70% of Russian readers read ebooks, according to a survey in 2013, and the competition from online and digital is seen, by 65%, as the main reason for a decline in the circulation of printed books, followed by 28% who spend less time reading, and 27% who refer to the cost of books on paper. As 92% admit to getting ebooks from the Internet “for free”, the report also highlights the impact from endemic piracy on the (legal) Russian book market. (Data reported by Russia beyond the Headlines, 28 June 2013)
Russia has a book market currently worth 60,000 million Rubles in sales (ca $1,865 million, down from US $2 billion in 2011), according to estimates from the largest retail chain and publisher, Ozon, quoted by the Russian Federal Agency for Press and Mass Media. If purchases by public institutions are included, for instance for school libraries, the total value is around 79,000 million Rubles, or $ 2,456 million, according to the Russian Book Industry Magazine, in a briefing for this report).
Developments in Russia’s book market has been complex and unsteady in recent years. After significant growth in the early 2000s, when the value of the Russian book market had almost doubled from US $1.6 billion in 2003 to US $3.0 billion in 2008, the trend was reversed when the economic crisis hit, bringing the market down to about US $2.3 billion in 2011 (US $2.5 billion in 2010).
In 2012, the Russian book market continued to slide in volume, by 9 percent, although a rise in retail prices compensated for the loss, bringing it to a mere 4 percent in value (Olga Ro, Russian Book Industry Magazine, in a communication for this report).
The year 2012 saw significant changes in the structure of the market, driven by both internal and international forces. The most spectacular domestic disruption resulted from the country’s biggest publishing group, AST, collapsing under a burden of debt in early summer 2012. Its rival EKSMO, the second-largest publishing group, gained management control over AST, further strengthening its already substantial position in the market. By the end of 2012, EKSMO reported an increase of sales of between 5 and 6 percent.
Top bestselling titles at the end of 2012 included E.L. James’ Shades of Grey trilogy, occupying the first three positions in October and November, topped only in December by the Russian novelist Boris Akunin with Black City.
By genre, only children’s books saw a substantial rise at the end of the year (by 14 percent), largely because of their popularity as Christmas gifts. Fiction declined by 6 percent (Russian Book Industry Magazine).
The ongoing turbulence had strong repercussions on the retail and distribution side as well. In 2011, the largest book chain, Top Kniga, crashed. In April 2012, AST’s wholesale arm, Pyaty Okean, filed for bankruptcy. However, half of the market is in the hands of some 3,000 independent bookstores who reportedly performed slightly better then the largest chains, recording a loss of only 2 percent (Russian Literature Online).
Due to its immense territory—which covers nine time zones between its western and eastern borders, making distribution of physical books extremely complex and costly—with few consumers carrying credit cards and the severe effect of piracy, Russia is a particularly challenging environment for publishers and retailers, but there is also a thriving reading culture in which writers and intellectuals occupy a prominent role in the public sphere and in which books stand at the center of the country’s cultural ambitions.
In June 2013, the Russian government pledged to invest $100 millon until 2018 to support the publishing industry and improve its infrastructure. (Publishing Perspectives, 10 June 2013)
According to a report by the Russian edition of Forbes magazine, Amazon is preparing the launch for a dedicated Russian website and Kindle store for 2013. (Forbes, 19 April 2013), and indeed the American platform has hired the head of publisher Azbuka –Atticus to run operations which are seen to “confirm that the digital book market in Russia is ready for growth and development.” (Mikhail Osin, an executive of the largest online bookshop Ozon, quoted in Book Industry Magazine, 3 July 2013)
Key Indicators | Values | Sources, comments |
Book market size (p+e, at consumer prices) | 60,000 million Rubles | 2012 (estimate by OZON and quoted by Federal Agency for Press and Mass Communication); 79,000 million Rubles incl. purchases by public institutions. |
Titles published per year (new and successive editions) | 116,888 | Russian Book Chamber |
New titles per 1 million inhabitants | 623 | |
eBook titles (available from publishers) | 80 - 100,000 (commercial and free by end of 2012) | LitRes |
Market share of ebooks | >1% | |
Key market parameters | A few committed and professional actors in both publishing and online retail; very high impact of pricacy |
With 116,888 titles published in 2012 (down from 122,915 in 2011), educational works represented one-third (32.2 percent) of published titles, science and popular science 21.1 percent, fiction 14.9 percent, and children’s books 9 percent. Fifty-eight percent of all titles are published in Moscow and another 8 percent in Saint Petersburg; by print run, the Muscovite share is 85 percent. Book chains own 24 percent of the market, versus 45 percent for independent bookstores, and 7 percent was controlled by online stores (all data from the Federal Agency for Press and Mass Communication).
As of 2012, “the ebook business has really taken off and is booming in Russia,” according to Olga Ro, of the Russian Book Industry Magazine (communication for this report, January 2013). And indeed, many industry voices, including EKSMO’s CEO, Oleg Novikov, anticipated substantial growth for ebooks in 2013. This was ever more remarkable, as only one year earlier, critical expectations had been voiced at many professional debates about the rampant piracy threatening the emerging business to the point of making successful commercialization next to impossible.
And yet, 10,000 legal downloads have been recorded for Shades of Grey alone in 2012. The expectations have shifted, with industry leaders reporting on successful shifts toward legal downloads, notably by expanding the available catalog and by improving the conveniance of commercial platforms (e.g., statement by Sergey Anuriev, CEO of Litres, the largest ebook portal, owned by EKSMO, at the TOC Frankfurt conference in October 2012).
Overall, revenues from (legal) sales of ebooks have accounted for 260 million Rubles in 2012 ($ 8 million, up from 135 million Rubles in 2011; The Russian Book Market, Federal Agency for Press and Mass Communication, 2013). The increase was also reflected by growth in ebook sales through mobile channels, including Apple’s iTunes and iBookstore, and Google Play.
In addition, the penetration of devices, both ereaders and tablets, seems to have soared in 2012 by around 200 percent, with domestic Russian products winning significant market share over imported gadgets. The initial dominance of Apple’s iPad has reportedly dropped from 90 percent in 2011 to about 40 percent in 2012, with Samsung’s Galaxy gaining ground (Olga Ro in a communication for this report).
In December 2012, the US and Russian governments announced a joint “Online Piracy Crackdown Agreement” (see details in ).
In June 2013, the Russian parliament Duma cleared anti-piracy legislation, which was debated controversiall by freedom of speech activists, as it is expected to allow copyright holders to ask the authorities to block entire websites if they provide any allegedly pirated content. (RiaNovosti, 14 June 2013)
A study in fall 2011 done by the Federal Agency for Press and Mass Communication [1] had found that 44 percent of readers of ebooks used “mobile devices,” versus 46 percent who read on a PC. Fifty-six percent of the devices other than PCs were dedicated ereaders, compared to 25 percent smartphones, 22 percent other mobile phones, and 13 percent tablets (e.g., iPad or other).
Among the 25 percent of participants who said that they read both printed and electronic books, the main attraction (for 58 percent of this group of participants) of ebooks was finding the desired book faster than the printed edition. However, one may assume that this convenience of accessibility is not limited to (or even primarily provided by) legal downloads but reflects the heavy impact of piracy when it comes to ebooks. Stakeholders queried for this report assumed that pirated ebooks represented an estimated 90 percent of the current ebook downloads in Russia.
In Russia, the most popular format for ebooks is FB (or FictionBook), an open XML-based standard with the file extension .fb2. The format is without DRM and describes the structure of a document, including the basic metadata such as the author’s name, the title, and the publisher of a book, allowing convenient conversion to other file formats as well as indexing and management of ebooks by the reader (more details in English are available here).
FBReader is open source reading software for GNU/Linux, Windows, and other platforms, originally released in January 2005 (more details in English are available here).
Earlier developments
By the end of 2011, ebook releases of national bestsellers were considered to be the main driving force behind the recent expansion of the (legal) Russian ebook segment (e.g., Viktor Pelewin’s postapocalyptic novel S.N.U.F.F., Walter Isaacson’s biography of the late Apple founder Steve Jobs, or the Millennium trilogy by Swedish crime writer Stieg Larsson). A relevant ebook bestseller list is available at the ebook retail platform LitRes.
With about 60,000 ebook titles available by the end of 2011, the two largest publishing groups, EKSMO and AST, were considered to be the market leaders in Russian ebooks.
In 2010, the legal Russian ebook market was worth US $2 million (up from US $1 million in 2009), with 600,000 ebook reading devices sold. For 2011, estimates expected another doubling of the ebook market in value versus 2010.
In December 2012, Apple opened its iTunes store in Russia, followed within a week by Google with its Play store (read more here). Kobo has announced that it will roll out its services in Russia in 2013.
Several other players launched initiatives in the Russian market, including the British retail chain WHSmith and the German self-publishing portal XinXii (read more here).
In distribution, LitRes is the top-performing platform, followed by Imobilco, the general online sales platform Ozon, Labirint, and Bookland, plus a few specialized ventures developing innovative models adapted specifically to the Russian environment, notably KnigaFund (literally “book fund,” of the Digital Distribution Center, DDC Ltd.) and the online library BookMate.
LitRes
LitRes, founded in 2007, is considered to be the leading ebook retail platform for legal titles in Russia, currently listing 200,000 ebook and audio titles for download and its own LitRes Touch device. As early as 2009, Alexander Roife, chief editor of LitRes, noted that titles which figured on the print bestselling charts had between 3,000 and 6,000 legal downloads on average as well (Publishing Perspectives, October 2009).
The LitRes website is compatible with the complete set of current state-of-the-art reader and community tools, including ratings and debates for popular titles and topics, and offers and supports a wide variety of standards and formats.
Ozon
Ozon is a general retailer selling not only books and other media products but also house and garden appliances, beauty, gifts, shoes, antiques, jewelry, and fashion products. It is currently the second-largest online retailer in Russia (after Utkonos.ru, a platform specializing in food). Opened in 1998 as a “scalable business” (company statement), Ozon is a megastore market leader in B2C ecommerce in Russia, with revenues of US $137 million in 2010, up 34 percent from 2009, 5.6 million registered users (as of March 2011) and 600,000 visitors daily.
Ozon has a catalog of about 600,000 printed book titles, of which 240,000 are in Russian, and about 10,000 ebook titles, equaling some 10 percent of value of hardcover sales (Elizabeth van Lehr, “A Russian Riddle,” London Fair Dealer, April 27, 2011). Ozon promotes its own ereading device, the Ozon Galaxy (not to be confused with the Samsung Galaxy).
In September 2011, Ozon raised US $100 million in funding, the largest such investment ever for an Internet company in Russia, according to the company (The Guardian, September 8, 2011).
