A Billion Writers for A Billion Readers


We had chickens when I was a kid.  It was my job to feed them breakfast. Every morning I  scooped a big cup of pellets from the bag and flung the food across the pen; the birds went into a frenzy, gobbling up every little pellet they could find. When the food was nearly all eaten, most of the chickens continued to fight over the last little scraps of dirty, trod-on pellets. Some of the smarter birds looked around for the next wave of incoming pellets, because I always threw a second cup, and when I did, mayhem once again ensued—but the chickens that were ready for it always had first crack at the new food. That’s where the publishing industry is right now—in between scoops.

So who are the “smart chickens?”

The most obvious answer, of course, is Amazon. They’re also the biggest chicken in the coop. But is there any other company out there that has a shot? There will be two things needed to rise above the rest going forward: dollars, and by that, I mean tens and hundreds of millions; and networks, and by that, I mean tens and hundreds of millions. So let’s rule out traditional publishers, even the big multinationals. Sure, they have the money, but their true adoption of technology will come much too late. And their networks are nearly non-existent as loyalty in traditional publishing is based on author rather than brand. Although it’s been established that there is no “print is dead” armageddon on the near horizon, the power of digital publishing, although slow to gain serious momentum, will be the determining factor in who will rule the roost in the future of publishing.

Aside from Amazon, there are few that could take a run at this title. One such company that could is Wattpad. The company just raised 46 million dollars and now has a huge, amazing, concerning issue on its hands. They need to keep their 40 million members happy, and they now have to keep their investors happy, because pension fund investors don’t invest 46 million dollars (actually closer to 70 million to date) because they think you have a really neat idea; they want return on investment, and plenty of it. So how does Wattpad’s founder and CEO, Allen Lau, proceed? The current focus is to build their network to one billion members. “If we can build a strong community optimized for a billion users, then it will be insanely valuable,” Lau told Alec Scott of the Globe & Mail. “Lau has also noted that he plans to explore new avenues for monetization of Wattpad, including branded content and native advertising.”

It’s going to take a very long time to recoup $46 million through native advertising. The true value to investors is the potential network Wattpad plans on creating—but tapping into that network may be another story. A big issue is that Wattpad is currently a proud community of readers and writers where things like revenue streams and regulations would cause quite a stir. A change of ethos by Wattpad would certainly alienate the very community they are trying to enlarge twenty-five fold. Lau has been very careful to speak cautiously when asked about generating revenues from the Wattpad business model. But generating revenue is what Wattpad must do, all while rapidly expanding it’s network; after all, the money-hawks are now watching.

Lau comes from a tech background and not a publishing background, so it is unclear what he is setting his sights on—aside from his desire to build a network of a billion people, that is. But what sort of strategy would be needed to take on the role of a publishing company?

Actually, Wattpad is already a publisher. In fact, they supply everything from the author’s pen and paper to the audience, and they do it all for free. So why not generate revenue from it by taking the next logical steps? The first would be to satisfy its members that the change would not affect the way the core of the community operated, although some change would be needed. Case in Point:

Wattpad’s terms of service agreement

Section 6 – User Submissions and Conduct

Article C)  “you retain all of your ownership rights in your User Submissions. However, by submitting User Submissions to Wattpad.com, you hereby grant Wattpad.com a worldwide, non-exclusive, royalty-free, transferable license to use, reproduce, distribute, display, and perform the User Submissions in connection with the Wattpad.com Website.”


This term would need to change. The “royalty-free” wording would have to be removed and replaced with an amendment that gave set royalties to Wattpad for any monies made from User Submissions. A “right-of-first-refusal” clause would need to be implemented as well. This would affect less than .01% of all Wattpad users and only those generating significant income from their works.

The second step would be to make the changes beneficial to many members of the community while enticing new members and writers into the community. In taking this step, Wattpad would be committing to the process of becoming a major player in the publishing industry. It would need to invest in infrastructure such as printing companies, and though it would not focus on print materials, it would take on the role of print publisher/self-publishing printer for its one-billion-in-the-making network. Operational growth would have to be quite substantial as well, hiring specialized staff to oversee what would need to become a multi-faceted operation. Much of the rest is already in place for Wattpad. Using their metadata, Wattpad can build algorithms based on a story’s popularity to see when, and how many books to print, or at what point a writer should be signed to a book or movie deal. As it is now, publishers and movie companies are trolling Wattpad looking for the next big thing, why would Wattpad not want to take advantage of those opportunities themselves?

“Wattpad also has a serious side as a thriving culture of original writing, with a small but steady flow of authors finding mainstream success with Big Six publishers such as Random House and Harper Collins.” says Victoria James of thegaurdian.

