The leading platform for digital literature in China released its financial report for the first half of 2021 on Monday, showing stellar revenue growth and modest improvements in its active readership base.
The firm, Tencent-backed China Literature, posted total revenue of 4.43 billion yuan ($683 million), representing a year-on-year increase of 33.2%. Net profits stood at 1.08 billion yuan, marking a drastic improvement from the same period last year, in which the platform incurred overall losses of 3.31 billion yuan.
Founded in 2015, China Literature has benefited from a close partnership with domestic media giant Tencent to become the dominant provider of online reading content, a sector that has grown rapidly in China over the past several years. The firm completed an independent listing on the Hong Stock Exchange Kong in 2017 worth over $1 billion, marking the biggest IPO ever in the country’s online publishing sector.
After focusing on improvements in content quality, digital recommendation and free-to-read businesses, total monthly active users of the company’s online services during the first half of 2021 expanded by 3.7% to reach 232.7 million.
According to a statement by China Literature CEO Edward Cheng, the firm “made further upgrades in content, platform and ecosystem. More young writers joined [the] platform, creating innovative content and revitalizing the platform.”
Just one year ago, the platform posted huge losses after pandemic lockdowns impacted key aspects of its operations and a coalition of authors fought against what they perceived as an unfair compensation structure. The company is navigating shifts in the online publishing industry, finding itself increasingly squeezed between a consumer base that has come to expect free digital entertainment and independent content producers that claim a greater share of the profits.
Adding to the challenges faces by China Literature, domestic antitrust regulators have clamped down on the media industry recently, slapping the firm with a fine in December 2020, along with domestic tech giant Alibaba.
In an attempt to expand and diversify its business, China Literature has been working to develop its presence in overseas markets, focusing particularly on North America. WebNovel, the company’s international platform, currently offers 280,000 original works published by writers in foreign readership markets, as well as 1,700 translated Chinese works.
As of June 30, 2021, the total number of writers participating in the China Literature platform stood at 9.4 million, with a total of 14.5 million works currently available.