NEW YORK, NY - MAY 12: Allen Lau, Cofounder & CEO, Wattpad speaks onstage at the WIRED Business ... [+]
A few years ago, every new business plan you’d hear would be some version of “we want to be the Uber of X” or the “AirBnB of Y.” These days, everyone wants to be the next Wattpad: the company that has come to embody the ethos of the bottom-up community-fueled creator economy. The Toronto-based story platform grew from humble roots as a feature-phone app in 2006 to a content powerhouse that was acquired in Korean tech giant Naver last year for a cool $600 million, then teamed up with Naver’s other digital content service Webtoon to become a two-headed fan storytelling community monster. Together, the two platforms reach 176 million monthly users (94 million for Wattpad).
Creators and readers spend more than 23 billion minutes per month scrolling through Wattpad content: big numbers in an economy where attention is at a premium. It’s also become a key source of entertainment industry IP. One of the hottest series on Netflix this month, Through My Window, was adapted from Adriana Godoy’s blockbuster Wattpad series, and over 1500 stories from the platform have been developed into popular, award-winning content by studios including ViacomCBS International Studios, Sony Pictures Television, SYF, Canada’s CBC and others around the globe.
Today Wattpad CEO and co-founder Allen Lau is unveiling the next stage of the company’s “Grand Plan,” laying out its strategy for systematically developing user-generated content (UGC) into high-value media properties, books, games and more. That’s an inversion of the typical Hollywood top-down decision-making model and a potentially exciting step forward for the creator economy.
The company believes it has an edge over other platforms because of its massive global scale and vast trove of community data, including granular metrics about what makes content popular with fans, and hundreds of millions of comments from its community members. Moving forward, Wattpad plans to employ machine learning to discover more great content and help partners across the media industry adapt those properties in ways that maximize their appeal to new and existing fans.
“When writers adapt a written work into a movie or television show, they typically have to cut 80 percent of the content,” said Lau in an exclusive interview. “How would a writer know which parts are the most important to fans? That’s where our investment [and precise metrics] really help. We can tell the screenwriter to keep chapters 5, 7 and the first two paragraphs of chapter 8, because those are the parts that draw strong emotional comments from our readers.”
“Hollywood is a business making big bets based on gut instinct,” wrote Lau in his Grand Plan. “Our approach means making better bets based on data. We’ve already proved to the entertainment industry that great content is only one half of the equation - connection matters just as much. Wattpad uses built-in fandoms and data to drastically increase the success rate of adaptations.”
Lau says Wattpad has found a natural media partner in Netflix, another company with a data-driven approach to storytelling. But the company is also taking its storytelling destiny into its own hands. The Wattpad Webtoon Studio, a Wattpad asset that got supercharged with a $100 million financial commitment through the Naver acquisition, has more than 100 TV and film projects in development or production with partners on five continents.
In addition, Lau said the combination with Webtoon opens up opportunities for even more media opportunities in comics, animation, audio-based storytelling, games and immersive experiences. “We knew about Webtoon, of course,” he said, “but once we were brought together, I was amazed at how we were pursuing identical strategies.”
Allen Lau Chief Executive Officer and Co-Founder Wattpad
Both companies rely heavily on content developed by users in a community culture designed to be safe and supportive of young creators finding their voice. Both have based their platforms on advanced machine learning and metadata analysis to build up the fanbase for promising work, and accelerate the development and promotion of popular content to the vast global audience. Both companies also emphasize generous terms to make sure creators can monetize their work, both on the platform and through other channels including publishing, media and licensing. Webtoon was the source of the recent hit Netflix series “All of Us Are Dead.”
“There will be multiple avenues for creators to earn from the stories and fandoms they’ve built on Wattpad,” wrote Lau in the Grand Plan. “We will help them succeed by offering unique and meaningful opportunities writers won’t be able to find on any other platform.” These potentially include opportunities in the emerging Web3 space, including the metaverse and NFTs, if they help creators maximize the earning potential of their stories.
In the midst of all this growth, Lau is adamant that we should not use the P-word in describing the company’s ambitious plans. “This is not a pivot,” he said. “We have actually stayed very true to our original mission. On day one, our goal was to enable people to read and write on a mobile phone, and that’s what we still do. We’ve just built and expanded on that base.”
The plan sums up the company’s future goals as “We find great stories, we build love for those stories, we help storytellers monetize that love in as many innovative ways as possible.”
Can they keep up the momentum amid all the buzz and competitors looking to replicate their model? It will surely make a great story.
