The end of the story…

October 16, 2009

……is the cash cow for Chinese company Shanda Literature Ltd, a
subsidiary of Shanda Interactive Entertainment.

The company’s business model is simple: read the first half
of a book online for free, and if you want to know the rest
(which usually is the case if you have read that far) you need
to pay for it. Revenues are split with the stories’ authors.

In China, this proves to be successful. According to Shanda
Literature CEO Hou Xiaoqing, the company now has cash reserves
of $1.8 billion, with 800,000 authors creating up to 80,000 new
pages of content per day, he said at the Frankfurt Book Fair.

On web portals such as and,
customers can chose from a huge variety of stories, and the best
even make it into print.

Xiaoqing said the company has also teamed up with China
to distribute literature via mobile phones, a
business model that he said was “very promising”.

He added it was now for Shanda to explore whether those
business ideas also work in other parts of the world, including

Could this be a business model for other publishing companies as well?

What do you think?

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see