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  • Keep it FREE for everyone, $6.95 Monthly Subscription to read ahead & ad-free

How about using Crunchyroll "freemium" business model to generate revenue while keeping everything FREE to readers?

Freemium is a pricing strategy by which a product or service (typically a digital offering or application such as software, media, games or web services) is provided free of charge, but money (premium) is charged for additional features, services, or virtual goods.

How does it work for Crunchyroll anime?

Free for everyone (with ads)
$6.95 a month for Premium membership (no -ads, watch it 1 week early)

The result:

Crunchyroll Surpasses Over One Million Paid Subscribers

2012: ~125,000 paid subscribers
2013: ~250,000 paid subscribers
2014: ~480,000 paid subscribers
2015: ~740,000 paid subscribers
2016: 1,000,000 paid subscribers

Just from subscription alone, CR is making 1 million x $6.95 a month x 12 months = $83.4 million USD

How it would work for QI:

1) All Novels are FREE (with ads) like it is now

2) For those who have the money, they can purchase the premium version which cost $6.95 a month.

In returns, they would get these benefits that free readers do not: Ad-free and Read ahead several chapters

Crunchyroll is making more than $83.4 million a year from just subscription revenue. Add in ad-revenue, they could be making $140 million a year.

Even if QI is only 5% of Crunchyroll with 50,000 paid subscribers, that is the equivalent of $4.17 million USD in subscription revenue. There is also ad-revenue from the free readers.

I believe the bosses are going the patreon route, ie. bonus chapters locked behind spirit stone and make ss purchase-able. Or at least that's what I think it will be.

Benefits of keeping everything FREE (and allow those who can afford it as $6.95 paid subscriber) versus a paywall.

-free readers will still generate revenue through ads (with paywall, many readers will use aggregators)

-$6.95 paid subscription will generate a lot of money (Crunchyroll is making $83.4 million a year from paid subscription). Even at 5% of CR size, that is $4.17 million a year.

-Keeping everything free means aggregators will not become popular. Paywall will drive many readers to aggregators. We definitely don't want to see that happen since it would be a very bad thing for the translation community.

-Keeping everything free means helping spreading the popularity of Chinese novels. Think of it as culture soft power for China. Japan has anime, manga. South Korea has webtoons, tv dramas and kpop. So keeping novels free instead of paywall will help with culture soft power.

    Why would some readers choose to pay $6.95 to upgrade to Premium Membership?

    1) To support the authors/translators/editors/webnovel.com

    2) Ad-Free experience

    3) Read ahead several chapters

    4) Get more Power Stones to vote for the Novel Power Ranking (I'm pretty sure a Premium member would get more Power Stones compare to a free reader). It's fair that each day, a Premium member gets 10 Power Stones while a free reader get only 1 or 2.

    5) They make a lot of money so $6.95 is nothing to them.

    6) They want QI to translate more novels (QI makes more money = more money to translate more novels)

    I also thought about this model. It would benefit customers and the company, but I don't think it would benefit the individual authors, translators, editors, etc. How would Qidian divide up the subscription profit amongst the authors, translators, editors, etc.? Currently many translators have their own Patreon account giving advance chapters to their patrons. Why would people continue to donate to them individually when they can advance chapters for all webnovels for so cheap via subscription on Qidian? It would turn the translators into an Uber driver/Amazon Turk where each person gets the same low pay despite the level of popularity/service while the company is the one to profit.

      i'm happier with the add's ( i alway's view the add's on my daily reading as it's only 15 sec's out of you life and i can't understand way people moan about them ) and patron system,
      sub's and VIP will, in fact, make more people use pirate sites to read, to be honest,
      i haven't always liked the way Qi has acted, but I have never, not agreed that they should make money from their novels as they need to run the site, pay the tl'ers etc
      yet at the moment there are still loads of problems with the site like coding, the heavy usage of Lmtl by some groups or they are really just bad at checking/ editing their works as that wreck some works

      i'd be happier with QI selling the novels as epubs at the end of arc's or every 1-200/300 pages at a fair price as i only follow a very few book every day ie 1-3

