NABC Chapter 149 A Crazy Idea: Making Free Novels!
Chapter 149 A Crazy Idea: Making Free Novels!
Chapter 149 A Crazy Idea: Making Free Novels!
Shen Yan was looking forward to Tang Lou's surprise and excitement upon hearing the appointment, but to his surprise, Tang Lou showed no joy whatsoever.
He didn't accept the appointment letter. Instead, he remained silent for three seconds, and the first thing he said stunned Shen Yan.
"President Shen, I don't want the position of president of Coolcat." Tang Lou's voice was frighteningly calm. "I want to concurrently serve as vice president of Alibaba Literature, in charge of Shuqi Novels. If possible, I hope to use my Coolcat president stock options to exchange for a portion of Shuqi Novels' equity."
Shen Yan's face showed an expression of disbelief. During this period, he had also served as the president of Alibaba Literature and had a deep understanding of its subsidiary, Shuqi Novels.
He didn't understand why Tang Lou would give up his position as president of Coolcat Video and instead want to take on the role of vice president of Alibaba Literature.
The two are not comparable in status.
Shen Yan wasn't angry. Instead, he patiently explained and advised, "Tang Lou, do you know what the current situation is for Shuqi Novels? Its DAU (Daily Active Users) is less than three million, its market share is less than one-tenth of Yuewen's, and it lost 200 million last year! KuMiao Video's DAU has already exceeded 100 million, and it's projected to make 2 billion this year!"
"I know." Tang Lou stood up and walked to the floor-to-ceiling window. "But Mr. Shen, you're looking at the present, I'm looking at the future."
He turned around, his eyes sharp and menacing: "In 2017, China had 7.51 million internet users, including 7.24 million mobile internet users. But how many paid readers were there? Less than 80 million! Why don't the remaining 600 million read books? Because it costs money."
Tang Lou picked up a whiteboard marker and wrote down a series of data on the whiteboard in Shen Yan's office:
China Literature Group's monthly active users: 1.75 million (2016 annual report)
iReader Technology's monthly active users: 1.04 million; Shuqi Novels' monthly active users: 0.28 million; Potential free reading users: 6 million+
"These 600 million people represent the future market." Tang Lou drew a huge circle on the whiteboard. "We don't want the red ocean of 80 million paying users; we want the blue ocean of 600 million. Free reading, GG monetization, traffic is king."
"Of course, most importantly, I want to build an IP copyright arsenal that can rival China Literature Group."
.
"As the head of Coolcat, you should be well aware of the importance of IP copyright reserves. And Shuqi Novels is the content moat that I want to build for Coolcat's future."
Tang Lou elaborated on some more forward-looking concepts such as short dramas and AI comics.
In order to achieve those long-term plans, the current foundation is to build up the market for free novels.
Shen Yan's breathing quickened: "Free? How will the authors make money? How will the content quality be guaranteed?"
"Five yuan guaranteed per thousand words + Google Ads revenue sharing." Tang Lou had already prepared his answer. "For every thousand words an author writes, we guarantee five yuan. If their book gets a lot of clicks, the Google Ads revenue sharing could be ten or even a hundred times the guaranteed amount. As for content quality..."
He paused, then gave a meaningful smile: "Mr. Shen, what do you think of workers in third- and fourth-tier cities..."
What do delivery drivers and small shop owners want to read? Is it profound literature for artsy types, or a feel-good story of a hero returning to find his daughter living in a doghouse?
Tang Lou, with his past life experience, knew all too well how Tomato Novels would crush Yuewen's daily active users in the future.
Free novels are an inevitable trend and will definitely capture the majority of the market. After that, as long as they integrate Alibaba's various channels, they will have traffic and users, and there will be countless ways to make money.
Similarly, as long as the market grows, great authors will naturally come to work there. In his previous life, Tomato also produced many masterpieces.
Moreover, novels are merely a traffic-generating entry point; for the future of short dramas, IP rights will be the real money-making model.
Shen Yan remained silent for a full minute in response to Tang Lou's groundbreaking proposal.
"I need data to support this," he finally said.
"Give me six months," Tang Lou said decisively. "In six months, I will bring Shuqi's DAU to ten million. If I fail, I will voluntarily give up all my stock options and leave Alibaba."
Tang Lou wagered the president of KuMei Video and 2 million yuan worth of equity in exchange for the vice president position at Alibaba Literature and control of Shuqi Novels.
Shen Yan trusted and supported Tang Lou very much, giving Tang Lou some time to turn his plan into a proposal. Shen Yan personally took him to report and advocate for it.
Three days later, the Alibaba Digital Media and Entertainment Group held a meeting.
Seven people were seated around the oval conference table.
Shen Yan (CT0 and head of the digital commerce sector, president of Alibaba Literature), Yu Yongfu (chairman of Alibaba Digital Media & Entertainment Group), Yang Weidong (rotating president of the class committee), and four senior vice presidents.
Shen Yan projected the Tanglou design onto the large screen.
The meeting room erupted in chaos.
"Free reading? Has Tanglou gone mad?" A vice president in charge of finance was the first to question. "We've calculated that for the free model to be profitable, the value of each user's GG (Gold) must be more than three times that of the ARPU (Average Revenue Per User) of paying users! That's simply impossible right now!"
"And the content quality will plummet." Another vice president with a content background shook his head. "Without a payment threshold, why would authors bother to carefully polish their work? It'll all become filler and feel-good content, and our brand will be ruined!"
"Most importantly, this will offend the entire industry." Yang Weidong frowned. "China Literature Group is currently valued at HK$50 billion and is Tencent's core asset in the content field. By offering free content, we are declaring war on China Literature and on Tencent."
Yang Weidong looked at Tang Lou, the young man, and his first impression of this super rookie from Cool Cat was very good.
Although Tanglou's plan was crazy and even a bit far-fetched, the higher-ups were still quite tolerant of Tanglou.
Yu Yong's tone was gentle: "Tang Lou, your abilities in the variety show field are obvious to all. 'Go Fighting!'..."
Shows like *Heart Signal* and *Rock & Roast* have garnered over 10 billion views, *The Big Band* has a 9.2 rating on Douban, and *Roast!* earned over 300 million yuan in a single season. Why insist on venturing into the quagmire of online literature?
All eyes were on Tang Lou.
He stood up, not looking at the PowerPoint presentation, but looking at everyone present.
"Distinguished leaders, I have three questions," Tang Lou's voice was clear and forceful. "First, Kugou Music is currently engaged in a copyright war with Tencent Video. How much was the exclusive rights fee for a popular TV series three years ago? How much is it now?"
Someone answered, "Three years ago, a single episode cost one million; now it costs eight million."
"Yes, it's increased eightfold." Tang Lou continued, "Secondly, how much will it cost to produce an S-level web series?"
How long is the cycle?
"The cost per unit is between five and eight million, and it takes at least a year from project initiation to launch."
"Okay." Tang Lou nodded. "Then, the third question: If we had the copyrights to 10,000 novels, and adapted them into short dramas, with each episode costing 50,000 yuan and a production cycle of one week, we could release 100 episodes per week, totaling 5,000 episodes per year. How can traditional long-form video platforms compare in terms of content production efficiency and cost?"