KnigaFund
KnigaFund (BookFund) was launched by Digital Distribution Center Ltd. in September 2008 as a division of ProfMedia, one of Russia’s largest media and entertainment companies, to “develop and realize projects in legal digital content distribution. DDC Ltd. is the Russian supplier of specific educational information aimed to perfect, harmonize, and simplify the education process in graduate-level educational institutions (colleges and universities)” (company statement).
KnigaFund offers a full online library of copyrighted books in various digital formats with approval from the copyright holders. Its mission is to “assist in modernisation of the research process in graduate-level educational institutions (colleges and universities) by providing effective access to information through modern Internet technologies.
”Currently, 50,000 titles are listed, with 1,500 new titles added per month, including textbooks, educational materials, and scientific literature. Books are digitized in ways that reproduce exact page layouts in order to allow academic quotes and bibliographies. KnigaFund cooperates with major academic institutions in the Russian Federation, including Piter Publishing House, АSТ, Drofa, INFRA-M, Europe, Economika, East-West, Logos, and Tri Quadrata, as well as several international publishers, notably John Wiley & Sons. The digitized titles allow margin notes and footnotes, as well as the creation of personal bookshelves, comments, and interactive features within the user’s personal workspace. The catalog of titles is organized by topics, similar to a physical library.
BookMate
BookMate is a book club in which registered users pay 99 rubles a month to read from a current selection of 40,000 titles, either on a computer or mobile devices (with the Android, Apple iOS, and Symbian operating systems supported). BookMate cooperates with authors and publishers, allowing them to upload their own titles on a revenue-sharing basis. Books, available in the Russian FB2 and EPUB formats, are copy protected and cannot be downloaded. About 5,000 titles of classic—that is, out of copyright—literature can be accessed and read free of charge and without registration.
Only 20 percent of Bookmate’s readers are in metropolitan Moscow (company website and Hannah Johnson and Edwad Nawotka, “Russian Publishing Is No ‘Depressing’ Siberia; E-book Innovation from Bookmate.ru,” Publishing Perspective, April 12, 2011).
iMobilco is another, competing online bookclub, whose offer also includes movies to rent.
Librusek, launched in 2007, is an online library, for which readers can pruchase a monthly subscription.
In early December 2012, Amazon, Google, and Kobo launched localized online platforms in Brazil within hours of each other, kicking off a new round in the ebook race for Latin America’s largest economy. However, half a year later, reports indicate that it was not one of these companies but Apple, through its iBookstore, that was ahead in terms of ebook sales.
The first research comparing the performance of the different e-retailers appeared in Folha de S. Paulo by the end of 2012. According to it, Apple’s lead was followed by Google and then by the local platform Saraiva, Amazon, and Kobo (which is partnering with the local Livraria Cultura). However, expectations were that the order could shift quickly in the months and years ahead (Carlo Carrenho in Publishing Perspectives, January 2, 2013).
In fact, by March 2012, Amazon had already leaped positions according to some data sales from digital distributor Distribuidora de Livros Digitais (DLD), (see PublishNews April 1, 2011), which were disclosed at the Digital Minds Conference in London. DLD’s market share is roughly one-third of the market, so its sales are largely representative of the market. In March 2012, 28.5 percent of all e-book units sold by DLD were sold by Apple. Amazon followed with 22 percent, Google was third with 17.5 percent; local Saraiva came in fourth place with 15 percent, followed by Kobo, which accounted for 11.8 percent of the sales. Considering that DLD’s catalog is focused more on publishers’ frontlist titles and that Amazon is selling more backlist and self-published titles than the competition, it is safe to assume that Amazon is even closer to Apple if we consider the whole market.
In an early summary after the holidays and year-end 2012, the dynamics of the Brazilian ebook market turned out to be spectacular. In December 2012, sales had grown tenfold year on year, increasing by 110 percent from November to December 2012 alone. This is a huge growth for a tiny market. In 2012, DLD sold around 110,000 units. Based on that, we can forecast the 2012 trade market to be around 330,000 units.
Another important source of book statistics is the yearly survey conducted by the Brazilian Book Chamber (BBC) and the Economics Research Institute, Fipe. The 2012 numbers, disclosed in July 2013, show that the book market in Brazil accounted for U.S. $2,439 million in wholesale value—i.e., publishers´ net revenues. However, this figure combines $1,795 million (or 73.6 percent) from the private sector with $644 million (or 26.4 percent) from the public sector, the latter coming mostly from federal program purchases of educational materials. Because the government does not cover educational expenses for students in private schools, another $635 million (or 24.6 percent of the total market) comes from private households buying K–12 materials. Altogether, more than half of publishers’ revenues derive from education.
While overall statistics on Brazil’s book market (which is by far Latin America’s largest) are considered dependable, the emerging digital segment still lacks sufficient scrutiny. The good news is that 2012 was the first year that the Brazilian Book Chamber did more extensive research on e-books. Among a sample of publishers that accounts for 54 percent of the market, according to the survey’s methodology, 227,292 ebook units were sold in 2012, which gave the publishers only US $1.7 million in revenues. The ebook sales were divided into subsectors: trade publishers sold 130,119 units; Science, Technical and Medical publishing (STM) publishers sold 49,256; religious publishers sold 29,072, and educational/K12 publishers sold 18,845. If we combine trade and STM (there is a huge overlap in those sectors in Brazil) and extrapolate to find the sales of the whole market, we will get 332,000 units sold, very close to our first estimate based on DLD’s numbers, and this number would account for only 0.23 percent of all trade and STM book units sold in Brazil in 2012.
In a detailed projection for 2013, trade and STM ebook sales are expected to account for 2.6 percent of the market share by the end of December (Carlo Carrenho, “E-books Responderão por 2,63% do Mercado em 2013,” 16 January 2013; reviewed in “Estimada em 0.23% a Participação de E-books no Mercado Brasileiro em 2012,” August 1, 2013).
The Brazilian ebook catalog is still growing steadily. In May 2013, after analyzing the titles on the e-shelves of the major retailers in Brazil, the website Revolução eBook disclosed numbers for the overall Brazilian Portuguese ebook catalog. According to the research, about 25,000 Portuguese ebooks were available. This includes both commercial and free titles. This represents huge growth in the months since February 2011, when the website estimated 11,000 titles. Apple had the largest catalog with 18,000 e-books available, followed by Amazon with 15,800 titles.
On the mergers and acquisition front, the Brazilian digital aggregator Xeriph was partially acquired by media giant Abril in May 2012. Abril now holds 70 percent equity in Xeriph.
For a broader overview on local and international actors who are particularly active on the Brazilian ebook market, see below at Distributors and aggregators
Key Indicators | Values | Sources, Comments |
Book market size (p+e, at consumer prices) | US $3,716 million (publishers’ revenues) | PublishNews |
Titles published per year (new and successive editions) | 57,473 | PublishNews |
New titles per 1 million inhabitants | 109 | |
eBook titles (available from publishers) | 25,000 | Revolução eBook (commercial & free, May 2013) |
Key market parameters | Books are tax-free; government sales account for 26.4% of publishers’ revenues |
Amazon, Kobo, Apple, and Google have all complained and keep complaining about the Brazilian tax system, and that was the excuse for delays in launching locally. The tax problem, however, is essentially a good one: books are tax-free in Brazil. That is, the only taxes a publisher pays are on earnings and personnel taxes—there are no VAT or sales taxes. This is true for printed books, but when it comes to ereaders and ebooks, everything becomes complicated if a company wants—and it should—to keep its tax-free status.
So far, everyone is treating ebooks as tax-free products, just like their printed counterparts. Despite there being no written law guaranteeing that this will continue, everyone is trusting in the spirit of the law. When it comes to ereaders, though, no one expects to sell or import them tax-free unless the National Book Law is amended to include dedicated readers.
The Brazilian senate is still discussing a bill that would officially make both ebooks and dedicated E-Ink readers tax-free. If the bill passes, the prices of E-Ink Kindles, Kobo devices, and Nooks would have to come down steadily. Importation taxes on dedicated e-readers could be as high as 60 percent depending on how the ereader is categorized within the broader field of electronics.
What really complicates taxes in Brazil relates more closely to ebook distribution models. Although books are tax-free, services are not. If one buys and sells books, no tax is involved, but if one classifies the distribution work as a service, one may pay up to a 14.25% tax on revenues. This is known as ISS and PIS/Cofins. Of course, this challenges the agency model. Understandably, Brazilian publishers want to control retail prices of ebooks to avoid deep discounting, and to avoid deep discounts, the agency model would be perfect, especially if we assume only a standard 30% U.S.-style discount, which is much lower than the typical 50 or 55% that big Brazilian retailers demand from publishers. This is what everyone thought at the beginning of ebook trade until an accountant told everyone that taxes should be paid using the agency model. As if that were not enough, the market is still discussing whether the agency model is even legal in Brazil, and no one has emerged with a definitive answer.
So far, the contracts signed by the large Brazilian publishers tend to follow the wholesale model, with the exception of Apple, which is technically selling Portuguese books from abroad, making it easier to use the agency model. When negotiating with Amazon, the big publishers were able to include a discount limitation on the contracts, creating consumer price control in a wholesale deal.
Because books are not technically tax-free yet, big Brazilian publishers are avoiding exporting to them. That is why a great part of the Brazilian ebooks available at the Amazon local store, for instance, is not available for American and European customers. Exports will require significant additional tax control and paperwork, so the publishers have declined to take further risks for the small revenues that they can expect.
If tax issues were not a good enough reason for digital publishing and bookselling executives to visit Brazil regularly, the power of federal government book purchasing is.
As we saw above, the public sector generated over 26.4% of publishers’ revenue in 2012, and the truth is that the ebook revolution will only get major traction in Brazil when the government decides to go digital. However, that may happen faster and more easily than many may anticipate.
First, one must remember that the Brazilian government is strongly emphasizing its digital agenda. Elections are digitally controlled nationwide, and winners are announced a few hours after any ballot. The Brazilian Internal Revenue Service has been receiving income tax declarations electronically for years. The inflationary 1980s and 1990s forced not only the banks but the whole financial system to develop online services long before the Internet was a reality, and that included the government. That being said, the Brazilian government will undoubtedly embrace ebooks as soon as the savings to be expected from such an innovative move are clear.
Actually, digitized government book purchasing in Brazil has already begun. In November 2011, the federal government included digital content in the 2014 edition of its Programa Nacional do Livro Didático (PNLD), which acquires all educational books used in public schools. Initially, the plan only proposed buying DVDs. However, for the 2015 edition, the government asked specifically for ebooks, and educational publishers are delivering digital content for evaluation in the second half of 2013. Since the PNLD alone purchased U.S. $537 million worth of books in 2012 (again, more than 22% of publishers’ revenues), the potential here is great.
However, the PNLD is not the only potential bulk purchaser. In 2012, the Ministry of Education bought 600,000 tablets for public schoolteachers. In the beginning, no attention was given to the content that such devices would carry, and the tables have not been distributed yet. More recently, the federal government started a bidding process to choose the reading platform to be used in these devices. Amazon and Saraiva are already approved, but the process has not ended yet. It is hoped that the tables will reach the teachers’ hands before they become obsolete.
