Rewenrevaluing IP turnover rate

How does AI Hou Xiaonan’s “Fast” Strategy Reshape the Business Model of Yuewen?

“Everything Disney does ultimately relies on storytelling.”

This century-old business credo has driven Disney from its early days of animation and comics to become a giant in entertainment spanning film, streaming, consumer products, and offline experiences.

Industry giants can continuously extend their IP value chains through diversification, hedging against fluctuations in individual businesses. This “century-old store”’s unique composure is built on a mature multi-touchpoint management system.

Not all content companies have such buffers. Yuewen, holding one of the largest content libraries in Chinese internet, is a developing platform example.

On March 17, Yuewen announced its full-year 2025 performance. The financial report shows total revenue down 9.2% year-over-year to 7.37 billion yuan. Online business revenue stabilized at 4.05 billion yuan; copyright operations and other revenues declined 18.9% to 3.32 billion yuan, becoming the main drag on overall revenue.

For IP incubation platforms closer to the upstream of the industry chain, storytelling first means content supply. Whether it can smoothly evolve into dramas, movies, animations, or derivatives largely depends on downstream production, scheduling, and market timing.

The ongoing pressure of the entertainment industry downturn continues to transmit upstream, giving Yuewen’s financials a dual character: on one side, traditional long-form adaptations remain constrained by industry cycles; on the other, under pressure, Yuewen is attempting to patch itself with AI, manga dramas, short dramas, etc., to reconstruct the commercial efficiency of its storytelling pipeline.

Making Slow Business Faster

How long does it take for a novel to reach the point of IP adaptation and realize its value?

Looking back at Yuewen’s journey, this number is often a long process measured in years. For film and TV adaptation, “Joy of Life” took 12 years, “The King’s Avatar” 6 years, “Da Feng Da Geng Ren” 4 years; for animation, high-quality long animations like “Battle Through the Heavens” and “Doulou Dalu” generally have production cycles of years.

This is the strategic outline established by Cheng Wu since becoming Yuewen’s CEO.

Its core logic revolves around creating IP from quality online literature, emphasizing visual presentation—adapting stories into anime, film, games, and derivatives. Since then, Yuewen’s valuation logic has shifted from merely a web novel platform to an IP factory.

An ideal IP factory does not mean a naturally efficient assembly line. On the contrary, the more it relies on long dramas, movies, and animations, the longer the story realization process—there is always a long chain from “story” to “revenue.”

If online literature is seen as the “raw material” for IP, the original IP adaptation chain is essentially heavy industry.

The old method of slowly digesting IP inventories is increasingly mismatched with current industry rhythms. It naturally suits only a few “top-tier” works and struggles to handle the turnover of massive mid-tier content.

Under the Matthew effect, many stories remain on bookshelves for a long time. The same applies to long video platforms, where abundant mid-tier content struggles to find opportunities.

The recent surge in short dramas and dynamic comics provides Yuewen’s factory with a “pilot workshop” for trial and error and grayscale testing.

A “pilot workshop” implies a shorter validation cycle.

Long dramas and high-quality animations are more like final assembly stages—high investment, heavy decision-making, suitable for proven top IPs. Short dramas and dynamic comics are different: the former has shorter production cycles and faster market feedback; the latter, with lower visual thresholds, quickly transforms text content into consumable visual products.

Especially for dynamic comics, an industry insider told Guangzi Planet that since the first half of 2025, the dynamic comic industry has experienced three iterations of efficiency and cost improvements.

“Early last year was the traditional dynamic comic era, with costs around 2,000 yuan per minute,” he said. “In the second half, Nano Banana solved consistency issues, Sora improved dynamic performance, and costs dropped below 500 yuan per minute.”

By early this year, SeeDance 2.0 promoted teams of 10 or fewer to produce completed episodes, with non-high-quality comics now costing in the hundreds of yuan per minute. Meanwhile, licensing costs have shrunk by about two-thirds.

Individual creators chasing the trend are a crucial efficiency puzzle piece under Yuewen’s strategy. Here, efficiency is not limited to user attention or monetization but more about providing Yuewen with a faster IP development chain.

As the “preprocessing” begins to reconstruct Yuewen’s IP turnover logic, there are signs that Yuewen is gradually transforming into a faster Yuewen.

The Gains and Losses of Speed

Financial reports disclose Yuewen’s progress in short dramas and AI-driven manga dramas, offering a window into its acceleration.

The report shows that in the second half of 2025, after Yuewen officially launched its AI manga drama business, nearly 1,000 works were released, with over 100 surpassing 10 million views and 12 exceeding 100 million; during the same period, revenue from AI manga dramas exceeded 100 million yuan, and over 120 short dramas were launched.

Yuewen has indeed found a lighter, faster way to activate IP through short dramas and AI manga dramas compared to long dramas, movies, and high-quality animations. Even though on paper, AI manga dramas account for only 1.4% of total revenue, their liquidity and asset accumulation are significant for upstream content platforms.

Besides operational fundamentals, current data and disclosures can be interpreted in two ways.

