Wu Wenhui, the "Godfather of Web Fiction," Has Nothing New to Say About the Future | 20 Years of Web Fiction ⑪

In a sense his job is already done: he wrote the business model for the industry and put it on the fast track to pan-entertainment.

On November 8, 2017, China Literature listed in Hong Kong. The share price rose more than 86% on the first day of trading. It has since slipped from a high of nearly HK$100 to around HK$82, which puts the net worth of China Literature CEO Wu Wenhui, 39, above HK$2.7 billion.

As always, Wu Wenhui's answers were safe and even. He still kept his eyes closed while answering questions — it helps him think, people say.

His industry doesn't seem to have changed much either. Ever since VIP paid reading arrived in 2003, web fiction has been able to pay for itself. Over the past 15 years it has grown steadily and evolved slowly in nearly every other respect. Wu Wenhui himself has no interest in adding any room for imagination to it: "I think the next five years will still be an extension of mobile internet and IP."

Everything looks exactly as expected — so much so that this listing (the most successful mainland Chinese IPO in Hong Kong) can only serve as a footnote to the legitimacy of web fiction: "In the past, web fiction was still relatively in a subcultural state... Through China Literature's listing, everyone has truly seen that the web fiction industry can actually grow very large."

Wu Wenhui was the top science-track scorer in Xianju, Taizhou, in 1996. After graduating from Peking University's computer science department in 2000, he took a technical job at a company called Zhaohua Technology.

A year later, in 2001, he and several fellow internet users founded the Fantasy Literature Association on the Xilu BBS. In 2002, built on that association, Qidian was formally established. In October 2003, Qidian launched its VIP paid-reading system, which set the business model for web fiction for the next 15 years — and earned Wu Wenhui the title "Godfather of Web Fiction."

He had his strategy. In 2003 his peers were skeptical of VIP paid reading: they thought small-payment tools were immature and that internet users had not yet formed the habit of paying. VIP payment went ahead smoothly anyway. Readers proved willing enough to pay, and before long an author's monthly income could reach about 1,000 yuan.

He also had his luck. In 2004, Shanda bought Qidian. Backed by capital, Qidian expanded fast and secured its place in male-oriented web fiction. In 2008, Shanda folded Qidian and several other web fiction sites together into Shanda Literature. Shanda Literature then bought up web fiction sites in bulk, turning sheer scale into the industry's competitive barrier. In 2013, Wu Wenhui quit; the following year he joined Tencent Literature. In 2015, Shanda Literature and Tencent Literature merged into China Literature, the largest web fiction company.

Had Chen Tianqiao not decided so quickly to pull Shanda out of web fiction, Tencent and Shanda would probably still have had a hard fight ahead of them. Had the conflict between Shanda Literature's management and the sites it bought not sharpened, Wu Wenhui might not have left Shanda for Tencent. Had Tencent's foundations been shallower, he would not have handled the twin challenges of mobile internet and pan-entertainment development so easily.

The challenges of that time have turned into a future with predictable returns. The money raised in China Literature's listing will go to expanding the online-reading business; developing pan-entertainment products such as TV dramas and web series; and potential investments and acquisitions. This past July, China Literature invested in quick succession in Wawayu Animation, which produces comics, animation and VR content, and Yinxiong Lianmeng, a voice-acting company. The two deals were worth 50 million yuan and tens of millions of yuan respectively.

But the most successful thing Wu Wenhui has done may be keeping himself, the whole way through, at the head of this industry — or at least of Shanda Literature and then China Literature. Several people in the industry described him to QDaily in the same terms: a strong loyalist streak, a man who prizes brotherhood.

Asked "besides you personally, who else has shaped the direction of the web fiction industry," Wu Wenhui answered: "Mainly it's our team. It wasn't decided by me alone; our team shaped it together. Without them I couldn't have gotten to where I am now. I'm just a representative of this team."

Of Qidian's original founding team, all but one who left early now hold senior posts at China Literature. Shang Xuesong is president of China Literature; Lin Tingfeng is senior vice president in charge of original content; Hou Qingchen is vice president, assisting with original content; and Luo Li is vice president in charge of copyright marketing. According to China Literature's prospectus, Wu Wenhui holds 3.52% of the company, Shang Xuesong and Lin Tingfeng 1.76% each, and Hou Qingchen and Luo Li 0.88% each.

