After dabbling in crowd funding and briefly experimenting with native advertising, Wattpad announced yesterday that their new plan to generate revenue would involve a more direct approach:
To that end, we’re making it simpler for readers to financially support the writers they love.
One way to accomplish this is through adding enriching, paid content to Wattpad. We’re pursuing this kind of content as an early experiment intended to improve the experience for readers and writers alike. Where we introduce paid content, it will add new dimensions to existing free stories through bonus chapters, different points of view, or full stories that expand the original narrative.
For Wattpad readers, this paid content will take the form of optional extras added to your Wattpad reading experience. Wattpad was built free and will remain that way. The app will always be free, and there will always be a wealth of stories to read for free.
Like many free services, Wattpad struggles with finding a source of revenue, and Wattpad's focus as a writing community made it doubly difficult.
Unlike reader-focused communities like The Reading Room, which are a natural fit for an ebookstore, communities like Wattpad usually have to charge for premium services, like the smaller writing community Wattpad acquired this year or like BookCountry (which crawled into bed with Author Solutions).
The compromise of a freemium model may not generate the most revenue but it does strike me as the least worst solution.