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Discussion Starter · #1 ·
How huge is the digital ebook market in China? Tencent purchased the top self-publishing digital literature platform (owner of the web novel hosting site qidian and chuangshi and a few other smaller ones) for $800 million.

Think of Qidian as similar Wattpad but one that generate vastly more revenue and authors are compensated for their writing.

Chinese web-writers are self publishers. The only middle man between the authors and the readers are the novel hosting sites. The authors own all the rights and some authors publish their works on multiple web novel hosting sites to gain more audience. Though some do go exclusive. Revenue is split between the novel hosting site and the author.

http://publishingperspectives.com/2015/03/chinas-tencent-literature-focused-on-exploiting-ip/

Earlier this year Tencent finished the acquisition of Shanda Cloudary, the pioneering Chinese self-publishing and digital literature platform, which includes well-known online literature sites such as www.qidian.com and chuangshi.qq.com. The acquisition was priced at RMB 5 billion ($800 million), according to Sina Tech.

Shanda, launched in 2008, was innovative in a number of ways, not the least of which was enabling Chinese writers to freely publish online and monetize their work through micropayments from readers as well as rights and licensing deals. As of 2010, it commanded 71.5% of the Chinese reading market (according to Iresearch).
http://publishingperspectives.com/2015/06/is-this-the-golden-age-for-chinese-web-authors
Is This the "Golden Age" for Chinese Web Authors?

In fact, there are now so many web-writers in China (in the millions) that they are now "ranked," both by their earnings and number of fans.

On the lowest level is the ordinary writer, also "known as poor guy (or poor guy writer)." They have a limited number of fans, and their work is seldom recommended to others. Their annual income is around 1,000 yuan.

Next up are the Xiaoshen (low rank god) writers with a fan base of more than 100,000 and annual earnings of more than 100,000 yuan ($16,100).

One step further up the ladder are the dashen (super god) class of writers with earnings of more than 1 million yuan ($161,200) with fans counted in the millions as well.

At the very top of the tier are the 20-30 web writers known as platinum authors or zhigaoshen (the Supreme God) class of writers. The 2014 Chinese web-writers list ranks Tangjiasanshao first, with earnings of 50 million yuan (around $8.06 million) per year from royalties, while second and third on the list both raked in more than 25 million yuan ($4.03 million) each.
The ebook market in China evolve totally differently from the U.S./Europe. Instead of ebookstores, it's web novels. In addition, the young generation in China are now reading through web novels. When they publish, it is likely they will do it the same way.
 

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Discussion Starter · #3 ·
http://www.cbbc.org/getmedia/90f952d0-1bf8-4594-972e-afdb324b128b/The-Publishing-Landscape-in-China/

5.4 Business Models for Online Literature

Online literature made available via sites like Qidian tends to begin as serialised fiction that
readers can access without any charge. Once a series becomes popular, it is converted into 'VIP
content' and readers are required to pay to read the latest instalments.
The price of online paid
reading is extremely low by Western standards, as illustrated below, and revenue is split between
authors and website operators.

As early as 2006, Qidian is estimated to have had over 100 million
daily page views and made more than 30 million Yuan (£3.2 million) in profit. Qidian's successful
combination of a 'freemium' approach and a micropayment system was regarded as one of the
most significant commercial innovations made in China that year.

Online mobile reading platforms like Tencent Literature, Cloudary and ChineseAll have all
developed their own user-friendly payment systems in cooperation with mobile communications
companies, which are widely accepted by readers.

5.4.1 Payment System Case Study: Cloudary

The Cloudary platform's business model is built around three revenue models:116

5.4.1.1 Subscription
Readers can pay for content using Cloudary's virtual currency supported by different payment
mechanisms such as Alipay, PayPal, online banking (international bank cards are supported), mobile
phone bills and top-up cards.

Cloudary's payment systems included:

A micro-payment policy:
0.05 yuan (less than 1 pence) per 1,000 Chinese characters (Non-members) ($0.007 per 1000 Chinese characters)

0.04 yuan per 1,000 Chinese characters (Basic members)
0.03 yuan per 1,000 Chinese characters (Intermediate members)
0.02 yuan per 1,000 Chinese characters (Supreme members) ($0.003 per 1000 Chinese characters)
(Membership requirements vary slightly among Cloudary's different websites.)

