What is the difference between reading, palm reading, and Chinese online strategies?
At present, with the gradual end of the era of traffic exposure, the digital reading industry has entered the second half. More and more Generation Z are entering the market, the fan economy is rising rapidly, and a new era of online literature is coming.
However, the serious problems of piracy and infringement, the rise of the free online text model, the saturation of user time, and the weakening of the IP effect of the head web text are still emerging, which have always plagued the three digital reading platforms of Yuewen, Palm Reading and Chinese Online.
To this end, each of the three giants is looking for new growth points in the industry trend, trying to break through and seek change.
Reading bets on the entire IP industry chain,
Expand revenue model
Tencent As early as 2014, it offered 5 billion to acquire Shanda Literature, and integrated with Tencent Literature into Yuewen Group, which unified management and operation of Qidian Chinese.com, Creation Chinese.com, Novel Reading.com, Xiaoxiang Academy and other online literature brands. In November 2017, it was successfully listed on the Hong Kong Stock Exchange.
However, its performance after listing was not as good as expected. Taking the first half of 2020 as an example, its revenue during the reporting period was 3.26 billion yuan; since the acquired Xinli Media’s revenue and operating performance in the first half of the year did not meet expectations, it recorded a provision for impairment of goodwill and trademark rights of 4.41 billion yuan.
Reading frankly stated in the financial report that the epidemic and the macro environment have had a negative impact on performance, but the structural problems accumulated in the past few years have caused the company’s market share to gradually decline and weakened its competitive advantage.
After that, Yuewen bet on the creation of an IP matrix, and gradually shifted its focus from online reading to copyright operation. Its IP development includes publishing, film and television, animation, audio, games, IP commodities and offline consumption formats, etc., transforming content .
In August 2021, China Literature’s 2021 semi-annual report showed that the company’s current revenue was 4.34 billion yuan; its net profit was 1.08 billion yuan, and it lost 3.3 billion yuan in the same period last year, turning losses into profits year-on-year.
Judging from the financial report, online reading is the main source of income for China Literature. The overall user scale decreased slightly, but still reached 230 million.
However, its IP paid reading is facing a bottleneck. Due to the rise of the free reading model in recent years, there has been a serious loss of users who paid for reading. The average number of monthly paying users in the first half of 2021 was 9.3 million, a decrease of 1.3 million compared to the same period last year.
Industry analysts said that in the future of online reading, whether it is free reading to attract user traffic for advertising monetization, or paid reading to screen users who are willing to pay, there is no doubt that after the user increase faces the ceiling, it will pay more attention to the quality and quality of users. sticky. What attracts users is, in the final analysis, works.
“The whole industry chain operation of Yuewen’s bet can first obtain traffic through free reading, and then realize the building of the popularity of a single IP, and link with Xinli Media to increase the value space for post-production film and television production. However, most of Yuewen’s current investment is still In the layout stage, there is a lack of liquidity in the short term, and the final result requires long-term observation.” The above-mentioned industry insider said.
The domestic market is saturated,
Palm reading and overweight overseas market business
The company’s revenue and net profit in the first and second quarters of 2021 both increased.
As for the reasons for the decline in performance, the company explained that it was mainly due to the increase in investment, personnel investment and R&D investment during the reporting period.
Among them, Tencent acquired and integrated China Literature Group; AlibabaVigorously support its reading platform Shuqi; BaiduShares in Seven Cats Reading, etc.
At the same time as the giants entered the game, the scale of the domestic online text market was also close to saturation, and the growth rate gradually slowed down. In this context, the competition between platforms has become increasingly fierce.
Therefore, the layout of overseas business has become a new choice for Palm Reading. It promotes the export of domestic online texts to overseas by improving translation technology and expanding translation languages, and at the same time promotes the production of overseas original works, and conducts batch translation of online texts under new technologies such as AI to form content scale.
In the 2021 semi-annual report, Palm Reading stated that the company’s overseas business revenue in the first half of the year was 148 million yuan, a year-on-year increase of over 100%, and its overseas version of the novel reading app iReader has covered more than 150 countries and regions around the world; , and its new paying users exceeded one million.
Some industry insiders pointed out that the overseas market of Palm Reading is mainly based on the transplantation of domestic content to overseas markets. “In the early stage of this model, the growth rate was relatively fast. After the stock consumption was completed, a better content connection and output were not formed, which made it difficult to maintain the content supply and only formed a short-term boom. In the long run, this situation It also cannot take root in the local characteristic culture well, which is not conducive to the development of the local content creation ecology.”
Chinese online borrows Metaverse to reverse the decline in performance,
Further progress remains to be seen
In 2021, the most popular concept is the Metaverse, and Chinese Online, which focuses on the field of digital reading, has also achieved a stock price surge through this craze.
Since the end of October 2021, Chinese Online has published content about the Metaverse on investor interaction platforms many times; benefiting from this, the company’s stock price has risen by more than 200% in the following half month.
According to the Unshared News reporter’s incomplete statistics, Chinese Online answered a total of 52 questions about the Metaverse on the investor interaction platform. It said that it has applied for trademarks such as Chinese Metaverse, IP Metaverse, and 17K Metaverse. The company attaches great importance to Metaverse and is researching the development of trends, paying attention to the upstream and downstream of related industries. At the same time, it can continue to provide IP, audio products and interactive reading products for Metaverse to enrich the construction of virtual worlds.
