Wattpad is Democratizing Entertainment with Data-Driven Content

“Technology and entertainment have never been closer together.”

That’s a phrase you might hear wandering through the Toronto offices of Wattpad. The company created a free online community dedicated to the writing, reading and sharing of stories—though executives are quick to point out they are not a publishing company, a distinction that becomes clearer with each new partnership they forge.

Storytellers have been sharing their tales online for as long as the internet has been around, but an argument can be made that Wattpad has cornered the market. Over 65 million unique users are registered on the site, with four million writers churning out over 500,000 chapters of content a day. Wattpadders, as they’re called, are typically on the younger side, which means the content itself also skews younger as well.

The idea of tech and entertainment under one roof is not new. Netflix, Apple and Amazon are all tech-first companies that also entertain users with either original content or licensed programming. The difference is that those companies view each other as competitors, only working together if they can somehow use that temporary friendship to edge past another horse in the race.

Wattpad isn’t here to compete. Their sector dominance and $110 million-plus in funding proves that they are way beyond any relevant competitors. The next step in Wattpad’s digital storytelling domination is helping everyone else win, starting with their users.

Studio Days

Aron Levitz is the head of Wattpad Studios, a division that debuted in 2016 with the goal of operating as a multi-channel network. Wattpad Studios works with the mainstream entertainment industry to co-produce Wattpad stories that can then be transferred to new mediums. In a nutshell, traditional media players can go through Wattpad Studios to access new stories, writers and ideas.

“When you take unique stories with built-in audiences, the data that helps us discover and analyze those audiences will give the TV, book, streaming and film industries a better chance at success,“ says Levitz.

The mantra behind Wattpad Studios, as Levitz describes, is to take content from their platform and bring it to a world where 80 per cent of TV shows are cancelled after one year, and the vast majority of books fail to earn more than their advances.

“If we could change those percentages by a little bit, that’s hundreds of millions back into these industries,” he says. “This can really change the conversation in an entertainment world that’s being disrupted.”

Combining Wattpad’s readily available content with traditional production models is a natural progression for the Toronto company. The platform now has 565 million original stories, giving production houses a large bank of material to unearth a potential megahit. The question is, “where do you start”?

Finding the right stories to bring to outside partners can be a challenge, as anyone who has suffered through writer’s block can attest to, but Wattpad has an answer to that question. The company may describe itself as entertainment-first, but the AI experts and developers building out Wattpad’s backend prove that tech drives the decision-making process.

Data-Driven Validation

Wattpad was founded in 2006, and Studios came along a decade later. But it was halfway between then that Allen Lau, Wattpad’s CEO and co-founder, knew something like Studios was not only feasible but the direction the company had to move towards.

“We recognized that when it comes to entertainment—rather than publishing, reading or writing—what’s the origin of a hit TV show or movie?” Lau asks. “It’s always a great story. We had that in our product already, but at that point, we weren’t ready to take it to the next level.”

When that first light bulb idea for Wattpad Studios came in 2011, the company only had around eight million monthly users. Impressive, yes, but Lau knew he had to scale and acquire more data before it could activate and become a reality. The company was growing exponentially, but it would be three years until a real opportunity to see how Wattpad could leverage its data and content with outside partnerships would come. The unique thing is that Wattpad’s best chance to show its production skills did not come from Hollywood, or anywhere else in North America—it came from the densely populated Philippines.

The Southeast Asian country boasts an incredibly young average age of around 23-years-old for its citizens, but a lot of the TV shows in the country are geared towards its aging population in the form of dry and dense telenovelas. Wattpad figured the market would be a great place to see if the (at this point, still in development) Studios division could make an impact. It made sense, too, as in 2014, the Philippines had the second-most Wattpad users behind the U.S.—five million in total.

TV5, a third-place Philippines network in a three-horse race was looking for anything to help catapult it back into the conversation. It was the first company to work with Wattpad and test exactly how this entertainment company could branch out beyond online stories. The solution to TV5’s woes came from Wattpad’s immense data trove they had been compiling since its launch.

Wattpad’s “data-driven format,” as Levitz calls it, relies on the billion points of data the company ingests every single day. After a quick scan, a single question emerged: in such a young country like the Philippines, why are TV stations playing programs catered to old folks?

Lau and Levitz looked at the top 20-performing stories on Wattpad in the Philippines and chose one to turn into a 22-minute show. It was called My Tag Boyfriend (the full episode can be seen below on YouTube) and had 15.2 million reads on the site. The next week, they would do the same thing with a new show made from a top-rated story. It made sense, but in a country of over 100 million, no outside traditional entertainment companies had even thought to come in and take advantage.

“Hollywood may look at the Philippines differently—we don’t,” says Levitz.

In 2014, Wattpad Presents debuted on TV5. The network jumped up 30 points in ratings, and 250 episodes later, the show remains as one of the most successful youth programs in the history of the country. This was enough validation to get Wattpad Studios going.

“It was a great proof point that data can be predictive in bringing in audiences,” says Levitz. “In a country with a three-horse network race, and with one TV per household, to be able to jump 30 points through data-driven storytelling was a real signal that we could invest in this globally.”

Even though TV5’s huge jump in popularity was an early highest-profile success story for Wattpad Studios, it wasn’t the only one. Novels like The Cellar by Natasha Preston (published in 2014) began as Wattpad stories and sold over 250,000 copies, ending up on the New York Times best-seller list. Anna Todd and her One Direction fanfiction, meanwhile, earned book and movie deals in 2015 after being read over 1.5 billion times on Wattpad.

After that kind of progress, Wattpad knew they needed to legitimize tech and entertainment in their own way with a real launch of Wattpad Studios.