      ( i do have a huge save list that once I finish the other works I may read so bookmark them but will not be reading for a bit)
      also, it would be nice if they restarted the anime/Dong Hua side and that could be done via youtube with it also being driven by ad's as a lot of Chinese stuff is there already and some is loads better then some Japanese anime and I've watched loads and I mean loads on my anidb site I'm at 267 days watch in real time of anime and Dong Hua

        JWPark

        Why wouldn't it benefit the authors? Chinese authors get a cut of the revenue that QI makes. The more money that QI makes, the more money the authors will make.

        As for how to divide the profit, it is not that complicated. Using a hypothetical example of $300,000 monthly pool to be divided among the authors with the authors getting a share based on how many chapters are read

        Author A: get $2,000 that month (from having 100,000 chapters of his/her novel read that month)
        Author Z: get $4,000 that month (from having 200,000 chapters of his/her novel read that month)

        So popular authors get paid more.

        As for translators, many readers donate to the translators they like through Patreon to show support, not necessary for the advanced chapters. Even if QI has advanced chapters for Premium members, many donators would still continue to donate to the translator since they want to support the translators.

        In addition, translators could post more advanced chapters compare to webnovel.com
        For example, if webnovel.com is 7 chapters ahead for Premium members, translators could reward their donators with 12 chapters ahead.

          I think you might be looking at things too simplistically. What I mean is that a subscription model wouldn't benefit the authors as much as paying for their work individually. You can see that in China and Korea, where companies and authors choose to sell readers individual chapters, arcs, or books instead of subscriptions. Would a popular author like IET get more by splitting $6.95 amongst hundreds of other authors (even if its based on the proportion of his popularity) or having readers that like his work directly pay only for his work?

          If you look at other industries that have adopted the subscription model, it's always the individual artists that lose out. For example, look at Spotify. Quote from Digital Music News (https://www.digitalmusicnews.com/2017/05/16/spotify-audiam-low-rates/), "In February 2017, a single ad-supported stream generated $0.00014123 on the streaming service. This means an artist would earn $100 in mechanical royalties after 703,581 streams." Imagine instead of streams, it was downloads. Even a tenth of the number of downloads on ITunes, the artist would make more than $100.

            @JWPark I have to agree, this is why I don't understand the fact that the web novel when fully finish or when big arcs are finished epub's aren't released at a cheap/low price.
            I say low price as not due to the quilty of work but for the fact if you sold them at £2.00-4.00 or close to that (as all the basic work ould have been done already ie the tl+ editing when posted on the site in the 1st place )
            everyone work makes more money as your making the pie bigger as they say, as before I've spent more on donations etc with groups just for a few pages also as a techie POV your basically hosting 1 copy of a book and it download Mulitple times if everyone gets past the greed bit selling more epubs you could flood the market and not make it worth pirating them .
            ok there will always be some that don't want to pay, but most people would if the stuff is priced fairly and that way the writers/tl'er's and qi would make more money across the board

            JWPark

            I guess you left out the subscription part of Spotify and only focus on the ad-supported one.

            100 million streams on Spotify = $0.5 million in payment

            https://www.digitalmusicnews.com/2016/05/26/band-1-million-spotify-streams-royalties/
            'My Band Has 1,000,000 Spotify Streams. Want to See Our Royalties?

            Total number of streams: 1,023,501

            Total revenue: $4,955.90

            Specific time period accounted: 10/15/2013 – 2/15/2013

            (March, April, May periods not yet reported; estimated)

            Average per-stream payout: $0.004891

                Subscription revenue from music streaming is a life saver for the music industry. Revenue is growing 17% this year.

                If you haven't heard, the music industry has amazing revenue growth thanks to subscription music streaming.

                Music artists make more money when the music industry make more money. A growing pie = more money for all involved.

