Photo: Qidian Founde Luo Li

By Chi Yi
June 3, 2013

Qidian (起点), China’s largest online literature site, is in the midst of a scandal after it was reported that its founder, Luo Li (罗立), was arrested for selling copyrighted material belonging to Qidian’s parent company Shanda Literature. 

While Luo’s case could be yet another example of disrespect for intellectual property in China, Qidian has actually shown a viable online model that sells books at prices low enough to discourage piracy, while at the same time providing a respectable income opportunity for authors.  

When Qidian was founded in 2002, people were skeptical that writers could make any money by selling books online. But by the time it was acquired by Shanda in 2004, it had become the 35th most popular Chinese website with over 1 million registered readers and about 20,000 writers. 

The Qidian model lets writers submit stories that readers can download for free at first. If the stories gain a lot of attention, Qidian will then allow the author to become a VIP member and start charging for their work. When this happens, readers are charged 2 fen for each 1,000 words of a story they read (1 fen equals 1/100^th of 1 yuan). Readers can download part of a story for free and then pay for the rest in installments once they reach a certain point. 70 percent of the money goes to the writer, with Qidian taking the rest. The price for readers is almost negligible at just a few yuan for a full-length book, but it adds up for writers if they can capture a large audience.

Qidian has also established various reward schemes to encourage writers. For example, every VIP member can vote on their favorite novels each month. The winning authors then get bonuses of up to 10,000 yuan in addition to extra attention for their stories. There also exists a “tipping” system allowing VIPs to give writers extra money directly or buy votes for them. As a result, writers will do everything they can to please their readers.

This system has, against nearly everyone’s expectations, made millionaires out of authors. At the end of 2012, a “rich list” for Chinese literature was unveiled. 31-year-old Zhang Wei (张威), who goes by the pen-name Tangjia Sanshao (唐家三少), was listed as the richest man in China’s online literature world with 33 million yuan in total income over the preceding five years. He began his career as an online writer in 2004 and has since written an average of 10,000 words per day. When asked what it was like to write 26.9 million words, he replied, “My hands are sore.”

But while Qidian has produced several famous writers, the overall quality of the works on the site has been criticized. Since the system rewards writers based purely on sales, it encourages them to pander to the maximum number of people with entertaining, but formulaic storylines. For instance, a typical Qidian novel will feature uniformly gorgeous female characters that will inevitably fall for the hero, who is so powerful and talented that he defeats all his foes with ease.

Many believe that this is changing though because of the site’s success. People with diverse backgrounds are entering the Qidian circle and going beyond fictional novels. For instance, one Qidian writer used to be the top securities analyst at Qingdao Damo Investment and has begun writing on China’s stock market.  

But perhaps the most controversial aspect of Qidian is its copyright policy. If an author wants to get VIP status and charge for their work, they must give Qidian the full copyright and ownership. This is apparently part of the reason why Luo Li and the rest of Qidian’s founding team left the company earlier this year in order to start a new literature company with Tencent. The new site would supposedly have a copyright policy more beneficial to authors.

However, the new site may never get a chance to take off. Shanda has said that starting a new literature company would violate a non-compete clause in the contract Luo signed with them. Shanda has threatened legal action should the company go-ahead, but now that Luo has been arrested, he may not even get that far.

Links & Sources
Beijing News- 从起点看网络文学崛起：商业模式前无古人
China Tech News - Shanda Acquires Qidian
iRead - 一个码字的是如何赚到3300万的
Tech in Asia - Report: Qidian Founder Arrested, Ugly Rumors May Implicate Shanda, Tencent