The high market value of online text giant is difficult to hide hidden worries, not just look at the prosperity of the capital market surface

China Literature Group was listed on the Hong Kong Stock Exchange on November 8 with a market capitalization of HK $92.908 billion. Also sought after by capital is Palm Technology, which has risen by the daily limit for several consecutive trading days since it went public in September. Behind the popularity of the two digital reading giants is the growing user scale and market share of online literature.

original title: "talking about" the high market value of the Internet giant cannot hide the hidden worries about sustainable development

on November 8th, China Literature Group was listed on the Hong Kong Stock Exchange with a market capitalization of HK $92.908 billion. Also sought after by capital is Palm Technology, which has risen by the daily limit for several consecutive trading days since it went public in September. Behind the popularity of the two digital reading giants is the growing user scale and market share of online literature.

in the past 20 years, the rapid growth of network literature has become an important new force in the development pattern of Chinese literature, and its strong development trend and growth potential have attracted attention both inside and outside the industry.

the latest research report on the development of the Internet in China shows that as of June 2017, the number of users of online literature in China had reached 352 million, accounting for half of the country's Internet users. Some scholars in the industry said that this number will increase at the rate of tens of millions of dollars a year. Earlier data showed that as of 2016, the size of the online literature market had reached 9 billion yuan.

from its inception to the present, after the initial stage and the honeymoon period of traditional literature, China's network literature has entered a period of mass production and profitable industrialization.

in the past two years, many popular online movies and TV dramas such as Legend of Miyue, Thousand bones of Flowers, and Nirvana in Fire have been adapted from online literature IP works, and their frequent hundreds of millions of yuan in film pay and higher-level marketing are astonishing.

however, as the so-called mud and sand, the problems such as single profit model, excessive concentration of resources and pan-entertainment have become increasingly prominent.

take the most popular IP operation model in the last two years as an example. At present, although the top IP in the field of online literature is very popular in the capital market, the online literature platform can not hide its embarrassment in terms of the depth and efficient transformation of IP. The problems exposed such as single revenue and lack of liquidity have become a difficult problem for most online literature enterprises, including the two listed giants mentioned above.

for many capitals, their blind optimism and eagerness for quick success and quick profit may also hurt the healthy development of the IP market. For example, the initial crazy pursuit of IP, after getting IP resources, but lack of patience to cultivate or maintain, may kill an IP resource with good fundamentals and growth potential, and eventually endanger the original ability.

secondly, the excessive concentration of original content and resources is worth reflecting on.

Public data show that at present, there are three listed companies on online literature platforms in China: China Literature Group, Chinese online, and Palm Science and Technology. The number of works available accounts for 72%, 27.5% and 5.2% of the total number of online literature works, respectively. China Literature is even more dominant. Taking the domestic release of online literature adaptation products in 2016 as an example, China Literature Group topped the list, accounting for 65% of the 20 domestic adapted films with the highest box office revenue, accounting for 75% of the 20 domestic adapted TV dramas with the highest ratings. 70% of the 20 domestic adapted online games with the highest number of downloads accounted for 75% of the 20 domestic adapted online games with the highest cumulative downloads.

at the same time, China Literature almost covers the major writers and works of domestic online literature. As of June 30, 2017, it has a total of 9.2 million original literary works, covering more than 200 theme types. By the end of last year, the number of China Literature Group writers accounted for 88.3% of the total number of online literature writers in China. Of China's top 50 most popular original online writers in 2016, 41 have established an exclusive publishing relationship with China Literature. In other words, in the field of network literature, China Literature Group has a market share of more than 80%. Such content volume and writer resources are obviously difficult to reach by other platforms in the industry.

will it have an impact on the overall transformation and diversified development of network literature behind the dominance of one or two companies and the over-concentration of resources? Obviously, if there is a dominant or even monopolistic company in the market, it will more or less have some negative effects on readers and the fairness of the literature reading market.

in addition, in the face of the current problems of single profit model and pan-entertainment in the online literature market, can listed companies like China Literature have sustainable multiple profitability? can we take the lead in the online literature market and establish an effective incentive mechanism to ensure that stable and high-quality works can be continuously launched from a huge library of works and writer resources? It is very important for the overall prosperity of the network literature market and the formation of a relatively healthy, standardized and orderly competition system.

at present, the relevant capital market investment is mainly concentrated in these two or three companies, and the follow-up really sustainable and healthy development depends on their original ability and the pattern of internal diversity. whether it can help to form a prosperous and healthy competitive market system, and whether there is more room for the growth of network literature and minority literature.

in other words, we should not only see the superficial prosperity of the capital market at present, but also see whether this layout can play a positive role in promoting the healthy growth of network literature in the long run. These are all areas that need to be pondered.

at least for now, prosperity and hidden worries coexist, and it is necessary to maintain due calmness and vigilance.

Edit: mary