Another area of Brazilian government participation in digital publishing that cannot be neglected is the purchase of academic content, either via licensing or ebooks. These purchases are made by CAPES, a federal organization linked to the Ministry of Education that supports nationwide graduate courses and initiatives. The CAPES Periodicals Portal offers Brazilian graduate students free access to about 31,000 journals and 150,000 ebooks. In 2011 alone, for instance, CAPES spent US $71 million on digital periodical licenses and ebooks for its library. No wonder Wiley has just opened an office in Brazil, and Springer is also moving in that direction. Brasilia is definitely becoming an important city in the digital publishing geography.
While the digital retail front in Brazil is dominated by global actors, the distribution and aggregation services have not involved foreign companies so far. Furthermore, Brazil lacks a good general independent ebook distributor with state-of-the-art technology. There are four ebook distributors of note in Brazil:
Xeriph, recently acquired by media giant Abril, controls the largest ebook catalog in the country. It distributes 240 Brazilian publishers and has commercial deals with telecom companies to provide content to their cloud-based ebook platforms. The company was a pioneer and has been creative in developing its distribution models, from selling games to aggregating content for telecoms, universities, and libraries. It has 14,000 titles in its catalog.
DLD was launched in April 2011 after months of preparation by six of the largest Brazilian publishers: Record, Sextante, Planeta, L&PM, Rocco, and Objetiva. In August 2012, NovoConceito, the house of Nicholas Sparks in Brazil, joined the sextet. Originally, DLD was a defensive movement, a print publishers’ club to keep out digital interlopers. After a while, though, the club members realized that ebooks were an opportunity, not a threat. By the time they all reached that conclusion, they already had a functioning platform and signed deals. DLD offers 3,000 titles in their catalog. This number might be misleading, however. A glance at the PublishNews bestsellers list, which provides the most reliable ranking in Brazil, shows that DLD publishers are responsible for a third of the print bestsellers on the list. Their technological platform has been recognized as a very good and reliable one by most retailers.
Acaiaca is one of the largest national book distributors in Brazil. It is privately owned and has recently launched their Acaiaca Digital venture. They are set to become another digital aggregator and already have some publishing houses to distribute. They also have a deal with Clube de Autores, the largest self-publishing company in Brazil, to distribute digitally their more than 25,000 authors that are only available in print today.
Minha Biblioteca is a consortium of the largest Brazilian textbook publishers —Saraiva, Atlas, Grupo Gen, and Grupo A— with the goal to distribute their digital content. They use Ingram’s Vital Source platform to offer cloud-based e-textbook licenses to universities but also work on a traditional wholesale model if that is the client’s desire. They offer over 3,500 titles and have already signed 26 universities.
The ebook retailers’ scenario in Brazil replicates the American one. Amazon, Google, Apple, and Kobo are present. Barnes & Noble is not around, but the local bookstore chain Saraiva fills the gap in a very similar way. In addition, there are some minor companies trying to find their spaces among the big guys.
Amazon While Kobo is often portrayed as the nice guy in the Brazilian market, Amazon has faced some resistance when negotiating with local publishers. It took several months of back-and-forth contract negotiations for the Seattle giant finally to put together a catalog and launch their store in December 2012, and to reach a final deal with the big Brazilian publishers, Amazon had to accept discount limitations in their wholesale agreements even though no agency model was used. Currently, Amazon sells only ebooks in Brazil, and even to distribute its Kindle devices (Touch and Paperwhite), it depends on local partnerships with the retailer Ponto Frio and independent bookstore chain Livraria da Vila. Actually, this is the largest challenge that Amazon faces in Brazil, i.e. the fact it does not have any physical logistics and almost all book and electronics retailers refuse to carry Kindles due to competitive issues. Even Ponto Frio refuses to sell the devices in its brick-and-mortar stores. This situation made Amazon get creative, and in a partnership with a local company, Kindle kiosks were opened in the main malls of São Paulo and Rio de Janeiro to sell Kindles to Brazilians physically. This bottleneck sales problem might end soon, however. Amazon is starting to sign contracts for physical distribution in Brazil, which means that they will solve the logistical issues in the next months, and when they are able to ship books, they will be able to ship Kindles—or anything—and play ball in a much more aggressive way. Amazon also has a strong local team in Brazil.
Apple Apple opened its iBookstore for business in Brazil in October 2012. Even better, it started to sell Brazilian ebooks on that day, since technically a de facto Brazilian store was never opened. When Apple realized it would be a nightmare to use its agency-based business model in a place where books are tax-free but book-related services are not and no lawyer can ultimately guarantee that agency or even retail price controls are actually legal, it decided to use the American iBookstore to sell in the Brazilian market in American dollars. The result, therefore, is not a traditional Brazilian iBookstore but a window of access to Brazilian content available in the American store. This solution, however, also brought some problems. First, Brazilians pay a 6.38% IOF tax when using their credit cards abroad. Second, purchases must be carried out with international credit cards, and only 15% of the Brazilian population possesses them. Finally, the currency conversion only takes place when the credit card invoice is closed and the customer will only know the final price in Reals (R$) when they pay their credit card bills. However, despite all the odds, Apple succeeded in becoming the #1 ebookstore in Brazil during the first half of 2012. Similar to Google, the reason for that is the huge base of existing iPhones and iPads in Brazil, plus the easy shopping experience that is simple and familiar to an audience that already consumes music and apps. Apple’s main challenge in the short term is to launch a real Brazilian store selling locally in the local currency.
Gato Sabido Gato Sabido was the first Brazilian ebookstore, launched in December 2009. Their startup owners then decided to launch the digital aggregator Xeriph and focus on the new venture. Now, that the Abril group has acquired Xeriph, the future of Gato Sabido is uncertain since Abril already has its own ebookstore IBA. Gato Sabido today offers no ereaders and uses Adobe Rights Management.
Google Google Play’s bookstore section arrived in Brazil on the same day as Kobo and Amazon, in October 2012. Their contract negotiations were lighter and more discreet. They have been quite successful in selling ebooks thanks to the huge base of Android smartphones and tablets in Brazil. For instance, almost 6 million tablets are expected to be sold in Brazil in 2013, according to IDC, and considering the most recent reports on iOS/Android tablet market share, at least 80% of those will be Android. Brazil also has the fourth largest installed base of smartphones in the world, and according to Nielsen, over 90% of the smartphones sold at retail in the first half of 2013 were Androids. It is fair to say that many of those initial Google sales are people experimenting with ebooks and testing the store. Google actually has a very low customer return rate, and most purchases up to now have been made by first-time customers. While Amazon sells more backlist titles than any other retailer in Brazil, Google Play’s front store accounts for around 80% of the sales, making it a very bestseller-focused ebookstore.
IBA IBA was launched in March 2012 by Grupo Abril, one of the largest media companies in Brazil, with a huge presence in magazine publishing, K–12 book publishing, and cable TV. It presents a very solid platform, with a proprietary DRM control, so the readers do not need an Adobe ID. The purchases are made on the website, and the reading is done in apps for iOS, Android, and PC. It is greatly focused on magazines and newspapers, perhaps even more than on ebooks. It has not gained much traction in the ebook market so far.
Kobo Following its strategy tested in Europe, Kobo’s business model for Brazil was to partner with a strong local retailer, and they found one in Livraria Cultura, one of the most important Brazilian booksellers, with 16 stores around the country. Livraria Cultura also has a very strong ecommerce background since it pioneered selling books online in Brazil during the late 1990s. Kobo took advantage of the existing Livraria Cultura ebookstore—that they merged into their platform—allowing them to save several months in contract negotiations and to launch in December 2012. Kobo offers Touch, Mini, Glo, and Aura devices in the Brazilian market, so far always sold through Livraria Cultura. The level of exclusivity in the partnership deal has not been disclosed, but Kobo has been making an effort to have all contracts now signed directly with publishers and distributors. Kobo keeps a local team in Brazil.
Saraiva Livrarias Saraiva is the largest Brazilian bookstore chain, with over 100 stores around the country. Along with the publishing and educational divisions, they are part of a larger public company that ranks among the top three publishing groups in Brazil. They also have a strong online presence in the book market with a well-known ecommerce platform that also sells electronics, computers, and telecom products. Their ebookstore was launched in early 2010. Their platform is non-proprietary, based on BlueFire technology and on Adobe’s DRM. They do not offer a device but have iOS, Android, and PC apps. The main challenges that Saraiva faces today are global competitors and the need to find a way to better use its brick-and-mortar presence and brand to increase their ebook sales.
Submarino Submarino could be called the Brazilian Amazon. It is a large Brazilian e-retailer that sells everything from books to wine, cosmetics, and perfumes. They started an ebookstore in a partnership with Gato Sabido, but in September 2011, they canceled the deal and invested in a new partnership with New-York-based The Copia. They have not, however, shown any relevant traction in the market until now.
Brazil: Conclusion
There are other digital initiatives in Brazil. In higher education, for instance, Estácio de Sá, a private university of 260,000 students, is already offering digital textbooks to its students. Telecom companies such as Vivo, Claro, and Oi, too, are starting to offer ebooks for weekly fees to their mobile clients, and several magazines are going digital.
The growth of tablet sales in Brazil is probably going to be a key element for the development of the ebook market in the country. According to IDC, 5.9 million tablets will be sold in Brazil in 2013, and Nielsen has reported that retail sales of tablets increased 400% in the first semester of 2013 compared to the same period in 2012. Even more impressive is the fact that 94.9% of the tablets sold in at retail in the first semester of 2013 were Androids. On the smartphone front, Brazil is also a huge market. According to a study by Morgan Stanley, released on May 12, Brazil had 70 million smartphones, making it the fourth country in the world in the number of such devices. IDC expects 28 million smartphones to be sold in Brazil in 2013.
The tipping point for the ebook market was December 5, 2012, when Amazon, Google and Kobo arrived. This was a game-changer, and according to market trends, 2013 will be the first year of digital growth in Brazil—just in time for Brazil to host soccer’s FIFA World Cup in 2014, when the digital market will tend to grow even more, helped by the booming market for tablets and smartphones.
In 2013, several initiatives occured that together will probably reshape the scope and impact of ebooks - and more broadly, of the digital dissemination of copyrighted content - in China, as the world’s most populous country has “overtaken America to become the world’s biggest e-commerce market, in terms of sales.” (The Economist, 21 September 2013). In 2012, the Chinese mobile Interet reportedly accounted for RMB 159 billion of sales (ca. $26 Billion, according to China Internet Watch; the report includes an overview of the most popular ereading devices and apps, and their estimated market share.)
