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Business Operations Business Models

How Does Wattpad Make Money (Business and Revenue Model)

The Wattpad business model

Wattpad logo
Here’s what you should know:
  • What is Wattpad, and how does Wattpad work?
  • How does Wattpad make money?
  • Subscription Revenue (Wattpad Premium)
  • Selling Virtual Coins to unlock Paid Stories
  • Ad Revenue (Wattpad Brand Partnerships)
  • Wattpad profit and revenue
  • What is the Wattpad business and revenue model?
  • Wattpad funding, net worth, and valuation
  • Wattpad subsidiaries, acquisitions, and exits

How does Wattpad make money if it’s free to read? Well, here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Wattpad business and revenue model, how much Wattpad makes per year, and how Wattpad works.

What is Wattpad, and how does Wattpad work?

Wattpad is an online social reading platform that enables users to read and write original stories.

Founded in 2006 by Allen Lau and Ivan Yuen, Wattpad went on to later get acquired by Naver on January 20, 2021, for a reported $600 million.

Since that time, Wattpad now has more than 94 million monthly readers and writers on its platform globally.

So, how does Wattpad work? To use Wattpad, simply download their app from the Apple App Store or Google Play store, or visit their website and create an account.

Once an account is created, you can browse stories to read by genre, Editor’s Pick, etc., and add them to your reading list if you choose to do so. Additionally, you can upgrade to their paid subscription tier for additional features.

Some of Wattpad’s competitors include Medium, SubstackTwitterTumblrQuoraReddit, and other online publishing platforms.

Wattpad App in Apple App Store | Wattpad Business Model | How Does Wattpad Make Money? | How Does Wattpad Work?
Source: Apple App Store | Wattpad

How does Wattpad make money?

According to Wattpad, Wattpad has more than 94 million monthly readers and writers using its service worldwide. So how does Wattpad make money off of these users?

Below is a breakdown of how much money Wattpad makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how Wattpad makes money in 2022

Wattpad has a revenue model that makes money in three (3) ways; subscription revenue from Wattpad Premium, ad revenue, and by selling virtual coins in-app that readers can use to purchase paid stories.

#1. Subscription Revenue (Wattpad Premium)

One of the ways Wattpad makes money is through its subscription service, Wattpad Premium.

Although Wattpad makes it free for its readers to use, Wattpad also offers two (2) paid subscription tiers; Wattpad Premium and Wattpad Premium+.

Both of which offer exclusive perks that the free version does not offer such as an ad-free reading experience, unlimited offline stories, exclusive reaction stickers, theme colors, and more – depending on which plan the readers choose. Which you can see below.

How much money does Wattpad cost? (Wattpad subscription cost)

  • Wattpad Premium: $4.99 USD per month
  • Wattpad Premium Plus: $7.49 USD per month
Wattpad Premium | Wattpad Business Model | How Does Wattpad Make Money? | How Does Wattpad Work?
Source: Wattpad

Note: Of the more than 94 million users Wattpad has, it’s unclear how many are paying for Wattpad’s Premium subscription service.

#2. Selling Virtual Coins to unlock Paid Stories

Wattpad also makes money by selling Wattpad coins in-app to its readers.

What are Wattpad coins? Wattpad coins act like a virtual currency in-app and are used to purchase and unlock “Paid Stories” to read, which can either be bought per chapter or the whole story.

The way it works is users buy the virtual coins with fiat currency and then can use those coins to purchase Paid Stories. All coins are sold in bundles, which you can see how much they cost below.

What is the price of Wattpad coins?

  • $0.99 to $13.99+ depending on the coin bundle purchased

Note: Readers can also earn coins for free by watching ads.

#3. Ad Revenue (Wattpad Brand Partnerships)

In addition to selling virtual coins and subscriptions, Wattpad also makes money through its ad revenue.

A few of the many brands that partner with Wattpad to advertise include Universal, Paramount, Warner Bros., Hulu, and more.

Of the 94 + million monthly users, the average engagement time – per user per day – is 60 minutes. This comes out to 23 billion minutes spent on Wattpad every month, according to Wattpad. Which equals more impressions on their ads. Resulting in more ad revenue for Wattpad.

Note: Users can avoid seeing ads with the purchase of a Wattpad Premium subscription, which is a part of their upselling business model strategy.

Wattpad profit and revenue

Wattpad has not released any official reports in regards to company earnings.

Note: Because Wattpad is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Wattpad business and revenue model?

Wattpad makes money through a few revenue models that they combine within their company, they are:

  • Freemium (upselling) business model
  • Subscription business model
  • Advertising based business model
  • Transaction based business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model

Wattpad funding, net worth, and valuation

Wattpad’s Crunchbase profile shows Wattpad has raised $117.8 million over 8 rounds.

On January 20, 2021, Wattpad was acquired by Naver for $600 million.

Wattpad subsidiaries, acquisitions, and exits

To date, Wattpad has not made any acquisitions, investments, or exits.