What is the correct approach for online novels to go overseas?

As China's Internet overseas expansion has entered a stage dominated by content-based products, discussions on the overseas expansion of online novels have become increasingly heated. This article explores the correct approach to the overseas expansion of online novels based on the underlying logic of the overseas expansion of content-based products.

Starting from 1998, the first generation of online literary works represented by "First Close Contact" and "The Legend of Sun Wukong" emerged. After 20 years of development, there are now a huge number of online literary works, forming a huge group of authors and readers.

According to the latest 2017 China Online Literature Blue Book:

As of December 2017, the number of online literature users in China reached 378 million, the total number of original works on 45 major domestic literature websites reached 16.467 million, and the online literature creation team has reached 14 million people. Not only that, the industry has now formed a stable and sustainable online literature production mechanism, and IP copyright operations are becoming increasingly perfect.

At the same time, Chinese online literature also began to spread overseas. As early as 2010, Chinese online literature began to become popular among novel lovers. It first spread in the Asian cultural circle, including Southeast Asia and East Asian countries such as Japan and South Korea, and then to English-speaking countries such as Europe and the United States. Now it is slowly spreading around the world.

Therefore, many people call Chinese online literature one of the "Four Great Cultural Wonders of the World" along with American Hollywood blockbusters, Japanese anime, and Korean idol dramas.

However, compared with the domestic market, the overseas online literature ecosystem is still in its infancy. Just like the domestic market over the past decade, it faces many difficulties but also many opportunities. The domestic online literature market has basically been divided up by giants led by China Literature and iReader. The competition is fierce and it is a red ocean. However, in the overseas market, both giants and startups have equal opportunities in this blue ocean. For many small and medium-sized companies that are at a disadvantage in domestic competition, this is undoubtedly an opportunity to overtake others.

So, what is the key to the success of online literature going overseas? What is the correct approach for online novels to go overseas? In the article "The underlying logic behind content-based products going global" - looking at how content-based products such as TikTok, Toutiao, and UC Toutiao go global, I discussed the three angles of content production, content distribution , and content consumption (monetization) for content-based products going global. Based on the underlying logic of content-based products going global, this article explores the correct approach for online novels going global.

1. What is the correct approach to producing content for online novels going overseas?

Content production is the core link of content-based products. The problem that content production for online novels going overseas solves is how to form a stable online novel content supply chain overseas. The business model of online novels is paid serialization, and IP operation is formed later and will not be discussed for now.

Therefore, serialization is the core feature of online literature. To meet the requirements of serialization, the content supply must have a continuous production capacity, and produce content quickly, in large quantities and with high quality. Among them, "fast" is the core requirement. I will explain why later.

After nearly 20 years of development, the domestic online literature market has formed a mature supply chain and maintained a stable production frequency.

According to industry insiders, domestic online writing editors now require online writers to write at least 5,000 to 6,000 words per day, but this is unimaginable for overseas authors. If we say that the development of domestic online literature has gone from the Stone Age in its infancy to the Iron Age in development, and then experienced the Golden Age to enter the current big IP era, then the current overseas online literature ecosystem is equivalent to the initial stage of domestic development.

What is the first thing to consider when an online literature platform goes overseas?

Determining the platform positioning is the foundation and the prerequisite for content production. Compared with the domestic preference for comprehensive products, overseas fiction products tend to be more segmented. For example: Qidian International and Gravity Tales under China Literature Group focus on fantasy, while Tapas focuses on two-dimensional animation. Although the types of works on these platforms are diverse, it can be seen that they are still developing around their own main direction.

For online literature platforms going overseas, only by determining the positioning and content direction of their own platforms can they take a differentiated route that is different from competitors. Especially for companies that are not giants, only by determining the positioning of the content platform can they concentrate resources to quickly trial and error, quickly adjust and iterate to determine the direction, and thus carry out content production.

So, what is the correct approach to content production for online novels exported overseas?

The author believes that for a budding market, it is undoubtedly inappropriate to directly copy the domestic model, because foreign authors cannot keep up with the writing speed of domestic authors. Therefore, in addition to original content production, another way is to localize domestic works and quickly accumulate content.