With a mobile phone user base of 1.1 billion by mid 2013 (BGR blog, 26 June 2013), and a strong increase in the penetration of smart phones, mobile platforms are the key for the dissemination of copyrighted content, including ebooks, as its “reading population is gradually shifting online.” (Quoted from a strategy paper issued by the technology ompany Huawei, “Mobile reading as a strategic focus”)
Accordingly, many observers see mobile phone operators, led by the giant China Mobile in a unique position to develop platforms that bring notably young users in China’s huge urban agglomerations the content they are looking for, and ebooks are an integral part of it. Respective plans go back to 2010, when China Mobile already had announced plans to “build China’s biggest ebookstore”. (Publishing Perspectives, 16 May 2012), but it took until 2013, and a broader upswing for mobile commerce to pick up speed. The stakes are high, given the strong competition from domestic giants in e-commerce, so that “even a company valued at $126 billion can’t mess with Jack Ma’s homegrown powerhouse Alibaba Group Holding, which owns Taobao Marketplace and Tmall“, as Bloomberg summarized the situation at Amazon’s launch. By mid-2013, the most popular platforms for ebook downloads are estimated to be China Mobile and Cina Unicom, followed by Amazon and 360. (Cheng Sanguo, BookDao, for this report)
In June 2013, Amazon has entered the Chinese market in a “long-overdue release of the Kindle" (Bloomberg, 10 June 2013) by launching a dedicated Chinese platform, and promoting notably its tablet, the Fire, among Chinese readers. The Kindle Paperwhite was prized at $138, the Fire HD starting at $244.
In order to strengthen its on position with regard to ebooks, the leading domestic Chinese online platform for books, Dangdang, has started a campaign in spring 2013, offering their entire digital catalogue for free. (The Digital Reader, 22 April 2013)
Also in 2013, and after a several years long struggle ofver licensing details, Apple’s iPhone was cleared to run on China Mobile’s networks. (WSJ 11 September 2013)
Bt also in less grandiose dimensions, China is build an infrastructure to be a part, and a competitor, in the global exchange of digital content, including books and journals. For the latter, the import and export arm of China Publishing Group, CNIEPC, has launched a new platform for accessing the international e-journal segmentat the Beijing International Book Fair in Auust 2013. (Teleread, 30 August 2013)
In the meantime, another strong and innovative player in China’s efforts to bringing books and reading online, Cloudary - formerly branded as Shanda - seems to have cut down on its plans for international expansion, by closing the respective departments altogether. (Information received for this report) Shanda Cloudary has also withdawn its initial plan for an IPO in 2013, pending since 2012, yet closed a round of direct funding. (Technode, 15 Julay 2013)
By Veronika Licher
The “12th Five-Year Development Plan for the Press and Publication Industry” that China released in 2011 approved, among other things, 23 projects in support of digital publishing or technological innovation. The creation of five new “national digital publishing bases” in 2011 made for a total of nine such enterprises, with a combined revenue of ¥42 billion, or 30.5 percent of total Chinese/global revenue for digital publishing in 2011. Even at the September 2012 exchange rate of about ¥6.28 to the US dollar, this is a considerable amount (Liu Binjie at Beijing International Publishing Forum [BIPF], August 28, 2012).
As Liu Binjie, minister of the General Administration of Press and Publication (GAPP) and of the National Copyright Administration, pointed out at the Beijing International Publishing Forum held on August 28, 2012, the government shows great interest in encouraging (and guiding) the development of digital publishing in China. Four administrative decisions support the effort. First, the government will give a significant percentage of special funding for cultural development to digital publishing projects. Second, strategic investors and financial capital will be encouraged to focus on cultural industry. GAPP has signed strategic cooperation agreements with several important Chinese banks to provide loans (up to several hundred billion yuan, according to Liu) to enterprises in digital publication. Also, technology and publishing operations will be urged to forge closer ties. Thus, GAPP has signed agreements with several companies in the communications sector, including China Mobile, China Unicom, and China Telecom. To hasten the growth of industrial and digital publishing initiatives, the telecom organizations will help propel the digitization process of traditional publishing as well.
In 2011, China’s epublishing market (or digital publishing operating income, which includes not only books but all digital content industries) grew by 31 percent to total revenues of ¥137.8 billion (China Daily, August 29, 2012; GAPP’s “2011 Nationwide News and Publication Industry Analysis Report,” July 7, 2012).
According to the GAPP report for 2011, all national publishing, printing, and distribution services combined achieved an operating income of ¥1.46 trillion, a 17.7 percent increase of 219.3 billion over 2010. There was an added value of ¥402.2 billion, a 14.8 percent increase of ¥51.83 billion.
A July 2012 press release for the Beijing International Book Fair (BIBF) asserts that China is the second-largest publishing market in the world. Yet a comparison of the publishing market in China to those of North America and Europe must take into account not only great disparities of income levels and standards of living, but also significant differences in the structure of the market and consumption patterns.
Over the last decade, China has made considerable efforts to grow and professionalize its (printed book) publishing sector. Although all of China’s approximately 580 publishing houses are under direct state ownership and control by GAPP, during the last 10 years some 10,000 “cultural studios” have been created, of which many act as publishing units but with cooperative contracts with the state-owned houses for ISBN assignment. By acquiring the foreign rights of more than 10,000 titles per year (2011: 14,708 titles, an increase of 7 percent over 2010; Lei Ren citing BIBF in her article in Publishing Perspectives, September 6, 2012), Chinese publishers aggressively broadened their lists with internationally competitive works.
The government has played an active role in encouraging the best-performing groups to form larger entities and compete internationally under the guideline of its “going out” policy. By November 2010, 435 of 528 officially listed state-owned publishing houses had undergone restructuring. The goals of this effort are to create more competitive companies and to identify those that should prepare to develop international strategies as well as to go public (notably on the Shanghai stock exchange).
In this way, in late 2010, a new entity branded the “China Education Publishing and Media Group” was launched, with a projected turnover of ¥6 billion—combining the former Higher Education Press, the People’s Education Press, plus several smaller entities—to successfully confront the challenges of the digital transformation and to reach out to international partners. Several of those groups are preparing for going public.
For Jiangsu Phoenix Publishing & Media Group Co., Ltd. (PPMG) in Nanjing (the Chinese partner for the French Hachette group) as well as Hunan Publishing Investment Holding Group Co., Ltd. in Changsha for example, the main business revenue and total assets exceeded ¥10 billion as reported by GAPP (China Market Insight, BIBF 2012; GAPP 2011).
Key Indicators | Values | Sources, comments |
Book market size (p+e, at consumer prices) | €14.2 billion | ¥118,000 million (General Administration for Press and Publications, GAPP, 2012) |
Titles published per year (new and successive editions) | 414,000 | GAPP |
New titles per 1 million inhabitants | ||
Electronic publications | 11,154 | GAPP, 2011.; Figures do not include “online literature” titles, which are not comparable, e.g., 6 million (2012, Lisa Zhang, interviewCloudary, for this report). |
Key market parameters | CEB | China Ebook Format, a domestic ebook format, notably promoted by Apabi (of Founders company); fixed prices for ebooks |
Both houses, as is typical for Chinese publishing houses, cover a wide range of topics in their publications, from philosophy, management, youth, and children to general trade books.
“Zhong Nan,” short for China South Publishing & Media Group Co., Ltd., in Changsha, founded in 2008, has recently become number two in the list of China’s top publishing ventures on a GAPP ranking that combines several indexes. This development has been driven by Chairman Gong Shugang, who is known for his aggressive stock market strategies (interview by Veronika Licher with Publishing Consultant Cheng Sanguo, Beijing, September 2012).
China Education Publishing & Mediaholdings Co. Ltd., in Beijing, chaired by Li Pengyi, is listed as number three on this ranking. As a state-owned enterprise, the group specializes in publishing and distributing textbooks, periodicals, digital publications, and educational equipment.
For some companies, finding the right time to announce their IPO is a tough choice, given the current worldwide financial climate, but also with regard to domestic political developments in China. Many strategic decisions are currently on hold, in anticipation of a changing of the guard at the 2012 National People’s Congress in October 2012. In the meantime, industry leaders are reportedly focusing on acquiring more knowledge about the financial sector, to better prepare for the coming expansions of their international and domestic markets. Change management, handling transitory processes, and developing human resources are among the top priorities for Chinese publishers, as they welcome their international counterparts at BIBF 2012, including Youngsuk Chi, the chairman of Elsevier; John Makinson, member of the Pearson Board and Chief Executive of Penguin Group; and Ronald G. Dunn, President and Chief Executive Officer at Cengage.
As a result of the “going out” policy, the development of international ambitions has been energetically encouraged by GAPP, and some 459 Chinese press and publishing organizations have recently opened overseas branches, 28 of which include book publishing activities (China Daily, August 28, 2012, quoting GAPP statistics). This development started as recently as 2007, when China Youth Publishing House (CYPI) became the first Chinese publisher to start an office in London, now celebrating its fifth anniversary during London Book Fair 2012.
Beijing-based medical publisher People’s Medical Publishing House (PMPH) was founded in Beijing in 1953, and today is the leading publisher of medical texts and medical education in China. In 2008, it opened a wholly owned subsidiary in the US after having launched its first English-language title list in 2006 (press release of PMPH, January 24, 2008).
There are at least three specifics that shape the Chinese environment in digital publishing and reading: hugely popular online reading platforms, with 100 million Chinese Internet users who have opened accounts; the prevalence of mobile devices for on-screen reading; and a high percentage of mobile Internet users reading “literary works through apps”. And the market for online literature is still growing rapidly, as shown by a report from iResearch, with revenue going from ¥150 million in 2010 to ¥600 million in 2011 (“China Market Insight,” BIBF 2012, by Lisa Zhang).
On the content side, by far the most influential individual player, according to all accounts, is Shanda Literature, or, as it was rebranded in 2011, Cloudary Corporation. According to reports from iResearch and iRead, Cloudary is said to control 72.1 percent of the revenue of this market segment (interview with Lisa Zhang for this report) of the booming online literature market in China. According to a Reuters report, Cloudary is preparing a $200 million IPO at the New York Stock Exchange (Reuters, May 24, 2011). Cloudary is a branch of Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA), operating six websites for user-generated online literature, notably www.qidian.com and three offline publishing companies, as well as digital magazines and an audio book platform. Among the top ten literary websites, five websites are from Cloudary (interview with Lisa Zhang).
The vast majority of Cloudary’s content—very often serialized works—is therefore generated by amateur writers who use the platform to build a community of readers; even for some particularly successful authors, it is common to turn one’s works that were initially published online into printed books under a revenue-sharing agreement with Cloudary.
As of March 2012, Cloudary claimed to have published on its websites nearly 6 million titles from more than 1.6 million authors (the equivalent of 10 percent of the population of Beijing), at a rate of 80 million characters being written and published online every day. By March 2012, the accumulated number of users/readers was said to be 123 million (interview with Lisa Zhang).