                Likewise, QI authors make more money when QI make more money.

                https://www.recode.net/2017/9/20/16339484/music-streaming-riaa-spotify-apple-music-youtube-2017-revenue-subscription
                The music business is growing again — really growing — and it’s because of streaming

                More than 30 million people are now paying for a subscription streaming service in the U.S., which pushed streaming revenue up 48 percent, to $2.5 billion, in the first half of the year. Streaming now accounts for 62 percent of the U.S. music business.

                And that’s pushing the overall music business back up again, after a fall that started in 1999, with the ascent of Napster, and didn’t stop until a couple years ago. Retail sales were up 17 percent, to $4 billion, and wholesale shipments were up 14.6 percent, to $2.7 billion.

                JWPark

                How do you know the author will make less with monthly subscription than a paywall?

                The only stats that matter is TOTAL REVENUE since authors get a cut of the total revenue. If monthly subscription + ad revenue makes more money compare to paywall per chapter, then authors will get more money under monthly subscription + ad revenue model

                Paywall will literally drive away a big majority of the readers. QI won't be able to monetize from these readers.
                Freemium means that the free users will be monetize through ads.

                Free (with ads) + monthly subscription for premium service will generate the most revenue.....compare with a paywall that will drive away 90% of the readers.

                The business model that generate the most revenue will provide the most money to the authors.

                  Everyone is welcome to their own opinion. I did not mean to offend you and simply stated my own opinion. I do not know for sure what will be best for Qidian and its authors, as I believe you do not know either. I just assumed that you opened up the discussion to have an open discussion, instead of only accepting opinions that agree with your own. I have already offered up my own ideas/suggestions in a separate discussion and its up to Qidian if they find any of them to be of use. Wishing you a happier life!

                    JWPark

                    I'm not offended. We just discussing.

                    What is best the readers and the website is the best for the authors too. Not using the best business model just because the authors might make a tiny bit less income is short sighted.

                    Losing 80-90% of the readers to aggregators (with the paywall system) is not a good thing.

                    Let's assume you are right that paywall will generate more money for the authors compare to ads + monthly subscription of $6.95 for Premium membership. Hypothetical $23,000 a year under paywall for popular author I Eat Tomatoes compare to $20,000 a year from ads + $6.95 monthly Premium. Let's assume that's he's making $1 million a year on Qidian in China.

                    Would it make that much of a difference to his income?

                    $1 mil + $23,000 (from webnovel paywall business model)

                    vs.

                    $1 mil + $20,000 (from ads + monthly Premium of $6.95)

                        Qidian International needs to keep in mind that this is the English market where monthly subscription for entertainment dominate.

                        Movies/TV show: Netflix, Hulu use monthly subscription
                        Music: Spotify, Apple Music use monthly subscription
                        Anime: Crunchyroll, Funimation use monthly subscription
                        Korean drama: Dramafever, Viki use monthly subscription
                        Ebooks: Amazon Kindle Unlimited $10 monthly subscription

                        Newspapers like New York Times and The Washington Post use monthly subscription for digital versions.

                        Let's assume that QI will have 2 million users in the future.

                        Let's assume that 7.5% (conservative estimate) of the users will subscribe to the $6.95 a month.

                        That's 150,000 paid subscribers at $6.95 a month x 12 months = $12.5 million in revenue

                        There is also the Ad-revenues generated from the 1,750,000 free users.

                          ssound5rs not that I read your ideas because I decided to not care, but 2 million users are utopia. If you look at the reddit subscribed users, which amount to 23k active and inactive. So lets assume we have 4 times more silent readers, then we will never reach your estimated 2 million users.

                          I don't even think that the growth period of web novels will reach a user amount of 2 million.

                          Just to give some feedback for this hypothesis, I think qidian and a lot of people overestimate the market right now

                              Do you even know the impeding sh*tstorm that may happen XD

                                Web Novel Novel Ask