Chapter 34: Polarization

In less than a month, the "cash-burning war" in the web novel industry finally drew to its conclusion. Zeyue and Qidian, the two leading websites, had successfully extricated themselves from the predicament of high expenditures and minimal revenue, effectively clearing their deficits.

The inflow of cash in such a short period was more staggering than anyone had anticipated. When the accountant went to verify the books, she was taken aback.

"Mr. Zhao, could there be a mistake?"

Accountant Tong was visibly nervous. The funds in the Zeyue account were fast approaching a seven-figure sum. Although she was not involved in editorial work, she was familiar with the site's operations—she knew roughly how many books and readers they had. Even if every contracted book on the site started generating sales, it shouldn't have resulted in such a sudden surge of deposits.

If a bank undercalculates your money, that’s one thing, but if they overcalculate it, the consequences could be severe. With over a million in funds, in the worst-case scenario, it could even be construed as financial fraud.

"You can set your mind at ease," Zhao Zejun said, amused by Accountant Tong's anxiety.

Web novels were more efficient at raking in money than most retail industries, and the accounts could not be calculated using Accountant Tong's logic.

For example, if a book updated 300,000 words a month at a rate of two cents per thousand words, a reader’s theoretical cost would be six yuan.

But in practice? Readers almost never charge their accounts for just one week or a few yuan a month.

With online banking just starting to gain popularity, many readers still topped up their accounts by going to the bank in person. For convenience, they usually deposited tens or hundreds of yuan at a time. Even via online banking, topping up a few yuan at a time was too much of a hassle.

Zeyue’s backend data showed that over 95% of individual deposits exceeded 20 yuan, and more than 60% exceeded 50 yuan.

In other words, the balance in the account was actually higher than the total value of all the books in the library. Consumers were essentially parking their money with Zeyue, allowing the company to utilize these funds interest-free before they were even spent.

After deducting taxes, half of this revenue was meant to be distributed to authors.

However, the website’s profit was not limited to just the remaining half.

Both Zeyue and Qidian had set a "minimum threshold"—authors only received payment once their earnings surpassed 200 yuan. A significant number of authors failed to reach this subscription income threshold, and currently, this group was quite large; that money effectively went straight to the website.

Furthermore, there was a time lag between reader deposits and author payouts—at least a month. This meant that the website held a large amount of "float" capital for extended periods. The interest alone from these deposits was enough to cover the site's daily operating expenses.

Of course, not every novel website benefited from this shift.

Huanjian, once the industry giant, was currently in a state of chaos.

Statistically, Huanjian’s data looked the most impressive of the three. After the pay-to-read system was implemented, Zeyue and Qidian had indeed lost a certain number of readers, all of whom flocked to the free platform of Huanjian. In the short term, Huanjian’s traffic surged, far exceeding its previous peak when it had dominated the market.

But these statistics were hollow—purely a bubble.

The authors were of low quality and couldn't produce quality novels in the short term, forcing the site to subsidize them with benefits. As for the readers, most were unwilling to pay. The few who were willing to pay realized that any novel with a modicum of quality was primarily on Zeyue or Qidian, so they would pay to read on those sites and only visit Huanjian occasionally to read free content.

Left with no other choice, Huanjian had to mimic Zeyue and trial a pay-to-read system.

Yes, Huanjian had started charging too!

With Zeyue and Qidian thriving more each day, the two pioneers had proven that a paid model was a viable path—the only way for the web novel industry to survive. No matter how stubborn Kong Decheng was, he could no longer insist on remaining free.

The problem was that the readers who came to Huanjian had come specifically because it was free. It was no wonder that they were up in arms when the site suddenly started charging!

Besides, if you want to charge, you need good books. Currently, almost all the top-tier writers in the industry were at Zeyue and Qidian. There were very few books on Huanjian worth paying for.

"A slow start leads to a slower finish." The gap just kept widening.

And Huanjian hadn't just been a step slow.

Being late to implement a tipping system meant a large number of talented authors had moved to Zeyue. After Zeyue introduced its signing system, the gap in quality between the two sites widened further.

In the period that followed, stimulated by the "Diligence Award," Zeyue saw the emergence of a batch of novels with hundreds of thousands of words—novels that had both length and quality, with stable updates that satisfied the basic requirements for per-chapter billing. On the other hand, Huanjian’s novels were short and updated sporadically. While they had plenty of content, there were very few works with stable daily updates that kept readers coming back.

At this point, blindly copying Zeyue’s per-chapter billing model was clearly illogical.

In desperation, the team at Huanjian racked their brains and came up with a compromise based on the site's own characteristics: the monthly subscription.

Ten yuan a month for unlimited access to all novels on the site.

Zhao Zejun actually appreciated the monthly subscription system. It wasn't that monthly subscriptions were better than per-chapter billing—as later facts would prove, per-chapter billing was the true path to success—but for the current state of Huanjian, it was the best possible solution.

Huanjian’s strength lay in having many books, even if few were of high quality. The monthly subscription maximized its advantage of a large library and a massive user base.

Even so, after implementing the monthly subscription, while Huanjian managed to survive, it had completely lost its ability to compete with Zeyue and Qidian.

Because monthly subscription revenue was limited, it provided only stable but meager income for the site and its writers. Any author with even a shred of talent or ambition for the future would not choose Huanjian.

The "Big Three" of web novels had, from this moment on, entered a stage of extreme polarization.

Huanjian, once the sole giant, saw its market share shrink further and further. It clung to its old foundation, taking advantage of the industry's rapid growth just to scrape by.

Meanwhile, Zeyue and Qidian were reborn. They continuously fostered excellent novels and top-tier authors, which in turn attracted more readers. Through a healthy "hematopoietic" mechanism and a robust profit model, they became the true leaders of the industry.

At this moment, Zhao Zejun was accompanying several publishing industry professionals who had flown in from across the strait to tour Zeyue’s temporary office.

As early as when Zeyue implemented its signing system, Zhao Zejun had secretly arranged for contact with publishers in Hong Kong and Taiwan.

The war of web novels on the mainland had birthed a virtual bubble, but the "bubble" didn't just have negative effects.

The vast amount of hype had heated up the "web novel" industry. To a certain extent, it made the entire sector appear to be experiencing explosive growth, attracting attention from various circles—foremost among them, the eyes of publishers in Hong Kong and Taiwan.

After more than a month of negotiations, several publishers in Hong Kong and Taiwan expressed significant interest in publishing web novels. Two of the most renowned, "Starlight" and "Tuhe," had specifically sent editors to Zeyue for on-site inspections, preparing to establish long-term, stable partnerships.

Today was the day the two publishers would select their first batch of titles for publication and sign the contracts with Zeyue.