Cloudary had over 950,000 paying users in the fourth quarter of 2010, and 50 percent of the net online revenue was derived from online user subscription payments, adding up to ¥103 million (up from ¥37.4 million in 2008): 29 percent from wireless services (growing from ¥1.4 million in 2008 to ¥60 million in 2010) and 10.2% from online advertising (up from ¥3 million in 2008 to ¥21 million in 2010). Cloudary was the largest paid content provider for China Mobile’s central reading station in 2010.
In October 2010, Cloudary/Shanda Literature launched its ebook platform Yun Zhong Shu Cheng, meaning “Library in the Clouds” (source).
Over the last decade, China saw the rise of many major online platforms for all domains of Internet-based communication and ecommerce, including online search (www.Baidu.com); the trading platform Alibaba, which includes an online payment system (Alipay); and Yahoo! China (acquired in 2005); as well as—in the case of books—online retailers DangDang, Amazon, and Jingdong (www.360buy.com) (interview with Cheng Sanguo for this report).
In recent years, all these platforms have—each in their respective field of action—engaged in aggressive price wars motivated by very price-sensitive consumers; plus, they had to agree to the terms of the Chinese government’s strict policy of control over any content, both domestic and from abroad, on sensitive political and social issues, banning unwanted websites, and very effectively discouraging domestic content providers of any kind from referring to topics considered to be controversial (for a detailed account, see this study by Octavio Kulesz for the International Alliance of Independent Publishers titled “Digital Publishing in Developing Countries”).
As for publishing, a premier role is being played by China Mobile, by far the country’s largest communications provider and a Fortune Global 500 company (ranked number 87 in 2011), with 610 million subscribers as of June 2011 and with 300 million mobile Internet users in 2012, a number that is expected to more than double by 2013. China Unicom and China Telecom range second and third. In October 2011, China Mobile started a new business model called Yi Book Store. Customers can order books via mobile phone and—as an innovative approach to services—pay cash on delivery. The China Mobile Portable Reading Platform holds a book collection of 300,000 titles (as of February 2012). The accumulated amount of customer visits since 2010 is said to be 300 million, reading 400 million pages per day (information provided by China Mobile, at BIBF 2012).
Although the ambitions of China Mobile to shape the entire digital sector are huge, it has yet to be seen which sector, after the current transition period, will have the upper hand in defining the digital future. At this point, three angles can be identified in this strategic competition: the (mobile) network providers, led by China Mobile; the manufacturers of hardware devices, notably Hanvon, but also most recently Huawei; and the content providers, which include publishers as well as various online platforms.
By summer 2011, it became clear that hardware manufacturers in particular were facing an increasingly tough economic environment. eReader manufacturer Hanvon reported significant losses, and both Founder and Aigo announced plans to stop production of ereaders altogether. The new competitive situation was brought about by price wars for reading devices, especially since the spring of 2011, as well as new platform competition from tablets—notably Apple’s iPad—and the major companies have reoriented their strategy by launching content-based ventures (source).
Hanvon, founded in 1998, is thought to control an estimated two-thirds of the markets for E Ink–based reading devices, claiming over 1 million units sold. In its own ebook shop, Hanvon claimed in March 2011 to have 130,000 ebook titles available for download and to soon be expanding that number to 200,000 titles (http://bit.ly/xWRyHn). In June 2011, Hanvon signed an agreement with Shanda to gain access to Shanda’s ample list of online titles on its “Cloudy Bookstore.” Shanda’s own device, the Bambook, introduced in 2010, is assumed to come in second, at a low double-digit market share (http://bit.ly/zoCfes).
Doukan (“All to see”), a proprietary reader sold by DangDang, has gained a reputation of poor usability, resulting in growing popularity of the Kindle among Chinese consumers (interview with Cheng Sanguo).
As Jon P. Fine declared on his second visit to China during the Beijing International Publishing Forum on August 28, he soon hopes to officially import Kindle devices to China.
eBook distribution platforms of relevant size have also been introduced by a number of publishing companies, such as www.Dajianet.com, launched by China Publishing Group Corporation, one of the largest players in the Chinese publishing industry.
Reading as well as writing platforms, bundled with ebook distribution to large user communities, have been introduced by several more popular portals, such as Sina.com, China’s huge infotainment portal and microblogging website (http://book.sina.com.cn).
Domestic ebooks are most commonly published in CEB, or China Ebook Format, promoted in particular by Apabi (founded in 2006), the former digital content division of Founder Group, a major Chinese technology conglomerate. The CEB format has also been used by European and American publishers for introducing their ebooks to the Chinese market (such as by Penguin, when converting more than 2,000 titles into CEB in 2009 and distributing them via Founder Apabi; http://pear.sn/wIcKjO).
Over the last ten years, at an accelerating pace, most major international publishing brands have looked at establishing cooperative ventures with Chinese counterparts, a movement that was actively welcomed by Chinese authorities. This list includes, to name just a few examples, companies such as Penguin, which opened a Beijing office in 2005; Hachette, which announced its joint venture with Guangdong-based Phoenix Publishing & Media Group in 2009; Cambridge University Press; and Amazon.com, which acquired the domestic online retailer Joyo.com in 2004 and since then has operated the localized version of its store, branded since 2007 as www.amazon.cn. In 2012, Hachette also opened an office in Hongkong.
By Vinutha Mallya
The overall book market in India is at the cusp of major changes, but in the direction of growth. Fuelled by a growing economy, a burgeoning middle-class, and higher literacy levels, the expanding book market is preparing itself for the next big curve—ebooks. With more capital being invested in the book and education industries, the Indian book sector is a ground for experimentation and innovation.
The book market in India is estimated to be in the range of $2 billion in value, according to industry sources. About 18,000 to 19,000 publishers publish a volume of nearly 80,000 to 90,000 books a year. After the US and UK, India ranks third in the world in English-language publishing. More than half of all print books published are in Hindi (26%) and English (24%), and the rest are books published in 22 other official languages of India.
According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the publishing industry is growing at a rate of 30% compound annual growth rate (CAGR)—a trend aided by the opening up of foreign direct investment (FDI) in the publishing industry, up to 100%, in the year 2000. Almost all the multinational publishing companies have a presence in India now, but the bulk of Indian publishers are made of family-owned, small-scale businesses.
While the boom in publishing augurs well for the growing print book industry, the ebook market in India is currently expected to be less than 1% of the total book market. A market intelligence study by Netscribes predicted that the Indian ebook market will grow by 20–25% in the next 2–3 years. The education sector (K–12, higher education, academic) has been the early adopter of elearning and econtent in the last decade. Although over the last 5–6 years ebooks have made a presence in the academic books segment, most of them do not originate in India. Almost all of the online educational content and digital book publishing available is currently in English.
According to Nielsen Bookscan data, which tracks 40% sales of trade books in India, sales of 15.5 million units valuing Rs 425 crore ($70.8 million - with one crore being a unit in the South Asian numbering system equal to ten million) were recorded in 2012. Of this, the break-up was, for fiction: 24%; non-fiction: 44%; and children’s books: 20%. Nielsen estimates that at retail price, the value of total sales of trade books in English language (including imports) is at Rs 1065 crore ($177.5 m).
Trade publishers have been exploring e-publishing and several have released ebooks since 2012, but their impact is yet to be measured. The available evidence suggests that popularity of ebooks is rising. Issues of piracy, plagiarism, and a lack of awareness about copyright continue to be a concern here, but policies and legal frameworks have been put in place to address them, such as the revised Copyright Act (in 2012) and the strengthening of the Indian Reprographics Rights Organization (IRRO). Print book penetration has been long-challenged by a fragmented value chain (especially at distribution level), poor infrastructure, and the lack of access to and affordability of books. India is one of the lowest priced book markets in the world, yet book publishers lose 20% of sales due to pirated printed copies.
Although the literacy levels in India increased by 9% in the decade of 2001–2011 since the last decade (literacy rate is 74.04% for 1.2 billion population in 2011), there are acute fissures in access to digital opportunities. Of all the literate people in India, those that are literate in the primary language of digital information, i.e. English, make up 6% of the total population.
The Government of India is leading several initiatives to promote digital literacy and provide access to digital content at school and college levels. National level missions such as the Rs 4612 crore ($768.7 million) National Mission on Education through ICT (NME-ICT) have been introduced. The NME-ICT is working in collaboration with other related missions and schemes—National Knowledge Network, Scheme of ICT in Schools, National Translation Mission, and the Vocational Education Mission.
The country’s well-established IT software industry has made India a sought-after destination for outsourced services. Nearly 60% of global publishing industry’s outsourcing of business processes comes to India. Conversion and digitization of backlist and archives tops the list of services sourced, according to the analytics agency, ValueNotes. India leads ahead of US, UK, Philippines, and Europe in the publishing industry’s business process outsourcing (BPO) segment because of its price advantage.
The proliferation of personal devices for accessing content is expected to create the demand for book content on digital platforms. E-ink devices for ereading were picking up sales in 2011 and early 2012 in India. The sale of home-grown versions—Wink Reader (now discontinued) and Infibeam’s Pi—and later, of Kindle, created an entry-point for ebook reading. Now there are more than 70 reader devices available in the market.
However, by late 2012 the surge in tablet sales suggested that India would opt to migrate directly to tablets than use a single-purpose device like an ereader. The evidence in 2013 shows that smartphones and phablets might outsell tablets, and become the preferred devices for consuming a range of digital content including books. So far, most ereading devices and book-related apps have piggy-backed on the bulk of freely available out-of-copyright digitized books, classics from around the world, and have been able to attract consumers to access books on a digital device. In India, because it is a low-priced editions market, especially in trade segment, ebooks don’t yet compete with print books since price is not yet a major differentiator. But publishers are experimenting and there is no pricing norm in place yet.
India’s large youth population (13–35 years) is a sizeable market potential for publishers. Estimated to be 459 million in 2009, youth constitute 38% of India’s total population. Of these, 73% youth are literate, with a majority residing in rural areas.
According to the National Youth Readership Survey 2009, [N1] half of the readers surveyed gave “knowledge enhancement” as the first reason for reading leisure books. The survey also revealed that more literate youth in urban areas were readers.
Soon after Independence in 1947, when literacy and education levels were dismal, school textbooks and examination-based reading were given priority by policy-makers—trends that remain strong to this day. This is seen in the ebooks segment too: several institutions, through their libraries, have been making ebooks available, primarily of science, technical and mediacl (STM) subjects, for students since the last 5–6 years.
The current demand for ebooks is coming from the six metropolitan (Tier I) cities—Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai. The Global E-Book Monitor of the market research firm Bowker, a 10-country sample survey conducted in early 2012, estimated that 2% of the Indian population has purchased an ebook during the period of study. The study also revealed that the typical ebook buyer in India is a college graduate, more likely to be male in the 25–34 years age group, working fulltime and living in a city. The perhaps explains another finding by the survey, that the majority of books downloaded were either from professional/business category or academic books /textbooks.