The key to content production lies in originality, and the decisive link in originality lies in gathering original authors. Localized translation of works is important for accumulating content during the initial startup period, and it can also quickly assist in verifying the development direction of the content platform. However, in the long run, the success of online literature platforms going overseas depends on their ability to build a sustainable original system.

First of all, translation requires solving copyright and localization issues, which is very costly. Even wealthy companies like China Literature Group and Qidian International are working on original content, because only by building an original production system can sustainable development be achieved. For content-based products, content is king, and authors are the key to producing content. It is no exaggeration to say that whoever owns the original author will win the world. The key is to build a growth system for original authors. Whoever can make authors willing to gather and create on this platform can quickly gather authors.

Why is it important to emphasize “speed” in the initial production of online content?

Because we can get inspiration from the early development of domestic online literature. The key to those writers who later grew into so-called online literature masters standing out was not how well they wrote at the beginning, but because they wrote faster than others at the beginning.

As mentioned earlier, the core of the business model of online literature is serialization. Authors who write quickly can satisfy readers' demand for continuous updates, which is a key to their success without them realizing it. Therefore, in guiding the growth of overseas authors, we need to encourage them to continuously speed up the update process through methods such as update lists , and slowly foster the growth of the entire market.

All of these problems cannot be solved by just spending money. They require hard work in operations and understanding the needs of overseas creators and satisfying and guiding them. Analogous to the first batch of creators more than a decade ago, they actually did not write for the purpose of making money at the beginning. Before Qidian launched the VIP payment system, online writers did not make money. Many people do it out of interest and passion, but the introduction of a paid reading system later on further stimulated the motivation of creators.

For overseas online literature platforms, whoever can meet the material and spiritual needs of creators will be able to quickly accumulate authors and works. This is of self-evident importance in the current Internet era where "the fast fish eats the slow fish."

2. What is the correct approach to distributing online novel content overseas?

The author believes that the core issue to be solved in the distribution of online novel content is what kind of product form and content format should be used to promote online novels to overseas readers.

So, what is the correct approach to distributing online novel content overseas?

I will discuss the content distribution of online novels overseas from two aspects: the product form and the content form of distribution.

1. What is the product form of content distribution for online novels going overseas?

We can see from the development history of domestic online literature that the development of the Internet has had an impact on the product form of novel content distribution. The golden age of online literature, from its birth in early 1998 to 2008, was the PC era of online literature. During this period, both authors and readers wrote and read on computers.

The emergence of smartphones marks the beginning of the mobile Internet era in China. The carriers of online novels are mainly presented in the form of mobile web pages and APPs, further expanding the market for online literature. A large proportion of the emerging readers are middle school and elementary school students.

As WeChat has become a super APP and formed a WeChat marketing ecosystem centered on official accounts and mini-programs , new ways of distributing novels have also emerged. Users only need to open the WeChat public account and click on the attractive title to read the latest novel pushed that day.

When you have finished reading the novel and want to continue reading the remaining chapters, click "Read original text" to quickly jump to the novel's WAP page, click the recharge button to pay for reading, and keep following the updates. This kind of cooperation between self-media public accounts and online literature platforms is a win-win approach for content providers and traffic providers, and it provides online literature platforms with an important content distribution channel .

When we shift our focus from domestic to foreign countries, we will discover the uniqueness of the overseas Internet ecosystem. With the popularization of smart phones and the reduction of traffic charges, many overseas developing countries have directly entered the mobile Internet era, such as India and some Southeast Asian countries. Developed countries have also entered the mobile Internet era long ago. Therefore, the content distribution product form of online novels going overseas should be mainly mobile, including APP and WAP pages.

(1) APP

The APP has comprehensive functions, mature user habits and good user stickiness. Secondly, the APP can be stored locally, run faster, save more traffic, and can be operated offline or access local resources. Given the complex Internet environment in various overseas countries, APP is a product form that is more suitable for retaining users for a long time.

