A first occurred this week at the opening of the Sharjah International Book Fair’s program for publishing industry leaders: Wattpad was mentioned admiringly. The president of the International Publishers Association, Elsevier senior vice president Michiel Kolman, told several hundred publishers, agents, and rights specialists, “The vast volume of content uploaded weekly to platforms like Wattpad is staggering.” He added, “It’s also proof that—thank goodness—young people aren’t just slumped in front of Netflix. They’re also writing.”
Another first: Wattpad has created a pay-to-play option that removes advertising from the site and apps. Wattpad Premium charges $5.99/month or $59.99/year, but free access remains for all—just with ads.
Furthermore, Chinese online retail giant Tencent has invested $40 million in Wattpad as part of a $50 million venture capital deal, valuing Wattpad at $400 million, according to sources speaking to Globe and Mail reporters Sean Silcoff and Shane Dingman (paywall). Also revealed: Wattpad generates $20 million per year in revenue in advertising and licensing, a figure that’s growing by some 100 percent each year.
We asked Wattpad whether the new premium subscription puts money in writers’ pockets, but they declined to offer an on-the-record response. However, conversations with their team lead us to understand that subscription revenue will primarily support the company’s expenses. (Currently, Wattpad offers earning opportunities for writers with strong followings who are designated Wattpad Stars; also, Wattpad Futures allows readers to “pay” their favorite Wattpad writers by watching videos inserted between chapters in stories.)
The Globe and Mail article notes that 10 percent of Wattpad’s staff was laid off this year; presumably subscription revenue will offset the costs of the 100+ staff members that keep the platform serving 60 million active users monthly. Also, some of the subscription income might sustain Wattpad Labs, which creates new Wattpad products and vehicles. Wattpad Labs recently released the Tap and Raccoon apps.
Bottom line: Years ago, Wattpad co-founder Allen Lau mildly scandalized an audience of trade publishers at a BookExpo conference by telling them that the way to monetize Wattpad would become apparent in its own good time. Clearly, the time has arrived, and this year, we’re watching several revenue-related developments in Wattpad partnerships (including the offer of book contracts to platform authors) and Wattpad Studios (which continues to roll out new Hollywood development deals). In our interactions with the company’s leadership in Toronto, we note a keen awareness that the writers (who always retain the rights to their work) are the foundation of everything the platform does. Wattpad Premium is but another step in the company’s maturing capability to stabilize and support its growth.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