Other pricing models:

Monthly subscription: (available in Hongxiu, Xiaoxiang, ShuYuan and Jinjiang)

1 Month �15.00 (approximately £1.60)
3 Months �36.00 (£3.80)
6 Months �63.00 (£6.70)
12 Months �108.00 (£11.40)
24 Months �180.00 (£19.10)

(Subscribers may read all chapters of the 'monthly subscribed books'. Prices
vary slightly among different websites e.g. Qidian etc.)

Complete e-book purchase: (available for some completed books i.e. not serialised content):
�1.00 (11 pence) to �10.00 (£1.06), depending on the titles

5.4.1.2 Pay What You Can: 'Reward from Readers'

Cloudary also operates a 'pay what you can' model, giving readers the power to reward specific
authors. Only a low proportion of readers use this option, however, though some readers have
been willing to pay up to 60 Yuan (£6.40) in a month.

5.4.1.3 Advertising

Advertisements appear widely across the Cloudary platform in pictures, texts, links and other
forms. Advertising income from Cloudary's desktop version is more mature than the mobile,
attributed by Cloudary to complications in selling advertising on mobile device screens, but it is
actively trying to establish a revenue stream here too.117

In 2011, Cloudary also sold the rights of 651 of its works, with nearly 100 movies or TV series
adapted from Cloudary works launched or in development by 2013. In China's top 10 most
popular TV episodes in 2011, four were adaptations from online literature, and most adapted
online original literary works originate from the Cloudary platform.
$0.007 per 1000 words = $0.70 per 100,000 words
$0.003 per 1000 words = $0.30 per 100,000 words

Most series that are monetized will have at least the first 100 chapters as free. If a reader want to read chapter 101 and so on, they will need to pay per 1000 words.
 

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Discussion Starter · #4 ·
jlstovall4 said:
Very interesting stuff here. I wonder if this is a look into the US's future.
If the like of Wattpad could provide compensation to its top writers, maybe.

Imagine a world where Wattpad top writers are getting paid millions of USD a year in royalties like their Chinese counterparts.

I imagine that would give Kindle executives a lot of sleepless nights. Kindle future dominant might be threaten by the rise of web novels (if the top web authors are getting the right compensation).

Authors tend to publish where they think will earn them the most money. If web novel publishing one day get to that point in the U.S. like it is in China, it is very possible.
 

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Thanks for posting, that's interesting.

I forgot all about Trajectory. I wonder if they're doing anything.
 

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Discussion Starter · #6 ·

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Discussion Starter · #10 ·
Mercia McMahon said:
The reason that self-publishing dominates via these Wattpad type services is that censorship rules rule out self-publishing, so little to learn here about the US unless you're writing a dystopian novel.

https://www.quora.com/What-is-the-best-way-to-self-publish-an-eBook-for-the-China-marketplace-Is-http-Amazon-cn-the-way-to-go-Should-I-worry-about-my-manuscript-being-pirated
censorship laws have nothing to do with popularity of web novels.

Censorship laws also apply to web novels like they do to print novels.

The reason why web novels dominate digital reading in China is simple. It's $$$.

Authors will tend to go where the money is at. The revenue of ebookstores in China is tiny compare to the huge amount of revenue generate by web novels. Inversely, in the West, the revenue generate by web novels is tiny compare to the revenue of ebookstores like Kindle/Nook/Apple.
 

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To self-publish requires being a publisher, becoming a publisher in China is very difficult. Using a web service is not strictly self-publishing in the eyes of the state and so circumvents the restrictions on becoming a publisher and provides a buffer between the author and the state.
 

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I'm not sure how much this might affect things, but I remember that, when phones came into China, a lot of people forewent the landline for the cell phone. Cell phones and data plans are super cheap and easy to get. You can buy SIM cards from street vendors. You have to register for an internet account, but there are so many people around that it's hard to keep track of who's doing what--and China's still big on paper documents rather than digital files.

As for censorship, the government tries quite hard to shut things down, but again... there's so many people and it's fairly easy to get around the firewalls. At $6/USD per month, my VPN was quite expensive. Free VPNs pop up every day and there are websites that list them. The censorship and police action also varies from province to province. If you're around Beijing, expect more crackdowns. If you're in Kunming like I was? It was pretty laissez-faire.

One main problem for publishers in China is that, on the mainland, copyright doesn't really exist. One needs only to look at the Chinese auto industry to see how effective the laws are...
 

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Has anyone tried to bring US content to China.  Seems there a space for someone to offer translation and placement services to put our English novels onto Chinese reading sites. Of course, getting the money out and protecting copyright would be problems.
 

