Chapter 27: Poison Pill

The situation for Huanjian and Qidian was not merely good; it was spectacular.

Ever since Qidian introduced its new signing system, a massive exodus of authors had occurred daily. With nowhere else to turn, these authors naturally flocked to the industry’s two other major websites. There was no need for Qidian or Huanjian to actively poach talent; authors were practically lining up to defect.

The authors who left Zeyue were only part of the story. The entire literary community was deeply dissatisfied with Zeyue’s new signing policy, and the overwhelming public opinion directly influenced new writers entering the field. While Qidian remained relatively quiet, Huanjian seized the opportunity with both hands, launching a massive publicity campaign claiming they would create a free, fair, and comfortable writing environment for web novelists. This marketing gimmick attracted a new wave of aspiring writers. Within a short time, the number of authors on both platforms surged.

For months, the competition against Zeyue had been a grueling, costly battle. What were they fighting for? At the end of the day, it was the authors. The site that attracted the most authors would bring in more readers, boost traffic, and increase the company's valuation. Now, without even lifting a finger, they had seen their author counts explode because Zeyue had effectively driven them away.

However, this unexpected joy did not last long before the executives at both sites realized something was wrong. While the number of authors had indeed increased, they were not bringing the traffic the sites had envisioned. Most of these new arrivals were novices, with a smattering of low-to-mid-tier authors from Zeyue. They shared a common trait: weak writing ability and no established fan base. They brought no readers with them, and the stories they produced could not attract a significant audience in the short term.

Of course, talent takes time to cultivate. Apart from rare overnight sensations like Blood Cloud, most authors require months or even years of practice to hone their craft and build a following. The problem was that Huanjian and Qidian simply could not afford to wait that long.

Zeyue had initiated a "money-burning" war in the web novel industry. Even if these new authors generated zero profit, the websites were still contractually obligated to provide the promised benefits as long as they were posting chapters. Huanjian and Qidian had matched those benefit packages, and while they weren't quite as generous as Zeyue, the difference was negligible. A few extra authors might have been manageable, but the sudden, massive influx of writers—who demanded pay but generated no revenue or traffic—caused operating expenses to skyrocket.

Qidian’s foundations were thin, and Huanjian’s were not much sturdier. They could handle the costs for the current month, but at the current rate of influx, they would be bankrupt within three to five months, bled dry by the sheer cost of author benefits.

Worse still, their initial aggressive marketing continued to draw in even more new writers. Before, when there was no need to pay authors, more writers meant more content and more excitement. Now, every new recruit was a liability. On the balance sheet, these authors no longer looked like contributors; they looked like bandits raiding the company’s coffers.

The pioneers of the web novel industry were, by and large, broke. Otherwise, Qidian would never have sold itself to Shanda for a few million during its heyday. Even Kong Decheng, who appeared wealthy, was small-time compared to serious investors; his capital was a drop in the bucket. And this was a bottomless pit—they might survive one month, but what about two? Or six? Aside from Zhao Zeqiue, no one had absolute confidence in the future of the industry. Constantly pouring tens or hundreds of thousands into a void with no end in sight was unsustainable.

"A poison pill!" The term suddenly clicked in Kong Decheng’s mind.

In finance, a "poison pill" is a defensive tactic used to prevent hostile takeovers, but it perfectly described Zeyue’s strategy. Qidian finally realized they and Huanjian had fallen into a trap set by Zeyue. Looking back at the chaotic battles of the past few months, what seemed like impulsive moves were, in retrospect, calculated steps in a long-term game. Zeyue had quietly lured both sites into a corner.

In the beginning, Zeyue entered the market by breaking conventions, paying authors to stimulate growth and secure market share. This forced the other two to follow suit, launching the industry-wide "money-burning" era. Any author, talented or not, could earn money, and even mediocre writers could easily pull in over a thousand a month. The industry appeared to be in a "Golden Age."

In reality, this era mirrored the dot-com bubble: the writers were earning money not because their work was exceptional, but because of the artificial prosperity created by the war of attrition. Young people flooded into the industry, and reader counts surged.

However, the entire industry was blinded by this growth, focusing only on snatching up more writers. No one realized a massive bubble had formed. Only Zeyue, the orchestrator, had acted decisively by implementing a signing system that weeded out valueless authors, retaining only the "dry goods"—the talented writers and the readers who followed them. The other two sites had greedily swallowed the entire bubble, convinced of their own brilliance.

This was no longer a tactical error; it was a failure of vision. The title of "Godfather of Web Novels" was well-earned; the other two platforms were miles behind Zeyue in their understanding of the business. Their thinking simply couldn't keep up. Even if they could, it wouldn't matter—because, ultimately, it came down to burning cash.

Zeyue seemed to have an endless supply of money. As long as an author maintained a consistent update schedule, they received an "attendance bonus." This meant that the most disciplined and resilient authors flocked to Zeyue. While consistency didn't guarantee a masterpiece, these authors were far more likely to become top-tier talents than those who updated sporadically. By staying with Zeyue, they demonstrated both passion and professional capability.

The remaining authors, who couldn't earn a living at Zeyue, were left to drift toward Huanjian and Qidian. In other words, while all three sites were burning money, Zeyue was acquiring higher-quality talent. Zeyue’s capital was being invested effectively, creating something brilliant, while the money spent by Huanjian and Qidian was essentially charity, destined only to leave behind a landscape of ruin.

Those authors—lacking both discipline and a reader base—were the "poison pill." Once Huanjian and Qidian swallowed them, they could neither digest them nor spit them out. Without immediate countermeasures, this poison pill would surely suck them dry and kill them from within.