News NIKKEI ASIAN REVIEW: Tencent-backed China Literature posts massive loss

Discussion in 'Novel General' started by baka8roukanako, Aug 12, 2020.

  1. baka8roukanako

    baka8roukanako Justice for Qi Rong

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    Link: Tencent-backed China Literature posts massive loss

    Article copy-pasted below:


    August 12, 2020 15:08 JST
    Company cites 'structural issues' as it faced author uprising over compensation

    Tencent-backed online publisher and e-book company China Literature swung to a massive loss in the first half of 2020, as it faced an author uprising over compensation even as the movement toward a free-reading model challenged its broader sector.

    While many online entertainment providers saw growth in the first half of 2020 as people stayed home during the pandemic, China Literature struggled under pressure from both its unhappy suppliers as well as customers, who increasingly demand cheaper and even free products. In an earlier announcement warning of the loss, China Literature cited a large charge related to one of its acquisitions.

    That charge, coming amid the squeeze from suppliers and customers, led China Literature to post a net loss of 3.3 billion yuan ($474 million) for the first six months of the year, reversing a 393 million yuan profit a year earlier. The company still posted a nearly 10% year-on-year revenue gain to 3.3 billion yuan, according to interim results released on Tuesday after market close.

    "The pandemic together with the fluid and changing macro-environment have had a negative impact on our business performance," the company said in the announcement. "The experience has made us realize that China Literature has structural issues that have piled up in recent years, which have gradually degraded the company's market share and neutralized its competitive edge. These are the fundamental reasons for our disappointing results."

    In its review of the period, China Literature cited both the high-profile conflict with its authors, as well as poor performance for its own free-to-read product. The former saw the company issue new contracts to its millions of authors in June, after they voiced concerns over copyright, profit distribution and the company's move toward a free-reading model the previous month.

    Amid the turmoil, most of the company's original top management team was forced out and replaced with Tencent veterans.

    "In the past, we failed to take full care of our writer's feelings and support our writers adequately through our incentive program, and some of our writers expressed concern about previous versions of the writer's contract," China Literature said. "Writers are the cornerstone of the China Literature platform, and we need to do more to enhance their trust."

    China Literature added that its free-to-read Feidu app -- launched last year -- was also failing to meet expectations. "The free-to-read reading product has a strong influence in certain markets and over certain user groups, but Feidu's overall performance failed to match the leading position the company enjoys in China's online literature sector."

    China Literature's shares shot up after the company's 2017 initial public offering in Hong Kong, but have gradually declined as the market leader faces growing competition. The stock now trades at 50.60 Hong Kong dollars, or about 10% below its IPO price of HK$55.
     
    kenar, grish99, juniorjawz and 4 others like this.
  2. Kalto

    Kalto [Somewhat meticulous]

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    This is kind of sad :blobsweat_2:
     
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  3. otaku31

    otaku31 Well-Known Member

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    Stuck between a rock and a hard place, partly of their own making, esp. in regards to the discontent over author contracts. :blobsweat_2:
     
    Last edited: Aug 12, 2020
  4. Anon Ymous

    Anon Ymous Well-Known Member

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    and then wait for a fews years to put things into motion
     
  5. MasterCuddler

    MasterCuddler Handsome Chicken with his Paradise

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  6. Zhaernon

    Zhaernon Well-Known Member

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    That and just plain greed led them there :blob_grin: Uprising!!! :blobhero:
     
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  7. Xravia

    Xravia 『Chaos Wizard Of Procrastination 』

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    Imagine paying to read properganda lol
     
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  8. tornberry

    tornberry Well-Known Member

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    Someone in the company offended some young masters? :blobfearful:
     
  9. Eternal Emperor

    Eternal Emperor SelfAware-PieceOfShit

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    Lol maybe all the face slapping that’s been happening to them in the novels finally got on their nerves~~?:blobthinkingsmirk:
     
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  10. Nyamsus

    Nyamsus Life is full of shit and we live in it

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    tencent got tonne of money right?
    can they just sell at discounted price but pay author at normal rate
     
    Last edited: Aug 12, 2020
  11. juniorjawz

    juniorjawz Well-Known Member

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    Author's Uprising could be a novel title by it's own.
     
  12. YWL

    YWL Well-Known Member

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    old news lol. We were talking about it last month?
     
  13. Suijin

    Suijin Blood God [Medic]

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    So they tried to make it cheaper due to pandemic. That way everyone earns, and the readers can afford it.
    But the authors were annoyed and wanted the same amount, despite the pandemic/lock down.

    ughhh. I know readers can be assholes at most times, too greedy and want all the things for free. But authors this time really fucked themselves up over greed.

    will. you. shut. the. quack. up. about. your. narrow. minded. view. in. politics?
    or do i need to report you for butting in somewhere that you don't belong.
     
  14. Anon Ymous

    Anon Ymous Well-Known Member

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    or publishing platform are the one to profits on authors's works so they have increase the prices
     
  15. jex890

    jex890 Well-Known Member

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    I mean, yeah. But the authors also need to eat? Of course they want the same amount. But I can also see it from that point of view, people trying to get literature cheaper. But novels and the like are things that are for entertainment and not essential for survival, like housing, food, etc.

    So personally I think it makes sense that the rates should stay the same.
     
  16. Drake98

    Drake98 Concerned Fan

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    wow, i cant let that got away. how much do they even make? what is an author general income in china?
    really? greedy?
     
  17. Suijin

    Suijin Blood God [Medic]

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    I understand that point. But due to pandemic where A LOT of readers have to choose between food and books, they will choose food. Authors would get a smaller income, but they would still be earning unlike a big majority of their readers. By not budging even an inch. They shot themselves in the foot where noone was willing to pay to read.
    read what I just wrote
     
  18. ImperialNero

    ImperialNero Well-Known Member

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    Tencent suffered a massive loss? Thats a really good news
     
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  19. Drake98

    Drake98 Concerned Fan

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    what i meant was, do you know how much they earn? how can you say they are greedy if you dont know how much they at least earn? i dont know too, but to say someone greedy over that was just too much.
     
  20. Suijin

    Suijin Blood God [Medic]

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    nope. I don't.
    as i said. during a pandemic where they can choose to be understanding toward their PAYING readers who are NOT EARNING due to lock down. they chose to not budge an inch, despite even with a bit smaller income, still being able to earn money unlike the 99% of their readers.

    and if you're a starting writer and not living in a 3rd tier or lower city. then you are an idiot.