Xinhua Insight: Leafing through online literature for China's Harry Potter

If China's film market is a flame burning bright, the country's online literature is increasingly its fuel.

The world's second-largest film market, with a box office of 6.8 billion U.S. dollars in 2015, is churning out top-grossing movies inspired by popular novels published online.

As the self-publishing phenomenon has shaken up the literary scene in the West, writers in China have increasingly eschewed conventional publishing models and found readers on the Internet. Online-only publishers have sprung up, and their releases are proving hugely popular.

Online novels have amassed hundreds of millions of readers, and now they are being tapped for their potential to reach an even broader audience once adapted into films. "Mojin: The Lost Legend," an Indiana Jones-esque thriller adapted from online novel "Guichuideng," was the third-highest-grossing Chinese film last year.

More movies based on online literary hits are expected to give Hollywood a run for its money in this summer's blockbuster season, and online novels have also been adapted into TV dramas and video games with great commercial success. It seems only a matter of time before China gets its first major media franchise based on an online novel.

"Movies definitely have the best shot at maximizing literature's commercial potential, but games are not far behind. Comics are quickly catching up as the fan base is broadening in China," said Zhang Xiaoting, CEO of Beijing-based investment firm Ming Capital.

"What you see the market doing is really trying to monetize in every possible way, rather than just accepting the money people pay to read the story online," said Henry Zhou, editor-in-chief of Alibaba's online literature division.

Zhou and his peers are desperate to replicate the success of Harry Potter, which of course began life as a series of novels before spawning films, games, audio books and numerous other licensed products, with a brand worth over 15 billion U.S. dollars.

CORE CONSUMERS

Over 140 million Chinese were regularly reading online literature on their computers and smartphones as of December, according to consultancy iResearch.

Popular genres include mystery and fantasy, court dramas -- especially those involving political struggles, office romance, time travel and tomb-raiding adventure.

Whereas online literature websites survived in the past on the money users pay to read long stories, they are now trying to become a licenser for works with potential to be adapted into movies and games.

Understandably, the readers of the original source material are the core consumers of its multiple adaptations later.

iResearch predicts that more than 2 billion yuan (about 309 million U.S. dollars) could be made at the box office from an adaptation of one of the biggest online literature hits in the fantasy and mystery genres.

China's box office revenue record stands at 3.39 billion yuan. "Mojin: The Lost Legend" has generated 1.6 billion since its debut in December, making it the highest-grossing movie adapted from an online novel.

TAPPING THE POTENTIAL

Companies have begun scrambling for the rights to popular online literature. Price tags have risen from hundreds of thousands of yuan to millions in the past few years.

Chinese Internet giants Tencent and Alibaba have both begun signing up novelists to their own online literature divisions.

Hoping to dominate every stage of the literature licensing, adaptation, production and distribution process, Alibaba has also been investing in movie production and distribution companies including ChinaVision, Huayi Brothers, Enlight Media and online video site Youku Tudou over the years.

Last year, Tencent founded the country's largest online literature platform China Reading Limited. It has more than 60 million readers via its websites and mobile apps, data from iResearch shows.

Most of China's high-grossing movies and TV series released last year were adapted from novels published by Tencent's online literature division.

HYPE AND SPECULATION

But with licensing and copyright fees having been pushed up to exorbitant levels, many observers fear those involved are losing sight of the original reason for the adaptations -- producing quality movies.

"There's a lot of money chasing very few worthwhile literary works. Speculators are buying up novels at a high price, with little concern over the quality of the adaptations" said Alibaba Literature's Zhou.

It takes time to craft a good story and breed the die-hard fans needed to sustain a franchise.

"Companies will soon realize that marketing gimmicks and hyping sensations can only get them so far, because consumers will have the final say," Zhou said. Endi