Canadians who prefer their online stories told without advertising to interrupt the dramatic flow can now subscribe to a “premium” version of the Wattpad app. But it’s going to cost them.
The Toronto-based company says it is responding to reader requests — and hoping for a revenue boost — by rolling out a subscriber-paid version of its free online storytelling app that costs $5.99 per month or $60 per year. The same price is being charged in both the U.S. and Canada, which means Canadians will pay less than Americans at current exchange rates.
The app has become a popular hangout for passionate readers eager to embrace the work of new writers, particularly when it comes to fan fiction tales inspired by pop stars, actors and literary characters.
“Wattpad as a product has always been free to the readers, free to the writers, so this is the first time we have done something like this,” CEO and co-founder Allen Lau said in an interview.
“Wattpad Premium will allow users in Canada and the U.S. to enjoy an ad-free experience. By doing so, we are giving the users full control over the look and feel of the product.”
Having an ad-free option is one of the most requested improvements suggested by Wattpad customers, said Lau, estimating more than 60 million readers use the app to connect with some 2.5 million active writers each month.
He said he doesn’t know how many customers will sign up for Premium, nor is there a certain target number. He said it will continue to be upgraded with more enhanced features going forward.
Wattpad, which celebrates its 11th birthday in November, has recently been looking to push more of its creative stars into the mainstream, with partnerships for physical books, TV shows and films through a division called Wattpad Studios.
Lau said it’s all part of his long-term plan to diversify and increase revenues.
“In the next 10 years, one of the major objectives of the master plan is to monetize and distribute the contents on and off platform. Wattpad Premium is one of the many ways we can increase monetization,” he said.
“The company from a financial perspective is already in a very healthy state but there’s no such thing called ‘too healthy.’”
He wouldn’t give financial details, citing the company’s private status.
Jui Ramaprasad, an assistant professor of information systems at McGill University’s Desautels Faculty of Management, said the paid premium option or “two-sided platform” model is something many apps have embraced to build revenue after capturing an audience with a free portal.
“It works for some and it doesn’t work for others,” she said, adding subscriptions generally bring in more revenue per user than advertising, pointing to Sweden-based music-streaming site Spotify as an example.
“Spotify has been really successful in terms of converting free users to premium users and so have online dating sites and things like that,” she said.
“Newspaper sites have had a harder time because people want that content for free.”
She said the key to selling a premium product is to ensure it contains the unique content users signed up for with enhancements that clearly improve the experience.
To try ad-free Wattpad, users will be able to click on the “Go Premium” button in the app to immediately be upgraded.
Lau said paid subscription users will still be able to choose to see advertiser-sponsored stories and writing contests in Premium but they won’t see the advertisements that pop up between chapters in the free app.
— Follow @HealingSlowly on Twitter.