Chapter 20: The Era of Burning Money

Ultimately, the internet is merely a medium, a tool. The true essence of the online economy lies in leveraging the convenience of this tool to create value.

It’s like a knife—no matter how sharp it is, if it neither kills nor cuts, it is meaningless. At best, it can only serve as a piece of art. If this knife represents an online novel website, then it doesn’t even have the value of art—because there are simply too many websites.

Zeyue was the first to strike, brandishing a gleaming small knife, and it was clear who it intended to cut.

The other two competitors in the industry were genuinely startled by this knife. They couldn’t ignore the challenge; the blade was already shining bright. If they didn’t want to meekly offer their necks and be bled dry, they had to invest heavily to sharpen their own blades.

Qidian and Huanjian followed suit, imitating Zeyue by adopting a tipping system.

Had this happened a month earlier, either of these two sites pioneering the tipping system would have caused a sensation no less than when Zeyue first introduced it.

The issue was timing.

Timing is opportunity; timing is money. A single slow step leads to a chain of delays. For Zeyue, the tipping feature had already become a thing of the past. Compared to Zeyue’s hardworking writer reward, the hastily launched tipping systems of the other two lacked real appeal and were insufficient to reverse the downward trend.

Out of necessity, Qidian introduced a “tiered word count reward” system: writing 200,000 words earned a one-time bonus of 200 yuan, and 500,000 words earned 500 yuan.

In its previous life, Qidian had no such benefits and was forced, under pressure from the rising Zeyue Chinese Network, to grit its teeth and bleed.

This move was not insignificant; it almost matched Zeyue’s hardworking writing award and indeed somewhat stemmed the outflow of authors.

Huanjian, meanwhile, took a more amusing approach and released a comical announcement:

“To protect the interests of our vast writers, Huanjian is currently researching a writer benefits system. Please be patient.”

It had the flavor of wanting to both lure the wolf in and yet not wanting to lose the child—watching readers flee in droves, unable to remain indifferent, but genuinely unable to offer much money, they could only paint a grand promise to soothe the readers’ concerns.

Within Huanjian, authors found this laughable, with many openly complaining. Were it not for Huanjian still possessing the largest domestic readership, a mass exodus of writers would likely have occurred.

Though the responses from the two sites could not completely suppress Zeyue, their mimicry at least somewhat curbed Zeyue’s growth. The editorial departments suddenly found themselves much less burdened: fewer new authors meant less work.

After consideration, Zhao Zejun decided to advance the disbursement of the hardworking writing award.

What was once awarded every three months was now given monthly.

The effect was obvious. Three hundred yuan wasn’t much, but real money in hand was like adding a fresh log to the fire; the editorial department once again bustled with activity.

Huanjian finally threw a frail child to lure the wolf: writers who had been with Huanjian for over six months would receive a one-time reward of 200 yuan; those over a year, 500 yuan.

Zeyue’s forceful intervention and near-tycoon spending caught the other two off guard. The domestic online novel industry, a decade ahead of schedule, had entered a money-burning phase.

Unlike Zhao Zejun’s leisurely approach to disbursing funds, the other two were overwhelmed by this cash war, their finances stretched to the limit.

Within the online novel industry, these two simply couldn’t match Zhao Zejun’s financial boldness.

Zeyue’s own capital was not significantly greater than Qidian or Huanjian. If forced, anyone could cough up a million yuan at once.

The problem was that such a sum would cause the other two to hemorrhage financially, while Zhao Zejun remained indifferent. Not only did he have money at hand, but he also had the Zhejian Construction Company behind him, ready to provide support whenever needed.

Junzi’s rental apartment was located just one floor below Zeyue’s office. Except for Zhao Zejun, no one else knew that on the first floor lived Zhao’s trusted confidant. Junzi regularly delivered Zhejian’s financial reports to Zhao Zejun. After leaving Yijiang City, Zhejian had undertaken the expansion of a vegetable market and the renovation of a shopping mall, progressing smoothly. Zhejian’s reputation helped ensure cooperation partners were prompt with payments, leaving finances ample.

One day, just after finishing class, Zhao Zejun returned to his rental. Zhejian had reported an issue—one that had lingered since the disaster relief efforts in Gaogang Village.

…

In the current online economy, online novels still represent a relatively marginal slice, not yet fully valued.

However, the recent three-way battle had caught the attention of some media.

One of the country’s top three portals, NetEase, hosted a program called “Internet Watchroom,” which regularly invited scholars, experts, and industry insiders to discuss hot topics related to the online economy.

Today’s topic was online novels.

“Welcome our guest, Professor Wang from the Capital Business Academy. Professor Wang, recently there has been a sudden surge of popularity in online novels, with numerous websites operating. Many traditional authors view online novels as vulgar and mediocre. What’s your perspective?”

“Hello, host. I’m not a literature scholar, so I cannot comment on the literary quality of online novels. But from an economic standpoint, their existence is justified. The popularity of online novels indicates market demand. You mentioned many novel sites emerging; I conducted some research. Currently, the top three domestic sites—Huanjian Book Alliance, and Zeyue Chinese Network—have formed a tripartite standoff with fierce competition. All three pull out every stop to attract authors and readers; the atmosphere is charged with rivalry.”

“How do you view this competition?”

“Competition is inevitable. The foundation of online novels lies in authors and readers. In my view, the methods used by the three sites all derive from Zeyue’s original tipping system. Simply put, websites invest money to attract writers, who in turn draw readers.

“So far, this has proven effective in the short term. All three show clear data growth, especially Zeyue Chinese Network, which, after only three months, leapt from an obscure newcomer to become the country’s second largest novel site, surpassing Huanjian, which closely followed as number one.”

“You said ‘in the short term.’”

“Yes. The current competition model is essentially money-burning. It’s no different from simply paying people to write books. As long as they’re willing to spend, they can attract many authors quickly. With authors and books, readers follow.

“However, in the long run, pure money-burning and heavy spending may inflate data impressively but fail to establish sustainable profitability. This leads to capital withdrawal and website decline, easily repeating the bubble burst of previous years. Compared to other online economies, online novels struggle to attract large investments, making it impossible to grow strong solely by burning money.”

The professor paused, then said, “These three sites have drawn their blades but so far only cut their own flesh—offering their own flesh to the wolves. If they cannot find new, stable growth points, the outcome will be heavy bleeding to death or being devoured until not even bones remain.”

“So, you are not optimistic about this emerging industry?”

“Online novels have a vast audience—anyone literate could become a user. The potential market is enormous. The key lies in transforming this potential into a market that truly creates value—in short, making this market generate real income. I believe that in this three-way contest, whoever manages this will truly establish firm footing and unify the realm.”