Wattpad, the Toronto-based startup that runs a social network for aspiring writers, has been described by one of its investors as “the YouTube of writing,” because of the way it allows amateur creators to share their work with the world. Now the company has launched a crowdfunding feature similar to Kickstarter called “Fan Funding” that makes it easy for members to tap their fan base as a way of monetizing their work — and could also help the network monetize its own user base as well, since it charges a fee for the process.
Allen Lau, founder and CEO of Wattpad, said in an interview prior to the launch that the new feature is similar to existing crowdfunding platforms like Kickstarter or Indiegogo, with landing pages where aspiring authors can post videos or information about their work, and a tiered system of rewards — including things like having a character in a book named after them — for fans who donate different amounts. One Wattpad member had already reached her goal of $ 5,000 before the program even officially launched.
Despite the similarities with Kickstarter, Lau says there is a crucial difference between what Wattpad is doing and other platforms, because of the emotional connection that already exists between members and their community of fans. “On Kickstarter you typically have to beg your relatives and friends to fund you, or you create a cool video and ask strangers to fund you,” Lau said. “But in our case, the psychology behind it is very different — we are asking the fans who have been supporting writers all along, and utilizing that network to go through the crowdfunding process.”
Some Wattpad members have tens of thousands of followers of their work already, and this provides a built-in support base, Lau said. All the new fan-funding feature does is make it easier for those members to tap into that relationship they already have with fans of their writing.
One of the benefits of the feature, Lau said, is that it allows writers to find new ways of monetizing their content rather than just going through the usual channels of publishing a book. Authors can raise funds before they write something, or while they are writing it, instead of just charging readers for the content once they have already finished and printed it — and that gives them a lot more flexibility than the traditional publishing industry.
“We believe there are new models for content, with multiple points of entry for funding, including pre-content creation,” said Lau. Writers who have started a series of books or stories, for example, could tap their fan base for support to continue with the next part of the series. “We believe it’s harder for Kickstarter or Indiegogo to do this type of project because most of the supporters of their projects don’t have a pre-existing relationship with the creators those projects.”
Wattpad has raised $ 21 million in funding in two rounds, the latest of which was a Series B round of $ 17.3 million led by Khosla Ventures.
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