Partners Are Better Than Competitors

Wattpad’s choice to debut this new market opportunity in the Philippines was no coincidence. As an immigrant himself, Lau places a lot of value in catering the content of his site to local audiences. Wattpad launched with 20 supported languages and the company’s ability to localize to any given country has propelled its success.

Levitz echoes this sentiment, pointing to popular-around-the-world Netflix content like Germany’s Dark, Brazil’s 3% or the Columbian Narcos. The rest of the media world is finally catching on to the fact that global audiences like global stories—but this has been Wattpad’s MO for years.

“When you see the success of shows like those, it lets us tune to local audiences as a first step, knowing that the world is more interested in those global stories,” says Levitz.

“Our audience points to the fact that they want diversity. Our data is allowing us to see themes and trends people are interested in globally. We might know that the most read story in India is written by a woman from the Philippines who lives in New Zealand. Would studios have chosen India first? Who knows.“

This hyper-localization is why Wattpad is beginning to work with some of the biggest names in the media production world. During the infancy of Wattpad Studios, the company was engaging in a lot of outbound marketing to see how they could feature their writers in new ways. Now it’s the other way around. In total, close to 1,000 Wattpad stories have been turned into books, TV shows, films and digital media.

“We’ve become much smarter in understanding that each country does things a little differently. We’ve become good at being interpreters of our own data,” Levitz explains. “First thing we do is to help our partner hear how we speak, then hear how they speak. Partnerships are about understanding each other culturally.”

This approach to creating content has resulted in some large-scale co-productions. Hulu, Sony, Netflix, eOne, NBC and more all count Wattpad as a continuing source of content. All of these companies are right in the middle of a serious disruption moment, and Wattpad is here to help.

“The reason we can partner with the NBCs and Sonys is that they have recognized they are in a moment of disruption, and we open up our data to them,” Levitz says. “We’re letting them use data not only in finding a story but developing it.”

For example, Wattpad’s data can tell a Sony rep exactly what part of a story to leave out because it didn’t get much engagement, comments or reads. It might also tell a director that readers connect more with a secondary character than the primary one, so that character should be on-screen as often as possible.

“Because we can ask different questions through our investments in AI and machine learning, we can give these traditional players a different view of data than they have ever had before,” Levitz explains.

That partnership even works with companies that have done more of the disrupting, rather than being disrupted themselves.

“For streaming partners, we can get them a level of data they have never had,” says Levitz. “They might know what stuff people like, but they still need to go out and find a story people want. Well, we know you need a political drama, so here’s 15 that were hot in this country you’re interested in.”

“We can change the conversation from just using data to try and predict what people like, to using that data from the start of the production cycle to the end.”

This approach has catapulted several Wattpad users into stardom. Lau and Levitz mention several times that the end goal for Wattpad is to make their writers’ dreams come true, and they manage those dreams through something called Wattpad Stars. The division is Wattpad’s talent agency, representing and guiding writers through the creative process, opening up doors in ways they might not have been able to do themselves. Katarina Tonks is one of these burgeoning writers; her story Death Is My BFF was picked up by Sony to become a TV show.

“I felt like I was in a community where I could express who I was, and I felt like I could connect with everyone,” says Tonks. “As I was writing, I thought ‘I could do something with this,’ and Wattpad really gave me that opportunity to build an audience and access that publishing and entertainment industry and get beyond that hobby that I had.”

After seven months of keeping the biggest secret of my life…. I can officially announce that DEATH IS MY BFF HAS BEEN PICKED UP BY SONY PICTURES TELEVISION!!!!!!!!! Will be posting my official announcement post on Instagram soon!!!!! https://t.co/bwreBYPYSb

— Katarina E. Tonks (@katrocks247) May 3, 2018

Tonks has gone on to work with Coca-Cola, Sour Patch Kids, Universal Studios and more, and her TV show is wrapping up production now. To go along with that “writers-first” ideology, Wattpad also makes it a point to ensure each writer retains the rights to their stories.

“Wattpad was able to get me connected with the biggest influencers in the industry to things I wasn’t able to reach,” Tonks says.

Critical Mass

One thing still floats over the head of Wattpad and the stories they license for production. They are usually tales written by a young generation, aimed at a young generation. This means a lot of romantic dramas or comedies, or fantasy and fanfiction. To put it nicely, Citizen Kane, they are not—so a lot of the Wattpad-produced content ends up being critically panned.

This irks Levitz a bit because it circles back to the idea of looking at an audience for inspiration and honing in on data-driven content.

“You’re talking about the intrinsic problem with the entertainment industry and why it’s being disrupted today,” he says. “It has been run on peoples guts—’I think this for you.’ The audience can vote now as they never have by choosing where to watch and what to watch. People won’t watch something because seven critics who have been giving you the same thumbs up for 20 years decided for them. They’re not the jury. The audience is the jury.”

For Wattpad, the audience is never wrong. In fact, they can’t be wrong. The latest example of this is The Kissing Booth, a Netflix original movie that scored a solid 13 out of 100 on Rotten Tomatoes. Despite the abysmal score, it made it to number four on IMDB’s overall chart and Netflix’s chief content officer called it “one of the most-watched movies in the country, and maybe in the world.” It began life as a Wattpad story written by 17-year-old Beth Reekles.

For Levitz, the way audiences ingest content has been stale for so long, disruption is long overdue. There’s no need for a critic to tell the world what’s entertaining because data already has.

“Our success metrics should be all about the audience,” he says. “Whether something is critically acclaimed or not, sure that’s nice, but it’s not our goal.”

“Why do I need someone else to tell me what’s entertainment?”

Levitz is right. He, along with Wattpad, isn’t looking for just one glowing review. They’re going for 65 million of them.