HONG KONG SAR –\u00a0Media
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China’s digital publishing industry is estimated to have
For the country’s booming digital publishing industry, these
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The new study, Digital
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To get an idea of the stakes involved in the digital
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Like other countries, in China free cloud storage plays an important
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Making
In China as in any other part of the world, anyone can start
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It is only when their work gains a measure of popularity
Both types of writers usually post their novels in series
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Successful Chinese internet writers who garner a loyal
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Boost
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The researchers went through close to 1,000 books written by
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The results show that money-making writers improved their
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“It’s quite clear that digital piracy poses an enormous
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Prof. Liao explains that as readers could no longer easily
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However, this is not the case for writers that are
Side
However, the researchers found that while lower levels of
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Readers can encourage writers who are signed by the
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The study notes that before the V-Disk termination event,
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“When the threat of ‘losing to’ pirated copies is gone,
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Designing
Prof. Liao and her co-authors urge publishing platforms to
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For policymakers in emerging markets that lack IPR
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“Many emerging economies are in the process of moving
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Reference:<\/b><\/p>\n
Xiaolin
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This
\nOutReach<\/a>\u00a0– 19 July 2021 –\u00a0The
\nprotection of intellectual property rights (IPR) has long been a sticking point
\nin China’s dealings with the West. Despite making gradual strides in its regime
\nin recent decades, the country remains plagued by concerns over copyright
\ninfringement in the physical as well as digital realms. Online, Chinese
\nauthorities continue to wage their battle against piracy, which is costing
\nbillions in lost revenues in everything from movies to TV shows, as well as
\nmusic and books.<\/p>\n![](\"https:\/\/release.media-outreach.com\/release.php\/Images\/Thumb\/500x0\/160756\/CUHK.jpg#image-160756\")
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\nnetted revenues of 20.6 billion Chinese yuan in 2020, with around 509 million
\nreaders nationwide. (Source: iStock)<\/i><\/p>\n
\n
\n
\n
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\nefforts to combat online piracy are critical, as a recent research study shows
\nthat suppressing the threat of digital privacy can lead to an improved level of
\ncreative output by writers, although this did not come without unintended cost.<\/p>\n
\n
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\n
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\nPiracy, Creative Productivity, and Customer Care Effort: Evidence from the
\nDigital Publishing Industry<\/a>, was co-conducted by Chenxi
\nLiao<\/a>, Assistant Professor of Department of Marketing
\nat The Chinese University of Hong Kong (CUHK) Business School, Prof. Xiaolin Li
\nat the London School of Economics and Political Science and Prof. Ying Xie at
\nthe University of Texas at Dallas. The study is among the first to provide
\nempirical evidence of how reduced intellectual property piracy can increase
\ncreative output.<\/p>\n
\n
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\n
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\npublishing industry in China, consider that Tencent-backed China Literature<\/a>,
\na major player in the online publishing industry in China, raised US$1.1 billion
\nin its 2017 record-setting
\nIPO<\/a>. The industry is estimated to have netted revenues of 20.6
\nbillion Chinese yuan<\/a> in 2020, with around 509
\nmillion readers<\/a> nationwide. While the roots of the
\nbooming Chinese internet publishing sector, which sprouted in early 2000,
\nmainly consisted of fantasy novels that often contains elements from ancient
\nmythology and martial arts, it has grown into a mature ecosystem in diverse
\ngenres.<\/p>\n
\n
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\nrole in facilitating piracy of digital content. That is why the researchers
\nchoose to look at the termination of a free service by Chinese cloud storage
\nprovider V-Disk in 2016, which incidentally increased the cost of digital
\npiracy and as a result led to a reduction in copyright piracy of the creative
\nworks of internet writers. Consequently, writers put in more effort in writing.
\nHowever, not all writers put in as much extra effort after the free storage
\nservice was stopped.<\/p>\n
\n
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\n
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\nMoney Writing Digital Books<\/b><\/p>\n
\n
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\nwriting and distributing their material on the internet, but not everybody can
\nmake money from writing. To start off, aspiring internet writers typically sign
\nup for an account with a digital publishing platform to benefit off the latter’s
\nreach. Doing so allows writers to freely offer their material to the platform’s
\nreaders, but at this point aspiring scribes are not permitted to monetise their
\nwritings.<\/p>\n
\n
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\nfrom readers would the digital publishing platform then offer the writer a
\ncontract deal. This allows them to sell their material to readers on the
\nplatform and earn a proportion of the revenue from sales of chapters in their
\nbooks, as well as any appreciatory “tips” paid by readers on top of
\nthis. The actual profit split between the two parties usually varies from
\ncontract to contract.<\/p>\n
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\nand are encouraged by the publishing platforms to update their work almost
\nevery day to attract and retain readers. Writers who are not on contracts can
\npublish on as many competing platforms as they desire, but are unable to make
\nany money off their efforts. Contracted writers meanwhile may only publish on
\nplatforms that they signed with and only the first few chapters of their books
\ncan be read for free. Readers who want to continue reading the book would have
\nto purchase the remaining chapters, with the price of each chapter usually
\ndetermined by length.<\/p>\n
\n
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\n
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\nfollowing are typically able to reap strong financial rewards. For example, one
\nof the most successful is Tang
\nJia San Shao<\/a>, a contract writer for online publisher Qidian<\/a>,
\nwho reportedly made 122 million yuan from royalties in 2017, according to a
\nranking released by mainland
\nChinese media<\/a>. In addition to the royalties generated from publishing
\ndigital books, many writers are also asked to turn their books into TV shows,
\nmovies or even cartoon series, opening new avenues to monetise their creative
\noutput. For example, Tang’s famous novel Douluo Continent<\/a>
\nwas first adapted into a cartoon and then into a TV drama series recently.<\/p>\n
\n
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\n
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\nin Creative Output<\/b><\/p>\n
\n
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\nboth types of writers and examined their output by their creative quantity and
\nquality, as measured by the length of each book and reader feedback,
\nrespectively.<\/p>\n
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\n
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\nproductivity in terms of quantity without sacrificing the quality of the work
\nafter V-Disk ended its service. On the other hand, writers who are writing for
\nfree did not show any significant improvement in their creative productivity.