The overseas APP ecosystem is dominated by the two major application stores , Google and Apple. Especially for domestic online literature companies that are not familiar with the overseas market, they must pay attention to complying with the rules of Google Play and APP Store. The main thing is that the scale of the novel's content must be truthfully filled in when rating the content, and overly revealing erotic content must be put on the shelves with caution.

Secondly, pay attention to the latest rule changes for overseas applications and respond promptly. For example: GDPR (General Data Protection Regulation), which has been discussed a lot recently, requires overseas companies to respond to and comply with the requirements of GDPR. I have discussed in detail in my previous article how to list APPs on overseas app stores, how to deal with GDPR, and how to localize products and operations. Please see my review and localization of APP listing on overseas app stores one year later.

(2) WAP page

The advantage of WAP pages is their good compatibility and they can be used on various platforms. Compared with App, WAP pages do not need to be downloaded. On the WeChat portal or browser , users only need to click on the link to obtain the service. It has a longer usage time and traffic diversion capability. Operations and promotions based on official accounts can quickly reach users. This is why WAP page diversion based on the WeChat ecosystem is so popular now.

Although there is no super app like WeChat overseas, there is no way to directly copy the WeChat public account WAP page distribution method. However, by using this idea through distribution platforms such as browsers, information streams , and social media , the goals of traffic generation and monetization can also be achieved. Especially in the exploration of overseas markets, WAP pages, due to their strong traffic diversion capabilities, can quickly verify the direction of content and promptly adjust the direction of content and product improvement, which is an advantage that APP does not have.

In addition, since overseas application stores have strict review mechanisms for product content, in terms of content verification, larger "pornographic" content can be promoted and verified through WAP pages.

Therefore, I believe that the current product form of online literature overseas content distribution is that the PC side serves as a platform for authors to create and accumulate online literature content. WAP pages are used to attract traffic, speed up content distribution and monetization, and ultimately user retention and further monetization are achieved through APP.

2. What is the content format for distributing online novels overseas?

The content format for overseas distribution of online novels solves the problem of how to package the content to present it in a way that suits the habits of overseas readers. According to the author's observation, since overseas readers have long been deeply influenced by European and American dramas, led by the United States, the characteristics of European and American dramas are clearly presented in novel reading products, which is quite different from Chinese online novels.

1. Differences in the description of online article section names: In China, people are accustomed to dividing novels into parts and chapters, while overseas people like to write the "part" of a novel as "season X" and the "chapter" as "episode X".
2. The difference in the updating frequency of online literature: At present, domestic online literature has long formed a daily update mode, and the updating frequency is very fast, but the updating frequency of overseas online literature is still mainly based on the American drama mode of one season a year and one episode a week, in order to adapt to the current cognitive level of overseas readers.
3. Differences in user usage habits: Due to the dominance of Hollywood film and television culture, overseas online literature apps also like to use large movie- style posters as backgrounds, and add relevant background information cards to the novel reading page. Therefore, product design must be localized according to the overseas cultural environment and cannot be copied mechanically. It must conform to the usage habits of overseas users.

3. What is the correct approach to monetization (content consumption) of online literature going overseas?

From content production to content distribution, and finally the process of readers consuming content, for online literature companies the question is how to monetize it.

How big is the profit margin for online novels?

According to the 2017 financial report of China Literature Group:

In 2017, total revenue reached 4.1 billion yuan, an increase of 60.2% over 2016; gross profit increased from 1.1 billion yuan in 2016 to 2.1 billion yuan in 2017, an increase of 96.8%.

The number of Internet users overseas is several times that of people in China, and it is still a blue ocean. You can imagine how huge the profit potential is.

So, how is the profit model of online literature formed?

When we look back at the formation of the domestic online literature business model, we will find that Qidian’s introduction of VIP reading fees was an important turning point. Paid reading not only provides authors with income and stronger motivation to write, thus promoting the development of content production, but also enables online writing platforms to find a suitable profit model and develop rapidly.