An annual sample survey by Tata Consultancy Services (TCS) among youth in the metro cities shows that smart devices and access are making youth “instant connectors”, and transforming the way that they are conducting not just their social lives, but also their academic lives.
According to estimates, India has about 200 million children under the age of 18, and 69 million of them reside in urban areas. Mobile devices have become an important utility for young urban parents to entertain their children with. A growing number of parents are exposing children to apps at an early age. In a survey of Generation Z by Ericsson ConsumerLab in 2012, 26% of survey participants from India were downloading a phone app for their kids at least weekly.
The latest New Generation Study by Cartoon Network, released in December 2012, revealed that one in 10 kids in the age group of 7–14 surveyed by the study owned a mobile phone. About 58% of the kids used computers but only 19% owned a computer. Nearly 87% used the internet at least once a week and 10% used it every day . Playing games, surfing for information and social networking are some of the preferred activities on the internet, the study reveals. The survey comprised of 3,100 children in 7–14 years’ age group, from 26 cities.
The The Indian Readership Survey, which studies mass-media consumption data, indicates a 27.5% increase in internet-based readership between beginning of 2012 and third quarter of 2013. In the same period, only a slight growth was observed in printed newspaper readership (0.7%).
An important result thrown up by Bowker’s study is that free content is a driver for ebook adoption in India. Over half the respondents to that survey had downloaded a free ebook in the six months prior to taking the survey.
India is now the world’s third -largest internet user, after the US and China, according to a Comscore report released in August 2013. Of the internet users, 75% are below the age of 35. But the report observes that women in the age group of 35–44 years are among the heaviest users in the Indian market.
Currently, much of econtent available in the country is in English, a factor that restricts a large section of people from using the internet. Internet users in rural India show a greater preference for localized content. At least 64% of internet users in rural India use the internet in local languages. [N2] Email is the most popular service, while online news and online banking in local languages are also becoming popular. Great expectations anticipate that in the coming years this pattern of consumption will give way to user-generated content in local languages.
In the absence of more reliable data on ebook readership in India, the patterns seen in consumption of eservices and ecommerce give some clues for future opportunities.
The ratio of computer literates in India was estimated to be 6.15% (224 million) of the population, last year. The digital divide in India is a result of several divides combined, namely a lack of access and affordability, poor infrastructure, and social inequalities.
Internet penetration in India was at 12.6% in 2012. According to the The Indian Telecom Services Performance Indicators report released by the Telecom Regulatory Authority of India in August 2013, the number of internet subscribers in India was 164.81 million by March 2013 (it was 150 million in December 2012). Of the total internet subscribers, 15.05 million were broadband connections; 6.56 million were narrowband connections; and a whopping 143.20 million accessed the internet through mobile phones. (These numbers are based on connections registered, but are not indicative of active users.) When it comes to mobile telephony, the penetration level is greater in urban India. In March 2013, of the total 867.80 million wireless telephone subscribers, 525.30 million were in urban centres.
While email is the most used service, 28% read news online and 25% users accessed apps. Online games were accessed by nearly 50% of mobile internet users. [N3] But social media is steadily outstripping all other uses in urban centres, as observed by the Comscore study cited above.
India registered 73.5 million mobile handset sales for the period January–April 2013, registering a growth of 11.1% year-on-year, according to CyberMedia Research. During the same period, 9.4 million smartphones were shipped in the country, showing a growth of 167.3% on an annual basis.
The sale of tablet computers is rising, strengthening the demand for variety of content. An estimated 3 million were sold in 2012, from 0.5 million in 2011, according to the research agency, which had predicted that 6 million would sell in 2013. The growth in shipments of tablets in India registered a 107.4 % year-on-year growth in the second quarter of 2013. About 1.15 million tablets were sold in just the second quarter of 2013 by as many as 70 domestic and international vendors, according to the research agency. Almost 80% of the tablet device models launched during this period were with both of 3G and Wi-Fi connectivity, leading to a growth of 103% in shipments of 3G tablets. Local brands are fiercely competing with global manufacturers for a share in the tablet market. The Indian consumer has no bias against local brands, perhaps because of the price-sensitivity of the Indian market.
It was only with the launch of Amazon’s Kindle India Store in August 2012 that a Kindle device (Kindle Wi-Fi 6”) was available at an introductory price in India when the US company tied-up with the local Croma retail chain. Until then, Kindle devices, and perhaps a few Sony eReaders, were imported. Kobo will launch in India soon, and the company already identified a retail partner. [N4] Kobo’s entry is likely to create robust competition to the ereader devices segment.
India’s preference for multi-feature devices that offer more value—over and above read-only devices like an ereader—is perhaps the reason for proliferation of low-cost and Android-based devices in the country. It is not surprising that 63.5% of tablets sold in the period between July–September 2012 were those priced below Rs 10,000 ($167).
Although the sales of smartphones and tablets are growing strongly, and tablets have outstripped netbook sales too, most ereading continues to take place on personal computers and laptops.
Government interventions in ereading technology
The launch of the “cheapest tablet computer in the world” – Aakash – brought attention to the potential that low-cost technologies have to revolutionise internet access among a mass population. Fashioned as a public-private partnership project, the Android-based Aakash was to be subsidized by Government of India for students. The device was to be procured by the Ministry of Human Resource.
Developed for Rs 2,263 ($38) by manufacturer Datawind Limited, it was to be made available to college and university students at Rs 1,130 ($19). Specifications for the third edition of Aakash were announced in early January 2013. But by end of January, the MHRD announced that it was thinking of shelving the project due to a supply gap coupled by the availability of other low-cost devices in the market. The future of the project remains uncertain.
In the meantime Aakash has reached the US, where pilots aimed at helping schoolchildren learn maths and other subjects have been underway, in North Carolina and San Francisco. The company supplied 100 devices at $45. Following the pilot, about 2000 units have been shipped.
In August 2013, it was reported that the government was exploring plans to develop and sell smartphones costing less than $100 to Indians, to drive the country’s broadband push. More recently, it was reported that the government was setting aside Rs 10,000 crore ($1,666.67 m) to give away 2.5 crore (25 million) mobile phones at subsidized rates in rural areas and 90 lakh (9 million) tablets free of cost to students of classes 9 and 10 studying in government areas.
At least 60% of all printed books sold in India are educational books. The emphasis on education has enabled early adoption of digital content in Indian universities, for almost a decade now. In the higher education and academic category, especially in STM segment, ejournals have been available to institutions and libraries. Journals published by publishers like Springer, Taylor & Francis, Elsevier, and Wiley were among the first. Much of the content available for the STM category originates outside the country. But in Social Sciences and the Humanities, a modest list of journals are being published in India, chiefly by Sage India, which publishes 50 journals in Humanities and Social Sciences. One of the largest distributors of e-resources to institutions and libraries in India, Balani Infotech, part of iGroup (Asia Pacific Limited), distributes a wide variety of electronic content—ebooks, PDF documents, audiobooks, ejournal issues, classic literature for K–12, and more—produced by over 200,000 publishers from around the world.
Under the Government of India’s National Library and Information Services Infrastructure for Scholarly Content (N-LIST) of _INFLIBNET_—the online digital library linking universities and colleges—nearly 80,000 e-books and thousands of high quality paid e-journals have been made available to research institutions, universities, and colleges across the country. Almost 90% of the ebooks in this network are sourced from the US-based Ebrary platform.
The Indian Government has been investing in electronic content creation too. Elearning courses from the national premier technology institutions, the seven Indian Institutes of Technology (IITs) and the Bangalore-based Indian Institution of Science (IISc) are being offered as part of the National Programme on Technology Enhanced Learning (NPTEL). The Ministry of Human Resource Development, Government of India, funds the NPTEL. The aim of the project is to enhance engineering education in the country. About 260 courseware modules were available in phase 1 in January 2013, from a total of 1216 proposed courses.
The government’s One-Stop Education Portal, Sakshat, launched in 2006, is to become a repository of educational resources for teachers and learners—from kindergarten onwards. The portal houses virtual classrooms and self-learning materials. A work-in-progress, the portal aims to synergise the work by national-level educational bodies like UGC, AICTE, IGNOU, IISc, IIT, NCERT etc.
India’s online education market size is valued at $20 billion and set to grow to $40 billion, according to an industry estimate. The current market size for digitized school products in private schools alone is around $500 million. Privately run schools account for 20% of all schools in India. The current market size for ICT in government schools is valued at $750 million, according to market research firm Technopak Advisors.
The increasing use of computers in classrooms in the course of the last decade has enabled the private education sector (in K–12, higher education, academic) to develop and adopt elearning content. In the K–12 segment, publishers like Pearson and S. Chand Harcourt have a strong presence in producing elearning materials and teaching aids, alongside educational companies like Educomp Solutions, iDiscoveri, Everonn, CORE, and IL&FS etc. Software service providers like Tata Interactive Systems and HCL Infosystems have also entered the school elearning space through partnerships with content providers.
The bundling of educational content with tablets is a growing trend. Micromax Funbook tablet has partnerships with publishers like McGraw Hill and Pearson, and with educational companies like Everonn Education and Vriti Education.
On the other hand, publishers are also launching tablets with content bundling. Pearson Education India recently launched MX Touch, a tablet-based education solution for Indian schools, in November 2012. Available in three variants, the MX Touch tablets host interactive activities and worksheets compliant with the school syllabi for grades 3–8. One of India’s largest educational publishers, the S. Chand Group, has launched Intellitab, a tablet that works on Android 4.0, which packs in curriculum-based content for each grade. The content is based on S. Chand Harcourt’s Destination Success curriculum-based interactive product portfolio. Over 500 schools, according to a company release, are using the Destination Success software suite.
The entry of MOOCs (massive online open course) is creating access to other forms of elearning content. The not-for-profit EdX, a MOOC platform founded by Massachusetts Institute of Technology and Harvard University, says that it gets a large fraction of traffic from India. In a recent interview, its CEO Anant Agarwal said that India consistently represents the second highest enrolments in EdX courses, after the US. The platform has partnered with Indian Institute of Technology, Bombay to make the latter’s courses available to a global audience.
E-textbooks
The government in India dominates the K–10 textbook segment by publishing textbooks for schools. The National Council of Educational Resources and Training (NCERT), provides its entire textbook range for download, as PDF files online.
Over 90% of all e-textbooks available for higher education in the country originate outside India, and are in the English language. [N5] Springer leads the list of ebook providers, with nearly 74,000 titles in the catalogue. Publishers listed once above, Taylor & Francis, Elsevier, Wiley, Sage, as well as Tata McGraw-Hill, Pearson, Cambridge University Press and Oxford University Press are selling ebooks in India now. Not just for STM, but ebooks on subjects like Law, Management, Social Sciences and the Humanities are being produced in digital formats, and being made available through the publishers’ websites. However, individual sales are very few, and most e-textbooks sell through library suppliers. Many publishers offer ebooks at discounted rates from their international prices, up to 50% in some cases, for bulk purchase by Indian institutional libraries.
