- Edited
BlackStarDeceiver
There are many ways for WN to earn money. However, there were 6 big systems used.
Make a book and sell it. This is Amazon. Gravity Tales (Webnovel's sister company) aimed at this.
Donation. Very few people donate. Ask those free software maker. This is 'Gift' system in Webnovel. Remember only paid SS are real donation.
Premium Unlock. Pay as you read. This is what Webnovel used. You have mentioned its weakness. However, Webnovel's financial department knows better. Sigh... Freemium Games had showed how this is successful. While Qidian is very successful in China. As in other thread... The problem for me is the pricing.
Patreon System. Warning. I am proponent of this system. This is a combination of Donation and Whaling. This is a proven method which many fans-translation used. However, most fans-translator didn't pay the Original Chinese authors that made this could be done (This is illegal to publish actually.). This is used at WW with a problem too. However, personally I prefer this.
Subscription. Like what you said. Kindle Unlimited are this. However, this made another problem. MANY authors didn't get the benefit. So you will end with certain novel. Why Harry Potten in KU, that is Amazon gave 'subsidy' for the reader. There is a negativity. This system would 'encourage' word counts cheating more like in Kindle Unlimited. Authors would write 'stupid' words since most read based on number of words reads. Another problem. Webnovel is FAR smaller than Netflix or Spotify. It might be doable, but WN needed to grow first. This also didn't respect fast translation. Webnovel could to prolong a translation project. So rather than translating LoHP as fast as WN could, they would translate 3 chapter per week. (12 per month for example) and make you subscribe for longer. There is also this bad possibility of a reader would only subscribe after a novel completely translated, this making translating 2000 chapters novel costly and unprofitable than 10 chapters novel. So... this is also bad. Other problem would appear from sharing the money. LoHP is very popular. What about some originals? What about free writers of fanfiction? Erotica? BL? It would drive some authors away... At pay per read system, you pay for what you read. Using this also will cut many people who only wanted to read 1 novel.
Ads. This is use in Wattpad and RR... However, that is the quality. You get free writer who want to promote their novel to you. Quality writer will take their book from the platform and publish it on Amazon or traditional publisher. It turned the site into Alpha Site. If you didn't pay, then you are the product. Wattpad added adsharing which make author make more chapter with less contents so you will have to see more ads.