China's growing love of online literature is helping to fuel the country's movie industry.

With box office takings of US$6.8 billion last year, China is home to the world's second-largest film market and many of its highest grossing movies are inspired by popular novels published online.

Writers in China have increasingly eschewed conventional publishing models and found readers on the Internet. Online-only publishers have sprung up, and their releases are proving hugely popular.

Such novels often attract hundreds of millions of readers, and they are now being tapped for their potential to reach an even broader audience once adapted into films.

"Mojin: The Lost Legend," an Indiana Jones-style thriller adapted from the online novel "Guichuideng," was the third-highest-grossing Chinese film last year.

Other online literary hits have been adapted into TV dramas and video games with great commercial success.

"Movies definitely have the best shot at maximizing literature's commercial potential, but games are not far behind. Comics are quickly catching up as the fan base is broadening in China," said Zhang Xiaoting, chief executive of Beijing-based investment firm Ming Capital.

"What you see the market doing is really trying to monetize in every possible way, rather than just accepting the money people pay to read the story online," said Henry Zhou, editor-in-chief of Alibaba's online literature division.

More than 140 million Chinese regularly read online literature, according to consultancy iResearch. Popular genres include mystery and fantasy, court dramas — especially those involving political struggles — office romances, time travel and tomb-raiding adventures.

While online literature websites used to survive on the money people paid to read long stories, they are now trying to cash in on works that have the potential to be adapted into movies and games.

"Mojin: The Lost Legend" has generated 1.6 billion yuan since its debut in December, making it the highest-grossing movie adapted from an online novel.

As a result, the price for the rights to popular online publications has risen from hundreds of thousands to millions of yuan in just a few years.

Chinese Internet giants Tencent and Alibaba have both signed up novelists to their online literature divisions.

In the past, Alibaba has also invested in movie production and distribution companies, including ChinaVision, Huayi Brothers and Enlight Media.

Last year, Tencent set up the country's largest online literature platform — China Reading Ltd — which now has more than 60 million users, iResearch claimed.

Most of the highest grossing movies and TV series released last year were adapted from novels published by Tencent's online literature division.

However, with licensing and copyright fees rising to record levels, many observers fear those involved are losing sight of the original reason for the adaptations — producing quality movies.

"There's a lot of money chasing very few worthwhile literary works. Speculators are buying up novels at a high price, with little concern for the quality of the adaptations," Zhou said.

"Companies will soon realize that marketing gimmicks can only get them so far, because consumers will have the final say," he said.

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