Telling stories about success of user-pay online content

The common perception used to be that Chinese people were unwilling to pay for online content. But that is changing as online programs become classier and consumers see value in paying for quality applications.

The key remains quality.

One prime example is Uncle Kai telling stories, an application aimed at children.

“My son is addicted to listening to Uncle Kai telling stories every night,” said Sammi Fan, mother of a 10-year-old and registered user of the app for three years. “Uncle Kai has a large pool of good stories, and he is very capable of telling them in an attractive way.”

Uncle Kai is the nickname of 39-year-old Wang Kai, who used to be a TV anchor for China Central Television Station. His idea to become a storyteller rose from his two little daughters constantly pestering him to tell them stories.

Encouraged by their response to his stories, Wang recorded them to share with the children of his colleagues. There, too, the response was positive.

Why not try to cover a larger audience? Wang was inspired to expand by media workmates with an acute sense of market demand.

In 2013, he resigned from the TV station and began an account on WeChat called Uncle Kai telling stories. The next year, Wang founded a company and upgraded the public account into an application.

Since then, Uncle Kai telling stories has gone viral online. The audio content eventually expanded to cover children stories, traditional Chinese poems and online training programs on parenting.

Today, there are more than 2,000 stories on the application, shared by 10 million users, who spend an average one hour per day listening to the programs through the application. Wang has also made a lot of spin-off products, including books, stationery and toys based on the stories he narrates.

In the beginning, all stories on the application were free. In 2015, Wang launched his first paid services when he read “The Journey to the West” – a classic Chinese novel -- in a modified version with simpler and more vivid words catering to children.

The program, priced at 199 yuan (US$29) for 138 episodes, earned him more than 20 million yuan. Moreover, it prompted Wang to produce more series with themes drawn from topics such as Chinese history, folklore, science and philosophy.

It’s not a heavy cost for average users. Fan said she spent 800 yuan for four programs from Uncle Kai telling stories.

“My son loves these paid programs very much,” she said. “They are really of very high quality. I think the service is worthwhile. Uncle Kai is a much better storyteller than I am, and it frees me from have to read bedtime stories to my son every night, leaving a little time for myself.”

There is even a program of Chinese four-line Tang Dynasty poems. Wang reads the verses slowly, in gradually lowered tones, enabling children to memorize the lines as they fall asleep. It’s considered quite a talent if young children can recite these poems.

“It is a marvelous trick,” Fan said.

She said a program like Uncle Kai telling stories relieves her of any worry about her son becoming addicted to video games or other less worthy online content.

There are very few advertisements placed on the Uncle Kai application or inserted in stories because Wang said he wants to provide the purest possible experience to listeners. The business model has been so successful that Wang’s company has been able to access outside financing of nearly 300 million yuan.

Uncle Kai is not alone. There are many similar audio programs targeting children on the market, although none of them can quite rival the success of Uncle Kai.

Other applications offering paid programming to adults are becoming equally successful. Audio apps like Ximalaya FM and Qingting FM sell programs on history, culture, classics and jokes. They also invite celebrities to do talk shows or professionals to give lectures. For streaming applications like iQiyi or Sohu, membership fees are charged for paid programs.

Liu Zhijing, director of China media and Internet at Swiss bank UBS, said China has reached a stage where paid content will see explosive growth.

“Thanks to people’s larger purchasing power and more convenient payments through digital technology, China is expected to see the market of paid content grow to 829 billion yuan by 2022 from the current 444 billion yuan,” Liu said.

He added, “It will, in turn, encourage media and entertainment agencies to create better content, expanding market potential even more.”