Only one major executive, Liang Xiaodong, comes from outside Wu Wenhui's early founding team. He was CFO of Shanda Literature before taking over the job of former Shanda Literature CEO Hou Xiaoqiang. When Shanda Literature and Tencent Literature merged in 2015, Liang Xiaodong joined China Literature with the same title as Wu Wenhui: co-CEO. In return he received China Literature shares vesting in installments.

Like every trust, China Literature today owns the largest mobile reading app, QQ Reading, along with Qidian, Chuangshi, Yunqi, Hongxiu Tianxiang, Xiaoxiang and several other web fiction sites that together control roughly 70% of web fiction content. In 2016, because China Literature wanted to run and manage its sites as one — traffic allocation, content recommendation and the rest — Wu Wenhui's management team clashed with some of the sites' founders. That June, three people, including Hongxiu Tianxiang founder Sun Peng, resigned together.

None of the founders who left shared in the payout from China Literature's listing.

Like nearly every winner, Wu Wenhui says, when asked about how web fiction got here, that back then he never imagined any of it.

Q: QDaily

A: Wu Wenhui

Q: Looking back at 2002, in light of how things have developed since, what did you completely fail to anticipate at the time?

A: Reaching a scale this big — that we didn't anticipate. Back then it was just a hobby for us. We did feel it would become an important branch of culture someday, but how big it could actually get, we had no idea. We also didn't anticipate that it would have this much impact on the culture industry.

At the time I personally found it very hard to judge. For us it was just a hobby, and we had no idea how big it would grow. Early on I remember thinking: wouldn't it be wonderful if one day we hit 100 million — 100 million in traffic, 100 million in revenue.

But it did happen. At that point we could see that the industry's future was very bright, that there was still a lot of foreseeable room to grow and a lot of potential, so we realized this was nowhere near the end point. As it kept getting bigger, I began to feel that the future scale of web fiction would far exceed what I had imagined.

Then there's its influence. At the very beginning most people saw this as a subculture — fairly lowbrow writing that some internet users might like but that would struggle to be taken seriously. So we thought of ourselves as just a bunch of people online who liked web fiction, entertaining ourselves. Later it gradually became a form of popular culture.

Q: Without the internet, would this kind of popular literature in China have developed anyway?

A: Maybe. Even back then, on Rongshuxia, you could see young writers — Han Han, Guo Jingming, Annie Baobei. You could say traditional literature throws up a new current, or a sharp new writer, every few years anyway.

But a transformation as pure and as thorough as the one web fiction brought might have taken many more years to arrive. The internet is an accelerator.

Q: Was web fiction destined to become an entertainment product?

A: I don't think so. The turn toward entertainment early on came out of a gap, a blank space in the market. As I said, before this there was very little purely entertaining content in society. When web fiction broke out, it threw off all sorts of brand-new ideas and inventions, and the impact on readers was enormous. Someone reading web fiction for the first time, or just getting into it, would think: so novels can be written this way too. That feeling, that inventiveness, was exciting and important.

But I think any literary form diversifies as it slowly develops. Once the volume is large enough, it's like Reform and Opening Up — first you solve food and clothing, and once that's solved people start wanting better quality. That's when works with more depth and meaning appear.

Q: In October 2003, when Qidian first launched VIP, what were you thinking, and what worried you?

A: The simplest thing was that writers had almost no income then. Most of them wrote as amateurs, so the steadiness of their output was a problem. We kept seeing dazzling work on the forums that had an opening and no follow-through, and we felt that wasn't a good way for things to be.

The other thing was that we were an amateur platform ourselves — a hobbyists' platform people had put together out of shared interest — so it carried its own instability. The site would do well for a stretch, then badly for a stretch. So from the start I wanted a stable form: the platform makes money, the writers make money, the readers get something — a structure steady enough to keep running and keep developing over the long term. How far it would develop, I never thought about. In the beginning I was mostly after a healthier, steadier business model.

Q: When did you realize the model worked?

A: Our initial expectations were low enough that in the first month, when users hadn't dropped off and the top-earning writers were making 1,000 yuan a month, we felt this could work.

(A thousand yuan wasn't especially high even then,) but most writers at the time were amateurs, and if writing web fiction on the side earned you 1,000 yuan, for a lot of people that would already feel like plenty. If the writers were satisfied, we figured the model was right.

Q: VIP payment hasn't changed in all these years. Every site lives off this same business model. Do you think it might change in the future?

