Finding the right way to monetize content that was previously available for free is a tough job to do, but Wattpad believes they have found the right way to do it.
The Toronto-based entertainment company has announced it will be expanding its beta program Wattpad Next into the U.S. and adding exclusive paid content to the platform. There are hundreds of millions of stories to read on Wattpad for free, but Wattpad Next allows users to purchase Coins and then buy chapters or full stories from an exclusive list of writers. The model allows Wattpad to collect a small portion of revenue while readers have the chance to support their favourite writers.
“It’s important that the majority of stories are available for free,” says Seema Lakhani, Wattpad’s Head of Product. “This program is bringing on some exclusive content, but we want to make sure there is great free content as well as content that enables writers to get paid for their work.”
Wattpad Next launched in beta in Canada, parts of the U.K., Mexico and the Philippines last month, and now the program will expand its beta to Wattpad’s largest audience. The U.S. audience for Wattpad is over 13 million, a large chunk of the platforms 70 million monthly users.
Readers will be able to purchase Coins in packages ranging from 99 cents to $7.99. Right now, there are 50 exclusive stories available on Wattpad Next, and that will surely expand as more users begin to support their favourite writers. The types of writers invited to the Next program is diverse and is not entirely dependent on popularity. The criteria that guide whether a writer can join Next is based on “a mix of editorial and data” according to Lakhani and can take what’s trending and what kind of genres and being engaged with the most into account.
“The variety that exists in the content is really important for us,” says Lakhani. “Writers have different focuses on length—some focus on a particular arc or others have stories that lend themselves to a longer sweeping epic. This model should help support all of those styles.”
The majority of revenue earned from the purchase and spending of coins is going to the writers themselves, according to Lakhani, though they could not share specific details right now. Models such as Wattpad Next have popped up before, with the streaming site Twitch being a great example. There, viewers can subscribe (or directly donate) to their favourite entertainer by paying a small fee. The entertainer then gets to keep half of the funds.
However, on Twitch, as a streamer becomes more popular, they can negotiate better revenue sharing terms. Wattpad has confirmed that all Next writers receive the same amount of money from purchased content and there are no specialized partnerships yet. Wattpad is also exploring other ways to earn Coins other than purchasing, such as rewards for reading or publishing stories.
What this new monetization strategy may be the most helpful for is to gauge what content different demographics are willing to pay for. Close to 1,000 Wattpad stories have been turned into published novels, TV shows, or movies, so if partnering organizations can directly tell how much an audience is paying for a story, they may be more likely to work with a writer.
“Wattpad users around the world have overwhelmingly embraced the chance to support their favorite writers through the Wattpad Next (beta) program,” said Allen Lau, CEO and co-founder. “This program is part of our commitment to helping writers earn money from their stories, monetizing stories both on and off of Wattpad.”