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Ashleigh Gardner will lead Wattpad's new publishing division.The Canadian Press

Toronto-based Wattpad Corp. is getting into the book-publishing business following the commercial success of several entertainment properties based on stories first posted on its social network for readers and writers of self-published fiction.

It’s a major step for the 13-year-old Canadian tech company in realizing its ambition to create a global entertainment business fuelled by user-generated content, using artificial intelligence to identify which stories and story elements from its contributors connect most with readers.

“There is no hidden agenda of what we want to do,” Wattpad CEO Allen Lau said. “We have to do more and more ourselves, [be] more vertically integrated. That’s the key to success.”

Wattpad boasts 70 million monthly users globally – predominantly teenage girls and young women who both post their fiction on the platform and avidly read it, spending a collective 22 billion minutes a month on the platform and writing 200 million comments and messages about the stories.

Many works have turned into commercial successes in other formats, starting with After – a fan-fiction romance story written by Anna Todd and inspired by singer Harry Styles – which sold 10 million copies after its publication in book form in 2014. A feature film based on After will appear in theatres in April. Kissing Booth, a Wattpad story by Beth Reekles, was turned into one of the most-watched films on Netflix last year despite poor reviews, and last year Sony Pictures Television bought the rights to Death Is My BFF by Katarina E. Tonks, which started as a Wattpad story.

Wattpad has taken an increasingly active role in helping its writers get published, shopping popular stories to book publishers – charging an agent fee – and striking deals with production companies in North America, Asia and Europe to develop and co-produce filmed entertainment based on its stories.

Of the nearly 1,000 Wattpad stories it has helped turn into books, 90 per cent have earned back their advances within the first year, more than four times better than the industry rate, said Ashleigh Gardner, who heads Wattpad’s publishing efforts.

Now, Wattpad aims to take a greater cut of the success of those published books with built-in audiences and proven popularity. “This is an evolution of what we’ve been doing for a few years,” Gardner said. “It absolutely lets us capture more [economic value] by being the publisher behind it as well, and it’s also something we’re taking those risks on ourselves, because we believe in our data and what our users want."

Peter Misek, an observer on Wattpad’s board, said Wattpad “is the future of entertainment" because it relies on data, not gut decisions, to suggest what properties to develop. “It has enough data that they can de-risk the content-creation process at all levels.”

The company said the first six young-adult titles on the Wattpad Books imprint will appear this fall, including Cupid’s Match, a story about a teenage girl who falls in love with the god of love himself, and which has been read more than 46 million times on Wattpad. The company’s books will be sold and distributed by Macmillan in the United States and Raincoast Books in Canada to start out, and the company will continue to help authors ink deals with outside publishers. But Gardner said it is only a matter of time before Wattpad evolves into a fully integrated book publisher. “Six titles isn’t at a scale yet where we’re able to buy our own printing presses and warehouses, but I have no doubt that that’s where we’ll be within the next 10 years,” she said.

Wattpad’s move into publishing is the latest in a series of initiatives to generate revenue from its platform. The company also recently started offering an advertising-free subscription service for readers, and last fall experimented with selling access to dozens of Wattpad stories online on a chapter-by-chapter basis, sharing revenues with the authors.

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