Based on total revenue and quantity, the average revenue per AI manga drama is about 100,000 yuan. During the earnings call, management also disclosed that the gross profit margin of AI manga dramas exceeds 50%. Combining these, Yuewen’s current cost per AI manga drama is roughly 50,000 yuan—large stock IPs help amortize copyright costs, giving Yuewen a structural advantage in manga drama production.

Additionally, manga dramas’ distribution will also feed back into the web novel ecosystem. For example, the manga drama “Three Thousand Shelters,” adapted from “I Build Shelters in Eternal Night,” has over 300 million views across the web and has driven the original novel back into the top ten of Qidian’s bestseller list.

Conversely, Yuewen’s situation with short dramas is less optimistic.

The financial report does not disclose overall revenue from short dramas but focuses more on individual benchmarks like “Good Pregnancy Sweet Wife” and “I Really Didn’t Want to Rebirth.”

For example, “Good Pregnancy Sweet Wife,” with over 3.5 billion views, generated about 80 million yuan in total revenue. This demonstrates Yuewen’s ability to produce viral short dramas; however, in the actual industry revenue-sharing structure, view counts do not directly translate into platform profits.

Both short dramas and manga dramas are redistribution businesses. The key difference is that live-action short dramas do not have the low marginal costs typical of manga dramas.

Live-action short dramas have cost structures closer to traditional film and TV industries, making it difficult to compress unit costs through technological leaps. Under the pressure of short video distribution mechanisms, the costs of creating viral short or manga dramas differ significantly.

The financial report shows that last year, due to a gap in film and TV scheduling, Yuewen’s sales and marketing expenses decreased 11.1% year-over-year to 2.011 billion yuan, but this only slightly reduced the proportion of total revenue by 0.5%.

The decline in sales expenses at the group level does not necessarily mean short and manga dramas have escaped reliance on traffic. Instead, it may reflect a contraction in promotional spending on old businesses, potentially masking ongoing channel and distribution costs for new businesses.

More importantly, visual presentation of IP generally favors animation over live-action. Especially since Qidian’s IPs are mostly male-oriented, live-action adaptation is limited by visual effects and capital constraints.

During the earnings call, management provided guidance for short and manga dramas.

For manga dramas, they plan to launch 3,000 titles by 2026, tripling last year’s number, with revenue reaching 300-500 million yuan; for short dramas, the expansion is more conservative, with 80 titles, less than the growth of manga dramas.

In the new content competition, short dramas and manga dramas are likely to play defensive and offensive roles respectively.

Hou Xiaonan’s “Fast” Era

In an era of increasingly diversified entertainment and content creation, Yuewen, which grew alongside Chinese internet, inevitably faces “disruption.” Many see new elements like short dramas, manga dramas, and AI as forms of self-rescue.

Looking further back, Yuewen’s recent changes are not just about producing more short dramas and AI manga dramas but resemble a strategic shift at the corporate level.

During Wu Wenhui’s era, Yuewen’s core task was to build platforms, gather authors, and nurture content. Here, storytelling was the business; under Cheng Wu, Yuewen’s focus expanded outward. Besides producing stories, it aimed to enrich and extend good stories, creating long-term cross-media assets.

Yuewen’s “Big Yuewen” strategy once aligned with the boom of mobile internet, helping it transition from a “web novel platform” to an “IP factory.” The problem was that the value realization cycle and IP chain lengthened, exposing inefficiencies in inventory IP turnover.

Against this backdrop, Hou Xiaonan took over as CEO of Yuewen Group in May 2023. He did not reject the “Big Yuewen” direction but prioritized “speeding up.”

When he took office, Hou Xiaonan explicitly outlined three priorities: continue developing authors and the content ecosystem, deepen the IP ecosystem and commercialization, and focus on how new technologies like AIGC can improve creative experience and IP adaptation efficiency. The first two carried over from his predecessor; the third, with a clear modern flavor, became his governance focus for the coming years.

In other words, since taking office, Hou Xiaonan has sought to leverage AI to reorganize Yuewen’s IP adaptation chain.

One month after becoming CEO, Hou Xiaonan established the Intelligent and Platform R&D Division. He also personally led a cross-departmental AI task force.

In 2023, Yuewen launched “Yuewen Miaobi” and integrated it into the author assistant; by 2025, AI’s role had expanded further: with “Miaobi Tongjian” for creation, “Copyright Assistant” for IP screening, and “Manga Drama Assistant” for adaptation.

From this perspective, “speed” is not just a business strategy under pressure but a methodology. It aims to transform Yuewen’s previously project-oriented, top-driven, heavy-chain IP factory into a more high-frequency, rapid-verification, cross-departmental content processing system.

In this new system, authors provide the source material, the platform consolidates content and users, and AI shortens the middle steps from creation, screening, to adaptation and distribution.

From an operational standpoint, this restructuring is still in early stages and cannot yet support a valuation shift. But from the strategic and organizational evolution, Yuewen is now marked with Hou Xiaonan’s “seal of steel.”

During the earnings call, management described the new Yuewen as “lightly equipped, shedding historical burdens” after completing goodwill impairment. In a sense, Yuewen also wants to shed another burden: its former slow pace, which was a result of trying to extend business touchpoints.

Can this once-heavy IP factory turn “speed” from a temporary response into a new normal of operation? This question may be tested this year.