net predates its deal with Oriental IC.

But it can be basically confirmed that this acquisition focusing on the image field was indeed ByteDance's first external investment. After acquiring Oriental IC, ByteDance stated that Oriental IC would operate independently, but in terms of equity relationships, Oriental IC was subsequently merged into Tuchong after the acquisition. A few years later, the Oriental IC brand was renamed and upgraded to "IC photo." With the increasingly hot market for image copyright transactions and relying on Tuchong's years of experience in image information distribution and Oriental IC's expertise in image copyright transactions, Tuchong has continued to grow based on ByteDance's vast active user base and powerful algorithmic capabilities.

According to public information, over 20 million photography enthusiasts have joined Tuchong, including 8 million photographers, 800,000 contracted photographers, and over 5 million contributors. The Tuchong image library boasts 460 million licensed images. In terms of copyright resources, in June 2020, Tuchong became an official partner of Adobe Stock in China. Globally, Tuchong is the exclusive agent in China for many world-renowned news agencies and top photography image resources, representing the visual copyright resources of over 300 resource providers. In the early stages of the acquisition, news image copyright resources were a specialty of IC photo, and some media reported that IC photo once accounted for 10% of the market share in the news image sector.

In June 2017, Oriental IC fully integrated its platforms, including high-end creative images, low-profit images, news image centers, and the Tuchong community, to launch the Tuchong Creative website, positioned as a comprehensive creative materials library. Additionally, IC photo focuses on event image copyrights and is the official image partner of various important events and teams, including the Chinese Football Association Super League, Chinese Football Association Cup, Chinese Football Association Super Cup, and Qingchao League, providing comprehensive visual marketing services. In comparison, Visual China Group integrates over 540 million high-quality images, videos, music, and other content, making it one of the largest digital copyright content platforms globally and a leading player in the domestic image copyright trading market.

Furthermore, Quanjing.com, Nitu.com, Yitu.com, and Zhanku.com also occupy a certain market share. Despite the numerous players, Tuchong holds a top-three position in the industry due to its scale in image copyrights and user base. With this transaction, it can be said that this is Tuchong's second "sale." Douyin has completely withdrawn, and the acquirer, Beijing Xueyun Ruichuang Technology Co., Ltd., operates the one-stop design platform "Jishi Design." Although both parties have not disclosed the specific details of this transaction, prior to it, Tuchong completed a change in registered capital, increasing it from RMB 20 million to RMB 80 million. Thus, ByteDance's first external investment target in its history has finally been sold.

The business of graphics and texts is no longer appealing

2014, when ByteDance acquired Tuchong, was a pivotal year in ByteDance's history. ByteDance's move was closely related to the development status of the text and image information industry at that time. In August 2012, the first version of Toutiao was officially launched. With its unique algorithm distribution system, Toutiao successfully emerged from a host of mobile news and information products. After two years of development, its user base rapidly exceeded 100 million, with monthly active users exceeding 40 million. During this period, Toutiao completed multiple rounds of financing in succession. In June 2014, Toutiao announced the completion of its Series C funding of USD 100 million, with an estimated valuation of approximately USD 500 million.

However, a fact that was difficult for many content producers to accept was that Toutiao itself did not produce any content. Under the decentralized UGC and PGC models, users contributed vast amounts of content to the platform, which was then distributed and disseminated using machine algorithms. At that time, the platform was flooded with numerous controversial copyright contents, including image copyrights. Institutional media outlets that had invested significant costs in content production reacted most strongly. That year, due to content copyright issues, multiple institutional media outlets publicly denounced Toutiao's content model and even went to court, straining relations to the breaking point. Toutiao, with its core feature of distributing text and image content, had to pay a higher price to compensate for its lack of content procurement, with images being a crucial aspect.

It was urgent and necessary for ByteDance to acquire Tuchong and integrate it into its content ecosystem. On the one hand, it could address the copyright risks associated with the massive dissemination of images on the platform. On the other hand, it could provide content creators on the platform with more comprehensive content creation tools. This would further enhance the security of image content copyright distribution on the platform, improve content production efficiency, and enrich the platform's content ecosystem.

Aligned with the demand for information equity in the mobile communication era, the rise of content and information platforms such as Toutiao ushered in a golden age for the dissemination of text and image information. Data shows that by 2019, in the seventh year since Toutiao's launch, it had 120 million daily active users and 260 million monthly active users, with users accessing the app an average of 12 times per day, leading the industry. This was Toutiao's peak moment. However, audiences' attention and time were also being diverted by more diverse communication media and content, and the disruptive impact of short videos was inevitable. Leveraging its successful implementation of machine learning technology on mobile devices and the resulting personalized information distribution capabilities, Douyin took over from Toutiao, becoming a giant in time-killing entertainment. Traditional image libraries, constrained by their inherent attributes, would only continue to lose ground within the ByteDance ecosystem.

There are three reasons for this: first, the image copyright trading has fully entered the low-profit era, reducing its business value for ByteDance; second, the regulation of the content industry is always under high pressure, and the value and risks of image trading do not match; third, the business model of image copyright trading is relatively monotonous, with a low ceiling and limited imagination. Multiple photojournalists interviewed by Digital Light-Year stated that in recent years, the number of news image invitations from Tuchong and IC photo has significantly decreased, reducing the platform's presence, and the commissions earned by image creators are negligible. As text and image content gradually declines, it is only natural that the image copyright services that depend on it also weaken. It seems only a matter of time before Tuchong is "liquidated" by ByteDance. Diving headfirst into the surging tide of traffic, ByteDance is bidding farewell to the glorious "old" era of text and image content.

ByteDance's investment fatigue and mediocrity

Although Tuchong was ByteDance's first acquisition target just two years after its establishment, it was not prominent in ByteDance's business landscape or investment history. Even this transfer did not stir up much buzz on social media. For ByteDance, this may just be an outdated product eliminated after a "shutdown and transfer." However, at a deeper level, it starkly reflects ByteDance's investment fatigue and mediocrity. On January 19, 2022, multiple media outlets reported that ByteDance would entirely dismantle its investment business, affecting approximately 100 employees. In response, ByteDance stated that the company had decided to strengthen its business focus, reduce low-synergy investments, and disperse strategic investment department employees into various business lines to enhance strategic research functions and business coordination.

In fact, reviewing ByteDance's investment history, with the exception of the acquisition of TikTok, most of its other investments have been unremarkable, and many have failed. Today, TikTok is thriving in overseas markets but has also faced suppression due to local political, legal, cultural, ethical, and commercial uniqueness, even being jointly suppressed in some regions, with a difficult situation to resolve. However, they represent the tide of the content industry within a certain period, far removed from the traditional era of text and image content. Peripheral businesses with poor synergy, such as Tuchong, failed to catch the new wave of the content era.