I would guess that your postmisses an important detail related to web novels. Sites allowing authors to publish them and set paywalls actually exist. What the sites lack is the ability to prevent content from being optimized for virality, not for actual value or even for the time during which the author is supposed to reflect on posts.
While I haven't thoroughly studied English platforms, I have read the ones from Russia and suspect that most popular content is slop updated often enough to stay on top. In addition, unlike before, slop's proliferation has now lost: the time necessary to deliver a new, ahem, piece of culture and reflect on it, the ability of the piece to mutate during replication and friction which would accompany reproduction before the rise of the Internet.
The worst aspect is likely slop's potential to undermine the society by affecting the readers' worldview and/or by being superstimulating.
Having mourned the long, painful deaths of fanfics that were slowly abandoned in the middle section where a gardener-type writer has to actually work hard on the plot, I can't help but think some of these would have been finished if the fans could legally pay the author. As crude as the IP monopolies are, they don't preclude this. They are just being wielded less skillfully than they could be. An author could allow anyone to monetize their world and characters for a, say, 20% cut. I will refer to a fictional work that has such an agreement as a shared world.
Creating such a shared world requires little legal innovation. What is lacking is will, an author or corporation with the greed and stomach to look AO3 in its eyes and say, "I care not what you do to my poor characters (though the horrors be manifold and some beyond mortal comprehension) so long as you pay a 20% tax on gross."
The most popular fanfic community of all time is the Harry Potter fandom. And Harry Potter has some characteristics that are unusually good for fanfiction. It has a sort of loosely-typed magic system, which easily bends to an author's whims. It has an unusual variety of characters and side characters, none of whom are overly three-dimensional. The world, itself, is quaint, majestic and under-explored, as you would expect of children's novels. But for all that makes it virtuous to the tax collector, the size of the fandom is still mostly just a consequence of its incredibly massive popularity.
This may make engineering a shared world seem as hard a task as becoming one of the best-selling novelists ever. But I beg you not to be too demoralized by this reasoning - though perhaps this ambition swells your desire to invest; in this case remain remained swelled. And always keep in mind, we don't have to write the most popular novels ever. We only have to make the authors of these works subject to our tax regime.
The first and most obvious idea for bootstrapping is to purchase some existing intellectual property, ideally one with an active, talented fanfic community. There are likely bargains out there, anime and manga both may be promising. And it may even be worth it to pay an accomplished professional novelist a bonus to take the 20% deal. If it is some mismanaged-but-beloved property, there will be talented people who would love to do it. This would make a good publicity stunt and, if the author is talented enough, give a shot in the arm to the property, too.
The much harder but more interesting idea is to generate a new intellectual property, explicitly designed to be maximally amenable to fan works. I lack the imagination to fully articulate what this would look like. (Should you fund me, I will find and hire the finest minds in fanfiction.) But it seems unlikely that works not designed for this purpose are ideal for it. You can even imagine creating characters/worlds and presenting them to consumers solely through advertisements, relying on monetized fan works to do all of the story work:
"This sporting event is brought to you by me, Able Runewalker. I was born in the Far Far Away and learned there the magic of my forefathers. These are my eldritch glasses and this is the vase of incomprehensible sorrows."
Such a tactic seems unlikely to work, but there may be things close to it in idea-space that could. Engrossing shorts on TikTok may well be enough. There are depths to be plumbed here, and should you fund us we will plumb them.
Some might argue the failure of Kindle Worlds (Amazon's licensed fanfic project) proves there is no market here. I have but one argument: they did not allow pornographic content. Bezos had the greed but lacked the stomach. Our startup has the fortitude to prevail.
What's that, Paul? Wait you're not Paul? Paul doesn't work here anymore? What's that, person-whose-name-I-have-not-learned-who-now-works-in-Paul's-stead? 500k? That's the max you guys offer? Truly? a16z offered me 5 million to design a dog biscuit subscription service whose biscuits, once eaten, make the victimized puppy permanently and life-threateningly dependent, the monthly costs tuned to be higher the more adorable the puppy. I guess I will just work on that, then. Jesus, 500k? 500k! What is this, 2003?