\nOn the contrary, the quality of their creative work went down after the free
\nstorage service ended.<\/p>\n
\n
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\n
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\nthreat for contracted writers because it affects how much money they bring
\nhome,” Prof. Liao comments. “That’s why we see increased effort in
\nwriting more and better books from contracted writers after V-Disk shut
\ndown.”<\/p>\n
\n
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\n
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\naccess pirated books from the V-Disk service, these readers returned to the
\noriginal publishing platforms and purchased the digital books there. As a
\nresult, writers who made money were not only more properly compensated by sales
\nrevenue, they no longer had to compete with the pirated copies and therefore
\ncould direct their full attention on writing their best work possible to
\ncompete with other writers on the same publishing platform. This resulted in an
\nimprovement in the creative efforts of these writers.<\/p>\n
\n
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\n
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\ndisplaying their books for free. According to Prof. Liao, since their books are
\nfree to readers on the publishing platforms anyway, the livelihoods of these
\nwriters were unlikely to be affected by digital piracy because they do not make
\nany money from their digital works in the first place. Also, Prof. Liao
\nspeculates that the decrease in their creative quality could be a result of
\nincreased competition from profit-making writers who had more time and effort
\nto devote to writing.<\/p>\n
\n
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\nEffects<\/b><\/p>\n
\n
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\ndigital piracy encouraged money-making writers to improve their creative
\noutput, it also led to a decline in their efforts to communicate with readers.<\/p>\n
\n
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\n
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\npublishing platforms through three channels: purchasing their book chapters,
\nrewarding them with tips, or leaving comments. The study finds that both sales
\nand tips would drive this type of writers to publish more work but they have no
\neffect on motivating them to interact more with the readers, which typically
\ninvolves replying to reader comments and acknowledging reader support. On the
\nother hand, reader feedback led to both an increase in writer output and writer
\ninteractions with the readers.<\/p>\n
\n
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\nprofit-earning writers displayed more passion in engaging with their fans,
\nperhaps in the hope of generating extra income through reader tips and to
\ndiscourage their fans from reading pirated copies of their works.<\/p>\n
\n
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\n
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\ncontracted writers became less motivated to interact with their readers and
\nless bothered to elevate the reading experience of their fans. This could be
\nbad news for publishing platforms because if reader experience falls, it’s
\ngoing to drive traffic elsewhere,” Prof. Liao warns.<\/p>\n
\n
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\nPolicy<\/b><\/p>\n
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\nbe aware that when the threat of digital intellectual property piracy goes
\ndown, an improvement in the creative output of signed writers can come at the
\nexpense of reader experience. Therefore, platforms may consider designing a
\ncompensation plan that provides incentives for writers to maintain lively
\ninteractions with their fans.<\/p>\n
\n
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\n
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\nprotection, this study provides evidence for the benefits of having strong IPR
\nprotection. The researchers urge policymakers in these markets to use economic
\nincentives (for example, to make piracy more costly) to strengthen IPR
\nprotection.<\/p>\n
\n
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\n
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\naway from ‘imitation’ to ‘innovation’. Any kind of piracy would be a blow to
\ninnovation,” Prof. Liao comments. “Intellectual property needs to be
\nprotected because the lack of it will kill creativity.”<\/p>\n
\n
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\n
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\n
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\nLi, Chenxi Liao, Ying Xie. Digital Piracy, Creative Productivity, and Customer
\nCare Effort: Evidence from the Digital Publishing Industry. Marketing Science.
\n0 (0).\u00a0 https:\/\/doi.org\/10.1287\/mksc.2020.1275<\/a><\/p>\n
\n
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\n
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\narticle was first published in the China Business Knowledge (CBK) website by
\nCUHK Business School: https:\/\/bit.ly\/3w8pOwO<\/a>.<\/p>\n