A: I think it might. Back then that model — serialized updates, pay-per-character and so on — was a response to the fact that online writing wasn't especially abundant and consisted mostly of amateur serials. Second, the payment environment was bad and most people weren't very willing to pay. Things like that were set by the society and the internet of the time.

Now, first, content has become vastly more abundant, so serialization may not be the best model, and not the only model for everything being written. Second, paying has become far more convenient, and paying for knowledge and for content is now socially accepted. So if you were designing a completely new business model at this point in time, I think it would be different from the old one.

Q: What might it look like?

A: More variety in how people pay and buy — so that besides long serialized web fiction, medium- and short-form works, or finished works, can also sell well. And more convenient options and services for readers, things like that.

Q: Why don't completed serials sell well?

A: It's mainly to do with piracy. Once something has been serialized for a while, pirated copies show up all over the internet. So rather than pay a lump sum to read something already finished, some readers would rather find it free somewhere else and read it in one go.

Medium- and short-form works sell badly for the same reason — they can't really be serialized. So they usually get released all at once, and once that happens the piracy outside tends to get worse too.

Q: So is it that these business models can't work, or is it piracy?

A: A large part of it is piracy, though it's also to do with how platforms release content now. Piracy is always, always, always the most fatal thing. Overall I think the reason video and music and the rest have been able to go legitimate and start charging is, in many cases, that the piracy environment improved. So for the content industry, I think the biggest challenge will always be piracy.

Q: You've said there's a difference between ordinary web writers and IP writers. What exactly is it?

A: There's a divide here. An ordinary web novel on a platform won't necessarily be adapted; some suit film and television, some suit games, but not every work suits every kind of adaptation. So I think writers should have a clear-eyed understanding of this and accept that they may run into limits when it comes to IP adaptation.

Q: What kind of work do you think suits adaptation, and what doesn't?

A: As things stand, I think the market basically believes that whatever has high traffic suits adaptation.

Q: So the question comes back to whether the work itself is popular.

A: Along the way you can also see that in practice some content is easy to adapt and some is hard. Mao Ni's work is easier to adapt, while some of the older fantasy works are harder. So there is still a divide there. But as people stop treating traffic as the only measure, I think the divide has narrowed noticeably.

Q: Many people in the industry feel that, seen against pan-entertainment as a whole, web fiction is a small business.

A: It really is a small business — the overall scale isn't large. Downstream, pan-entertainment, film and television and games add up to a market worth trillions of yuan, so I think that's accurate. But it's also very hard to separate from those industries. Web fiction is a huge latent reservoir of content; it feeds a steady stream of fresh ideas downstream and at the same time gives a lot of original creators room to experiment and fail. So I think it's very important, even if it isn't especially profitable or especially large.

Q: Is there a mismatch here — web fiction is the source of the IP, but because other industries produce more value, they end up with more say?

A: Yes. You can see plenty of it. Over the past couple of years the market has generally criticized how many IP adaptations flopped. There's a very clear pattern: because the players downstream have too much say, many of them, once they get hold of an IP, look mostly at how famous it is rather than at what's in it. So when it's adapted, readers don't buy it, because they feel the adapters never understood what the work was.

Their film and television skills may be lacking, but attitude matters more. (By attitude I mean) how they understand the IP — is it purely a symbol of traffic, or do they believe a work is popular for a reason, that there's something appealing in it they ought to dig out and bring to the surface?

Q: I've heard China Literature now prefers to turn an IP into animation first.

A: All I can say is that the domestic animation industry is fairly weak right now. If we want to build up an IP, animation is where we can put in relatively more. That has nothing to do with leverage in the industry; it's purely that we want to do the job better. Compared with film and television, we have too little say and the cost is too high. So we can use animation, where the cost is lower, to bring out an IP better.

Q: Staying with pan-entertainment: in the future, among all the entertainment people consume, what role will web fiction play?

A: Still a very important branch of entertainment consumption. Reading novels, playing games, reading comics — each of these takes up a share of a person's life, and reading should be an indispensable part of the mix. So I don't think it will be the biggest, but it may be the one everybody needs.

Q: Since web fiction is now the source of the whole pan-entertainment industry, will it end up being the key product that shapes the next generation's taste and aesthetics?

A: I'd say literature itself has a broader influence on the thinking of the whole industry, and of humanity — and web fiction is currently the fastest-growing branch of literature as a whole.

Cover image: Fighter of the Destiny (《择天记》)