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Deke said:
Has anyone tried to bring US content to China. Seems there a space for someone to offer translation and placement services to put our English novels onto Chinese reading sites. Of course, getting the money out and protecting copyright would be problems.
There are a couple of services doing that now. The problem is not translating the content, it's marketing after the fact.

Just because it's in Chinese in an online book store doesn't mean it will sell. Just like in the US, you need to advertise to get sales.
 

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Interesting thing about US content to China.

My wife's cousin--who is also a one-book author, at the moment--recently returned to the United States after nearly a decade in China. He married a nice Chinese girl while teaching English in a Chinese school. The interesting thing about our conversations about his teaching... the Chinese people seem to roll their eyes at English, seeing as everyone speaks in Chinese. They find it to be an unnecessary endeavor and a waste of time.
 

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Discussion Starter · #18 ·
http://blog.smashwords.com/2015/12/2016-book-publishing-predictions.html
10. Wattpad will be acquired

Okay, I'm going out on a long flimsy limb here, and I'm doing it without the benefit of inside knowledge. I've always been a fan of WattPad. They're truly a self-publishing phenomena. They facilitate live publishing from writers around the world, and often from writers who aren't yet even thinking of becoming published authors. WattPad is the training ground for the next generation of authors, and they're increasingly being used by established Smashwords authors and traditional publishers alike that want to reach WattPad's burgeoning readership. The most likely acquirer is Amazon, and if that happens the future for large traditional publishers will be in even greater peril than it is today (I'm thinking how large publishers probably kicked themselves for not acquiring Goodreads before Amazon snapped them up). If the large publishers are smart, they'll snap up WattPad because WattPad will give them early access to future bestsellers. But so far, the large publishers have proven themselves bewildered by the indie author movement, and oblivious to what's driving it and how it will disrupt their businesses in the future. [Two quick tips for large publishers: 1. Self-publishing isn't just for authors who can't get a publishing deal. 2. An increasing number of writers aspire to indie-publish as their option of first choice, which means these authors will never enter the slush pile. Amazon understands, and we at Smashwords agree, that the future of publishing is self-publishing. This is why Amazon, or possibly another smart retailer like Apple, are the most likely acquirers of WattPad. It's also worth noting that WattPad has received over $60 million in venture funding. Venture investors want liquidity events -- either in the form of acquisition or IPO.
Tencent might be another potential buyer of Wattpad.

Since the purchase of Shanda Cloudary for $800 million USD, Tencent now owns about 70% of the Chinese self-publishing web novels business. They can use their know how from qidian to make Wattpad thrive:

1. Fan donation to author (similar to Patreon)
2. Ad revenue (this is already happening on Wattpad)
3. VIP microtransactions (for example: first 100 chapters are free, every 1000 words after that will be charged $0.01)

Though the most likely buyer would be Amazon. Wattpad (with author compensation) is a huge challenger to Kindle ebookstore. So instead of waiting for Wattpad to disrupt Amazon ebook selling business, why not be the disrupter instead.

Amazon reacted extremely fast to Scribd/Oyster and as a result KU is now very successful for Amazon.
 

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VEVO said:
http://blog.smashwords.com/2015/12/2016-book-publishing-predictions.html
10. Wattpad will be acquired

Tencent might be another potential buyer of Wattpad.
...

Though the most likely buyer would be Amazon. Wattpad (with author compensation) is a huge challenger to Kindle ebookstore. So instead of waiting for Wattpad to disrupt Amazon ebook selling business, why not be the disrupter instead.

Amazon reacted extremely fast to Scribd/Oyster and as a result KU is now very successful for Amazon.
If Wattpad is acquired in 2016, I don't think Amazon will be the buyer. Amazon already owns WriteOn and, given the long project timelines Amazon is famous for, WriteOn will probably be allowed at least another year or two to grow before the decision is made on whether WriteOn is #1 in its category or has the strong potential of becoming #1. If the answer is no to both, Amazon might invest money in Wattpad's acquisition. Might. (Depends upon how beneficial WriteOn's crowdsourcing of public opinion of successful titles and unknown writers is to future book sales and how much profit potential is involved.)
 
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I just returned from China, after visiting Shanghai and several cities and villages in the south.
It was surprising how many Chinese speak English.
China does business world-wide, so knowing English is a plus.
I had no problem communicating. Many Chinese were familiar with American TV programs, popular music, and current slang.
Smart cell phones are very popular.
I can see why English ebooks are becoming popular.
 
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