With their increased financial backing, Wattpad now has an opportunity to hybridize the publishing industry; to make it a versatile peer-review system that can give both the author and the reader what they want and how they want it. Now they just have to make a move—because that big chicken in the pen is giving them the eye.

Works Cited:

Dawes, Terry. (Apr. 11, 2014), “Did Wattpad really need to raise so much money?”, Cantech Letter, Web. http://www.cantechletter.com/2014/04/wattpad-really-need-raise-much-money/

Herman, Barbara. (Oct. 23, 2014), “What Is Wattpad? The ‘YouTube For Stories’ Is Transforming Book Publishing”, International Business Times, Web.  http://www.ibtimes.com/what-wattpad-youtube-stories-transforming-book-publishing-1710151

James, Victoria (Dec. 8, 2014), “Amazon goes head to head with Wattpad in battle for fanfic writers”, thegaurdian, Web. http://www.theguardian.com/books/booksblog/2014/dec/08/amazon-wattpad-fanfic-retail.

Scott, Alec. (Sept. 25, 2014), “Wattpad is Not Exactly an Open Book”, the Globe and Mail, Web.  http://www.theglobeandmail.com/report-on-business/rob-magazine/wattpad-is-not-exactly-an-open-book/article20762616/

Williams, Thomas J. ( Apr. 9, 2012) “Surviving “the Printing Industry’s Perfect Storm”—and Its Aftermath”, WhatTheyThink, Web http://whattheythink.com/articles/57160-surviving-printing-industrys-perfect-storm-aftermath/





2 Replies to “A Billion Writers for A Billion Readers”

  1. You have written an enjoyable and thought-provoking essay on Wattpad’s innovative business model and its disruptive potential in the publishing industry.

    You provide a good overview of the company’s core philosophy and its operating strategies and complement this with numbers. Your essay gave me a better grasp of Wattpad as a driving force in reshaping the book business landscape by disrupting the traditional author-editor-reader dynamic. Most importantly, you have convinced me that a social platform connecting “billion of writers” with “billions of readers” through myriads of free stories is more than just a marketing opportunity for publishers: it is an open, democratic writing (and reading) empire that has the numbers to compete with the biggest player in the market – namely Amazon, the “smartest chicken in the pen.” As a matter of fact, the e-retail giant has already made a move by launching its own reading and writing platform, Kindle WriteOn (still in beta-version), manifesting its intention to eat Wattpad’s “grains.”

    You make an interesting point about the possibility of Wattpad absorbing some of the functions performed by traditional publishers/self-publishers, including deploying a printing infrastructure as an added-value service to their loyal online community. Whereas I believe the introduction of a system of royalty payments may still preserve the company’s direct connection between writers and readers, I am, however, thoroughly convinced that “tak[ing] on the role of print publisher/self-publishing printer” would inevitably compromise the relationship with its community. And here is where, in my opinion, your argument falls short. As can be inferred from the essay itself, a key factor of the Canadian start-up’s success is its solid, ever-growing online network. Wattpad, or “the YouTube of stories,” as the company’s former product marketing manager Amy Martin has dubbed it, claims the throne of the Digital Storytelling Kingdom. If they are to retain that throne, they need to be faithful to their truest identity, inextricably rooted in social media.

    I was also intrigued by your speculation about the company’s opportunity to generate new revenue streams in the future. Your focus is on Wattpad’s guarded plans to expand their network and find additional revenues, but it would be very interesting to shift the attention to the side of the publishers themselves. Book- and reading-focused social platforms such as Scribd and Wattpad, to echo industry expert Mike Shatzkin, have, in fact, increasingly captured publishers’ interest as significant marketing opportunities and sources of additional revenue.

    From a narrative perspective, your voice and style are consistent throughout the essay. The opening and closing “chicken” metaphor, while drawing the reader in from the beginning, adds coherence to the text, making it a more engaging piece.

    Overall, this is an original and provocative essay that raises important questions about the impact of digital storytelling in the book industry.

  2. I liked the opening. A little unconventional, but it caught my attention and made me curious to read more. I was left a little confused by the analogy, however, when you did not go on to explain what the chicken feed was in reference to.

    Your answer to the question was Amazon, but then your essay switches to talking about Wattpad, without making an explicit comparison between the two. Why is Amazon the obvious answer? Would Wattpad be competing with Amazon or are they natural partners?

    I was left unconvinced by the argument that Wattpad would move into print, or of the rationale for some of your prescriptions for Wattpad’s success. This part of the essay requires a little more depth.

    Wattpad is a good case study to look at, and considering its core strengths and future directions are worthy of analysis. I think you started in that direction, but missed the opportunity to further explain the rationale for your thinking. In that context, you could have used a few more external sources to help argue your points.

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