Some online stores like Attano and SkoolShop are retailing a sizeable list of educational ebooks by Indian publishers, showcasing the early phase of indigenous ebook production in the education space. Attano hosts about 1500 books and 7500 educational videos for K–12, along with exam preparation materials, question banks and materials for college test preparation. It launched a new service called ChapterBuy in June 2013, to sell individual chapters from reference books for higher education in an ebook format. Attano will make available over 10,000 chapters, priced Rs 3 ($0.05) onwards, for engineering, management and commerce students. The company has partnered with Mumbai-based Sheth Publishers and Pearson for this initiative. Exam preparation materials, especially for entrance exams are also available through Vriti and The Digital Library.
Bharti Airtel, India’s largest mobile network operator, introduced test preparations and English-learning modules on mobile through its mEducation platform, which it launched in early January 2013. The service enables Airtel mobile customers to access courses for language skills, entrance exam preparation and career counseling for as little as Rs 2 ($0.02) per day.
More and more Indian publishers of educational books are digitizing their backlists and creating digital products from their frontlist. PHI Learning_’s list of ebooks (about 700 digitised titles) is available directly from their website. Medical books publisher, _Jaypee Brothers have published nearly 1215 ebooks, as well as produced 2250 videos on surgical procedures, available through their websites. Anmol Publications, a publisher of pure sciences, humanities and social sciences books is digitizing 6000 and more titles and offering those as ebooks. Publisher of Physical Sciences and Mathematics books, Hindustan Book Agency, is also in the process of publishing ebooks.
In the school-books segment, which is controlled upto 75–80% by the government bodies, private publishers have to operate in the remaining space. Yet, demand for books is increasing. Publishers like S. Chand, Ratna Sagar, Orient Blackswan are investing in creating digital products, both ebooks and online learning aids, although they feel that it will take another five years for students to start reading digitally in a big way. Orient Blackswan’s educational ebook sales are less than 0.02% of the company’s total sales, said a company representative. [N6]
Student attitudes towards e-textbooks, and other aspects such as quality of electronic versions of books, enhancements, and their integration with classroom pedagogy are yet to be examined and reviewed. There is no indication of e-textbooks being core textbooks for students yet. Anecdotal evidence suggests that there is a long way to go, for students to get seamless access to the electronic books both on and off campus.
Trade ebooks
There is a lot of activity in the trade ebook segment. Almost all major trade publishers (English-language publishers) have released ebooks. In July 2012, Penguin Books India’s was the first major e list, of nearly 240 titles, that was released in the market. Before Penguin, Hachette India had released a batch of ebooks in late 2011 and early 2012. Random House India too had released some titles as ebooks in 2011, and the ebook catalogue has now grown. HarperCollins India started releasing ebooks since September 2012, and although globally ebooks form 20% of HarperCollins’ revenues, in India it is less than 1% in sales. [N7] This is the figure given by almost all trade publishers for ebooks sales.
According to Kapish Mehra, managing director of Rupa Publications, the company’s entire active backlist, of over 1500 titles, is digitized and available. [N8] Gautam Padmanabhan, CEO of Westland, says that the company’s entire frontlist is digitized and 80% of backlist is available as e-books. [N9]
While some publishers are adopting the approach of simultaneous release of both print and ebook editions, publishers like Rupa and its sister company Aleph, will release e-editions after 6 months of the release of printed books.
The new trend in the ebook space in India is e-singles of short-fiction. In July 2013, Penguin Books India announced the launch of its e-singles list of short, digital-only reads—“byte-sized stories which can be easily completed in the course of a daily commute or in a lunch-hour.” The list launched with 47 titles, available via Flipkart and Google Books, at Rs 25 ($0.42) per story.
On 21 September 2013, HarperCollins India launched its Harper21 ebook imprint, with 21 e-singles from 21 authors, priced at Rs 21 ($0.35) per story. The company says that the stories can be read in 21 minutes! A concept that has been tried by HarperCollins in other countries.
Recently launched Bloomsbury India has also indicated that it will be publishing e-book versions simultaneously with printed ones. Many medium and small publishers are also venturing into publishing e-books. For example, the Delhi-based Sterling Publishers, who publish general interest and children’s books, began to offer a wide collection of ebooks in epub format (digitized by QBend) through its website, and it had 177 ebooks listed on Apple iBookstore and Amazon Kindle store by May 2013. Roli Books, which publishes illustrated and coffee-table books and also literature, has launched about 40 titles as ebooks.
In children’s fiction and comics segment, ACK Media, had launched 350 ebooks, and apps and games last year. The famous Amar Chitra Katha comic list is available through Amazon Kindle store, Apple App store, Nokia Ovi store and Android market. The company’s digital division has also developed over 15 games based on characters from the ACK and Tinkle comics, in collaboration with a partner. The company is planning to roll out a complete digital infrastructure system in 2013, which will both create content as well as repurpose existing content for digital media, along with the ACK App store.
Scholastic India is in the process of converting its backlist into e-enabled books, compatible with the Kindle platform. At present, some of its fiction and general interest titles have been made available in EPUB format.
Diamond Comics, another popular comics books publisher in Hindi and English and other languages, has also digitized its formidable list and made it available for web, and for iPad and Android, in partnership with the Readwhere newsstand platform.
The multilingual children’s picture book publishers like Tulika Publishers and Pratham Books were among the first to experiment with book apps, with multilingual content in the case of Pratham, on the Apple App Store, in partnership with application platforms like Fliplog Reader and Mango Reader. Pratham makes its books available on open platforms as well as on the entire range of reader applications, including The Wink Store, Google Play, Rockstand, etc. Popular children’s picture-book publishers Karadi Tales who are known for audio books, flash videobooks, DVDs and CD-ROMs, recently launched some of their books on the App Store. At the New Delhi World Book Fair 2013, another children’s books publisher, Katha, announced the launch of its ebooks list, developed in partnership with Impelsys.
Publishers in Indian languages are also launching ebook catalogues, by digitizing their backlist. Among them the notable ones are from publishers like Rajkamal Prakashan[Rajkamal Prakashan] (in Hindi); Mehta Publishing House (250 titles in Marathi launched in last week of September 2013); and Sapna Book House.
DC Books, the popular Malayalam publishing house, was one of the first among Indian languages’ publishers to launch ebooks. Most of their titles are available as ebooks, which are selling just under 10% of their sales, according to its CEO, Ravi Deecee.
The Wink Store, which was launched in late 2010, was unique because it was able to sign up several trade publishers producing Indian-language books, giving the language segment its first entry-point into ebook publishing. While many of the publishers who signed up, started with PDFs, it was their first effort at testing the waters. The Store, which is an associate of DC Books, offers ebooks and emagazines. In 2010, it had launched and marketed the Wink eReader, an e-ink device, which has now been discontinued. But the ebooks and the apps are available for readers to read on other devices.
Another initiative, Bookganga, based in the US, with its technology centre in Pune, retails more than 75,000 ebooks in Marathi, Gujarati, Hindi and Sanskrit languages, which can be read through their own app.
For many reasons, including difficulties of font support on e-reading devices, and also the investments that they need to make, to adopt a digital workflow, the publishers in Indian languages are held back from launching their electronic publishing programmes.
The many digital service providers that have been servicing foreign publishers so far, are now aggressively seeking domestic business from Indian publishers. The boom in tablet market is also helping the start-up software ventures in India to court publishers for potential content partnerships. But the collaborations have been few.
Delivery platforms: Amazon, Flipkart, Kobo
There are interesting developments taking place in retail of trade ebooks. Ebook retail is taking off from the online retail of physical books, which is continuing to grow too, with almost 25–35% of printed books sales coming from online retail for many publishers.
Amazon’s homegrown competition in India, Flipkart, which started as an online retailer of books, and later introduced other categories of products, had forayed into retailing ebooks in September 2012 through its Flyte digital store (which started with selling music). Flyte was shut down in May 2013. By August 2013, Flipkart launched the Flipkart ebook app for Android, iOS and Windows platforms, as well as a web reader. The company has tied up with several Indian publishers, including publishers of Indian languages, beginning with Hindi, to sell their ebooks.
Flipkart has said that according to Nielsen BookScan Retail Panel data, Flipkart holds 80% market share for online book sales in India, and holds 40–45% market share for all trade book sales across brick and mortar and online. In August 2013, Flipkart inked a deal with self-publishing platform Smashwords, to distribute its titles in India.
Amazon’s Kindle, which has brand recognition in India, made it easier for Indian customers to buy books, with the launch of the Kindle India Store in August 2012, which enabled transactions in Indian Rupees (INR). Amazon had tied-up with Croma retail chain to sell its basic e-reader, the Kindle Wi-fi 6” E Ink Display device.
When Amazon launched Amazon.in, its marketplace platform in India, in August 2013, it integrated the Kindle India store under that domain. The Kindle range of e-reader devices was also made available through Amazon.in shortly afterwards.
The ebook space in India is about to get more exciting, with the coming of Kobo, which will soon launch here. In an interview to the author of this report, Malcolm Neill, Kobo’s Director Content Acquisition and Publisher Relations APAC, said that Kobo’s entry will drive competition. It has also identified a retail partner, and has been building relationships with publishers for over a year now.
Before Flipkart and Kindle India Store set up, ebooks were available from locally established online retailers, like Ahmedabad-based Infibeam and The Wink Store, which is based in Kottayam, Kerala. Infibeam’s ebook store with over 900,000 ebooks, complements the Pi e-ink reader. When it first launched, most ebooks available through Infibeam were those published by global STM publishers.
Google extended its ebook section on Google Play marketplace in India, in February 2013. With Android devices having greater penetration, Google Play is an important platform for content, where ebooks are priced in Indian rupees.
Offline retailers
Offline retailers are also making a foray into ebook retail segment. In September 2012, Landmark retail chain’s online store announced an ebooks section, and an Android-based e-reader app. Landmark’s catalogue seems to be made of foreign ebooks, aggregated from an international distribution service.
The other leading book retail chain, Crossword, is poised to launch its ebooks retail channel by October 2013 or so, according to Kinjal Shah, the company’s COO. [N10] Crossword’s plan to launch ebook retailing space has been on the anvil since September 2012.
Telecom companies join in
The telecom operator Aircel has launched Aircel BookMate, an ebook store for its subscribers, in mid-September 2013. The store will allow its subscribers to browse, download and read books, magazines, and comics on their smartphone, tablets and PCs, through a monthly subscription or one-time purchase. But one needs to have an Aircel number to register. The Aircel BookMate app for Android smartphone can be downloaded from the Google Play Store, while the iPad and iPhone app appears to be in development.
