Hosts serialized Chinese web novels on QQ Reading and Qidian, turning reader behavior into vetted story properties for Tencent's film, game, and animation teams.
China Literature runs two reading platforms, QQ Reading and Qidian, where millions of amateur authors post serialized fiction chapter by chapter and readers pay to unlock new installments. Every chapter read or skipped generates engagement data, and that accumulated record is what China Literature uses to decide which story properties get passed to Tencent's film, animation, and game studios as candidates for adaptation — so the serialization platform and the production pipeline are not separate businesses so much as consecutive stages of the same process. Because the data is produced by hosting the fiction in the first place, a rival platform with different readers would generate different signal, and top-performing authors are locked to QQ Reading and Qidian under exclusive contracts that bundle the engagement record and the legal right to adapt together, making both halves difficult to replicate at once. The whole sequence depends on Chinese government approval at every step — if the State Administration of Press and Publication restricts a content category like fantasy or supernatural fiction, the serialization stops, the data stops accumulating, and the adaptation queue stalls simultaneously across every property in that category, no matter how strong their reader numbers were.
How does this company make money?
Readers on QQ Reading and Qidian pay to unlock individual chapters before they are released for free, which is the platform's core daily revenue. When a story is adapted into a film or television series, the platform charges licensing fees to the producers. When a story becomes a game inside Tencent, the platform receives a share of that revenue. Readers who use the free tier generate advertising revenue.
What makes this company hard to replace?
Successful authors are tied to QQ Reading and Qidian under multi-year exclusive contracts that include adaptation right clauses, so leaving means walking away from those terms mid-agreement. Readers who stay on the platform have built up reading histories and subscription libraries that do not transfer anywhere else. Entertainment partners have come to rely on the platform's chapter-level audience data when deciding which properties to fund, and no other platform produces that same signal from the same reader base.
What limits this company?
Every film, television series, animation, or game based on a novel needs approval from the Chinese State Administration of Press and Publication before it can be distributed. That approval cannot be sped up by spending more money or hiring more people. When the government periodically restricts a whole category — fantasy, supernatural fiction, historical fiction — every story in that category stalls at once, no matter how strong its reader numbers are.
What does this company depend on?
The company cannot run without Tencent's user ecosystem to bring in readers, the Chinese State Administration of Press and Publication to approve content for distribution, individual amateur writers who hold the adaptation rights to their own stories, Tencent Animation & Comics to produce adaptations, and New Classics Media for film and television production.
Who depends on this company?
Chinese entertainment production companies lose access to story properties that already have a proven audience before any production money is spent. Mobile game developers lose tested narrative frameworks — characters, plots, worlds — that readers have already responded to. Chinese streaming platforms lose serialized content that brings readers back daily.
How does this company scale?
Collecting reader engagement data and acquiring adaptation rights across new story submissions costs very little as the platform grows — each new chapter uploaded and read adds to the record automatically. What does not scale is managing successful authors. Top-performing writers need individual attention and personal negotiation, and that relationship work cannot be turned into a repeatable process.
What external forces can significantly affect this company?
Chinese government regulations periodically restrict entire content categories — fantasy, supernatural fiction, and historical fiction — which can freeze large portions of the adaptation queue with no warning. A demographic shift toward short-form video among younger Chinese consumers is reducing the time people spend reading long serialized stories. Currency controls in China limit how much revenue from international licensing deals can actually be brought back into the business.
Where is this company structurally vulnerable?
If Tencent changed internal policy to stop sharing data between QQ Reading and Qidian and its production units, or handed adaptation decisions to a studio outside the Tencent ecosystem, the exclusive author contracts would still be legally valid but would have nowhere to go. The mechanism that converts serialization exclusivity into adaptation revenue would be cut, and the entire pipeline would stall.
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