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Publishing giant China Literature responds to protests over ‘exploitative’ contract clauses

The Global Times said the contract requires writers to “unconditionally hand over all copyrights to the platform.”

China Literature, a publishing company controlled by Tencent, denied allegations of infringing on writers’ copyright on Wednesday after a group of writers signed with the company organized a strike to protest contractual clauses they say are exploitative.

The dispute between China Literature and its writers came on the heels of a leadership reshuffle on April 27, in which the company’s founding management team was replaced by a slate of veteran executives from Tencent, its largest shareholder, KrASIA wrote.

China Literature owns several digital reading products including online novel platform and community Qidian, mobile content aggregation and distribution platform QQ Reading, female-oriented novel website Xiaoxiang, and romantic fiction site Hongxiu, with over 12 million published books, comics, and novellas in its catalog. Anyone can become an author with the company by registering, and can get the chance to sign with the company if their book exceeds a certain word count. Instead of a guaranteed paycheck, signed authors are paid based on the number of clicks to their material.

Recent protest against the company by its community of writers started after contract revisions, which granted the platform increased access to its writers’ work,  gained publicity online on April 28.

According to the Global Times, unfair clauses in the contract require the authors to “unconditionally hand over all copyrights to the platform”, and that the platform has the right to “license the copyright without authors’ consent and will distribute no revenue with the authors.”

Additionally, writers also worry that the new management will remove paywalls in favor of a free content model based on ad revenue, which can lower writers’ incomes.

China Literature clarified on May 3 that the contract was not in fact new and was released last Sepetember, and additionally promised to revise unreasonable clauses. The company also invited writers to participate in a discussion with new CEO, Cheng Wu, and other executives on May 6 and said paid content would remain the foundation of China Literature.

However, the announcement failed to appease everyone, with some calling on writers to stop publishing new content on May 5 to show dissatisfaction. A hashtag associated with the strike has generated more than 88 million views and about 10,8000 posts on Weibo.

China Literature said it had 219.7 million monthly active users (MUAs) on its ecosystem of products in 2019 and increased its revenues by 65.7% year-on-year to USD 1.2 billion. In recent years, the company has been making more of its revenue through intellectual property (IP) operations, in which it sells the rights to produce its platform’s content to film and TV studios.