In 2015, with several online novels successfully adapted into web dramas and becoming a huge hit online, online literature entered the era of big IPs where light and shadow coexist. Especially after the online novel adaptation of "Nirvana in Fire" became a hit, the adaptation rights of film, television and game IPs of online novels, which used to cost only hundreds of thousands of yuan, instantly became a hot commodity. As the value of the people skyrocketed at a rate of several times or even dozens of times, IP copyright operation became another important way to make profits.

This can also be confirmed from the data released by China Literature Group. According to China Literature data, the income of online literature currently has two main channels: online reading and copyright operation.

Now that we understand the formation of the domestic online literature profit model, what is the correct approach for online literature to monetize overseas (content consumption)?

The author believes that the overseas Internet environment is relatively complex, and the specific conditions in each country and region are not the same. When deciding on monetization, one must consider factors such as the target region’s users’ consumption levels, payment habits, and payment methods, and benchmark against domestic profit models. Since IP copyright operation is the profit model for online literature in the later stage of development, for online literature products that have just been launched overseas, online paid reading and advertising will be the main profit model at present, and specific models will be derived according to the specific conditions of different markets.

For example: Users in the European and American markets have strong purchasing power and high willingness to pay. As long as you launch corresponding online content based on user preferences and guide users to pay for reading, you can make a profit. However, there are abundant entertainment products in Europe and the United States. In addition to facing competition from competing products, online literature also has to compete with short videos , live broadcasts and other products for user time. At this time, it is very important to understand user needs and delve deeply into a specific online content market segment.

In contrast, in India, a hot spot for China's Internet expansion, users' consumption levels are low, their willingness to pay is weak, and income from paid reading is limited. However, given India's huge number of Internet users and its potential for continued growth, advertising monetization through the accumulation of user numbers is an approach that can be considered.

Take Qidian International as an example: In addition to the pay-per-chapter model, users can also unlock the paid reading chapter model by watching advertisements. This is a good profit model for regions with poor paid reading such as India.

3. Future potential and problems of online literature going overseas

At present, the basic price set by domestic online literature websites for a novel is 0.3 cents per thousand words. The prices of overseas online literature products are even higher. Take Tapas as an example: it costs about 0.25 US dollars per thousand words, which is equivalent to at least 1.6 yuan in RMB. That is to say, if a domestic online writer updates 6,000 words a day, he can earn 0.18 yuan from a reader; if an overseas author updates 6,000 words a day, he can earn 9.6 yuan from a reader.

Although the production capacity of overseas authors is still far behind that of domestic authors, from the comparison of texts, we can intuitively feel how much advantage overseas authors have over domestic authors in terms of income. The income of authors is directly proportional to content production, and content production determines the success or failure of the development of online literature. In addition, although the unit price is not very high, as the number of online literature fans increases, the income from online reading of online literature will be an astonishing figure.

Take China Literature Group as an example: its online reading revenue reached 3.42 billion yuan in 2017, an increase of 73.3% from 1.97 billion yuan in 2016, which shows the potential of paid reading. At the same time, the number of active users of China Literature Group increased to 190 million in 2017, of which active paying users increased to 11.1 million, and each of these active users paid an average of 22.3 yuan per month.

Based on our previous analysis of some current reading products , we can see the huge potential in terms of overseas online literature user growth and payment ability.

Moreover, there are some obstacles in the development of paid reading in the domestic market:

• The first is that the idea that “the Internet should be free” is deeply rooted in people’s minds, and online literature platforms will lose users because of the pressure to regain readers. Although the concept of paying for content is gradually being accepted by people, it will take a long time;
• The second more serious problem is the rampant piracy in the country. If I can find free content on the Internet, why should I pay for it?

This year, the country began to pay attention to genuine products, but combating piracy is also a long-term process that requires efforts from all parties. However, the overseas market is relatively purer than the domestic market, the copyright environment abroad is better, and foreign users are more receptive to paying for content, which is a good thing for online literature going overseas.

However, online literature going overseas also needs to face some problems. Whoever can solve the author problem of content production and whoever can quickly solve the problem of localized payment will be able to make the first pot of gold. For content-based products such as online literature, gaining an advantage in content and building a deep enough moat can establish a first-mover advantage.

Source: Overseas Operations