In early September 2013, Vodafone tied up with Rockstand, the ereading app, to provide Vodafone subscribers to buy digital content available on the app through their mobile bills or balance. Vodafone users are now able to purchase books and magazines at Rs 7 ($0.12) per day, cheaper than the current prices of ebook and emagazines offered on the app.
(Telecom operator _Bharti Airtel_’s mEducation initiative in the educational content space has been mentioned above.)
By all indications, most publishers of ebooks realize the value of releasing books across all platforms, and they are experimenting with creating their own reader apps. With the Android platform being the most popular operating system in India, the Android-based apps would be the first choice. Cloud computing is offering a solution to create reader applications for different operating systems, which allows readers to migrate between devices and platforms with greater ease, while being locked down to the distribution platform.
Ebook publishers are faced with the problems of book discovery, and many are investing in strengthening their marketing efforts online, especially through social media. Except in the case of Penguin and Sterling, the publishers do not give information about the availability of their e-editions on their own website as yet. Many publishers are yet to adopt an integrated workflow, from manuscript creation to output, and also in following global standards for metadata.
Publishers in India are exploring with all formats and platforms. While most started with releasing PDFs, awareness about other formats is growing now. Open formats like EPUB and MOBI are becoming popular. DRM is seen to be a solution for digital piracy, so publishers are becoming familiar with DRM.
Publishers are experimenting with pricing too. Ebooks are available from as less as Rs 40 ($0.66) going up to Rs 350 ($6), for trade books originating in India. Ebooks sourced from foreign publishers are priced higher. Since India has been a market for low-priced editions, especially in trade publishing, price was not thought to be a differentiator when it came to ebooks. But that is could change soon. There is a lot of experimentation going on with pricing norms.
Earlier this year, most ebook publishers began by pricing printed books and ebooks almost at par; or pricing the ebooks, just less than the print version. With more ebook platforms coming up, there seems to be a shift.
Penguin’s title Can Love Happen Twice by Ravinder Singh, from its popular MetroReads imprint, is priced at Rs 125 ($2.08) in print and sells at Rs 65 ($1.08) on the Kindle store and Flipkart. Similarly, the paperback of Immortals of Meluha by Amish Tripathi (Westland) is priced at Rs 225 ($3.75), but both, the Kindle and Flipkart editions, are priced at Rs 72 ($1.2). The nearly 50% difference in price in two editions, among the popular, commercial fiction titles are not seen in the literary fiction titles. For instance, HarperCollins’ India: A Traveller’s Literary Companion by Chandrahas Choudhury is priced at Rs 399 ($6.7; hardback) and it’s Kindle edition is priced at Rs 314 ($5.2), whereas the Flipkart edition is priced at Rs 359 ($6).
Similarly, in literary non-fiction too the difference is not 50%. Hachette India’s newly revised title, 24 Akbar Road by Rasheed Kidwai, an account of the Congress Party’s hold on the Centre, is priced at Rs 375 ($6.25) in paperback, and Rs 295.45 ($5) in Kindle edition.
Many Indian authors are taking advantage of self-publishing services, for example those offered by CinnamonTeal Print & Publishing Service and Pothi. Amazon’s Kindle Direct Programme became a greater attraction in August 2012, when the company allowed authors and publishers to set Indian rupee prices on the Kindle Store. For many of these new authors, ebook-first is a safe bet, requiring minimal investment. With Smashwords’ books now available on Flipkart in India, this platform is also likely to gain interest among authors looking to self-publish.
Well-known author Ashok Banker, best known for the bestselling Ramayana series (Penguin Books India), set up his own ebook store, AKB eBooks.Com in 2011. For Banker, the attraction towards ebook publishing was not about the cost of production, but instead, it was the ease and the low cost of distribution and purchase.
The success of self-published author Amish Tripathi, whose mythological fiction series, Shiva Trilogy, earned him a $ 90,000 advance from publishers Westland recently, has given hope to aspiring writers. Tripathi’s Immortals of Meluha, the first of the Trilogy, was first published by him in February 2010. The book was re-printed thrice within the following week, and by the end of July it had sold around 45,000 copies across India. After the book’s initial success, Westland picked up the series for publication. The Trilogy has sold more than 1.7 million copies in print within a two-and-half year period, with retail sales of over Rs 43 crore ($7.17 m). It has been hailed as “the fastest selling book series in the history of Indian publishing.”
Having foreseen an opportunity, Penguin Books India along with Author Solutions, launched a self-publishing imprint, Partridge India, in early 2013. Every Partridge India title is released in digital format as an e-book, and print format is offered as an option.
The fact that English enjoys a privileged status in India and is also the language of instruction for almost all higher education courses in the country, chiefly for STM subjects and professional courses. Publishers of Indian-language content have a few hurdles to surmount before e-publishing in these languages can catch up with the pace of change taking place in English publishing. The most important obstacle is that computing with Indic scripts has been a struggle due to the presence of multiple standards in text encoding and keyboard layouts, as well as because of poor Indic-script support on reading devices. Often fonts need to be bundled with the content files. Readers require plug-ins to be able to read such files on their devices. Although agencies of the government, not-for-profit organisations, and also technologists’ groups and industry bodies are making efforts, especially for adoption of UNICODE standards, there is still a distance to cover in this regard.
(Some of the publishers in Indian languages who have launched their ebook lists, and the platforms which support them are mentioned in the trade e-books section above.)
A Tamil e-reader application, NHM Reader, was recently launched by the Chennai-based publishing company, New Horizon Media. The cloud-based ereader application, inspired by the Kindle app and its features, is currently available for iOS. The app will allow readers to adjust font sizes and background colours. New Horizon Media is developing the NHM Reader for Android devices too. The company, which has been involved in developing a series of Indian-language software applications, also runs an online retail store.
Notes 1. Indian Youth: Demographics and Readership – Results from the National Youth Readership Survey 2009, National Book Trust, India in association with National Council of Applied Economic Research, New Delhi: 2010. See the table of contents and an executive summary here.
eBooks and the digital distribution of written content have the potential of becoming a game changer in the Arab world, by opening access to knowledge, learning, and also pleasure reading in a region that traditionally was known for high rates of illiteracy and ailing distribution channels for books. Digital distribution can perhaps overcome some of these hurdles and bring books within reach of a young population that is quickly moving online with the help of hugely popular electronic devices. With 64 percent of adults owning a smartphone in the United Arab Emirates, digital access is, in principal, within reach of many today. [2]
At a first glance, the status quo is complex, if not bleak. Despite a population of 280 million native Arab speakers spread between Morocco and the Gulf, an Arab book market hardly exists. Information on new title releases is hard to come by. Trading books across borders is limited and often cumbersome. Surveys on reading behavior portray a region where reading books (if they are not about religion) is a pastime for only a small fraction of even the educated strata of the population. Political as well as economic uncertainty add heavily to this poor accounting. And yet, at least in some areas, notably in the Gulf but also in Saudi Arabia, the situation improves dramatically. For instance, in the United Arab Emirates, illiteracy has fallen from 75 percent only four decades ago to 7.5 percent today (Jen Thomas: “UAE cruises from illiterate to well-read in 40 years.” The National, August 27, 2012).
Some 500,000 printed book titles are available in Arabic, with about 15,000 new titles and 10,000 re-editions per year, according to estimates. [3] These are modest numbers compared to the 90,000 new titles and re-editions in Germany alone, with a population of about 82 million. The foundations of the Arab book market are ever more strained, as small- and medium-sized publishing houses prevail, with strictly limited access to capital, as well as a high cost for a largely unreliable distribution system in most Arab countries, and a very serious impact from piracy on sales in most markets. Any successful new book is pirated, on paper or digitally, within days of its release. Among the well educated, Arabic books are furthermore in direct competition with content in the English language—books, but also all other media and formats—so that reading and learning in English (or in French for the Maghreb) has become a central feature.
In 1999, Neel WaFurat was established as the first platform for purchasing Arabic books online. Based in Lebanon, it serves the domestic market as well as customers in neighboring countries, plus Egypt, the Gulf, and Saudi Arabia (which, with a population of 28 million, is the largest single Arab market). Recently, Neel WaFurat added a dedicated site for digital books, iKitab, distributing some 3,000 Arabic-language titles as ebooks in EPUB format; Neel WaFurat also added a site for digital magazines, iMaghaleh, hosting about 100 magazines from all over the Arab world. These platforms are available for Apple’s iPad as well as for the Android platform. An iKitab Cloud service was launched in beta version in the first half of 2012.
Other online stores for books in Arabic include Mizado, one of the leading web stores in the Middle East, covering a wide range of products, including electronics, furniture, and home appliances, as well as books, for delivery to the customer’s home. The catalog of Arabic books is limited to about 250 titles. Aido is an online store, founded in 2008, specializing in various media and gifts, with a limited offering in books, most of which are in English. DoBazar is a recently launched online store with a Bangladeshi background, specializing in gifts, but aiming to add books, including titles in Hindi, to their product list.
The move from using the Internet for the distribution of physical goods to distributing digital material on mobile devices is confronting a number of challenges that are specific to the Arab context.
First of all, digitizing Arabic writing is a challenge, as representing Arabic typography properly on reading devices comes with substantial technical difficulties—a problem of both practical and symbolic impact in a cultural context that esteems calligraphy as being a particularly important aspect in books. As a result, Arabic is currently not supported for ebooks on several of the internationally leading platforms, like the Apple iBookstore.
This makes it not only difficult to produce and distribute Arabic ebooks—It tends to discriminate books against all other media and content that are available to consumers on their mobile devices instantly, over popular services such as the iTunes store.
The most ambitious initiative aiming at digital content is probably Rufoof. Founded in 2010, Rufoof is a Dubai-based ebook portal offering publishers a complete line of services from digital conversion to distribution. It currently serves as a distributor for 20 publishers and has service agreements with another 30, with 5,000 titles, mostly in Arabic, currently in its inventory. In a strategic move, Rufoof is preparing to build an overarching directory for the Arab book industry, aiming at including title-based information as well as information on publishers and the availability of any listed title at as many bookstores and on as many sales platforms as possible. Rufoof focuses primarily on mobile devices, and its application is available from Apple’s App Store (for which Rufoof could gain the status of an “approved supplier”). Additional apps for Android and Windows are forthcoming. According to its business model, Rufoof does not charge for digital conversion services, but splits revenues with publishers 50/50, after suggesting a retail price for ebooks at a discount of 30 to 50 percent off a print title’s cover price. In upcoming developments, Rufoof aims to branch out into educational publishing as well, taking advantage of recent public announcements with regard to the UAE government’s promotion and support of elearning (see, for instance, Sheik Mohammed’s e-learning initiative of April 2012, details at www.sheikmohammed.ae, direct link here).
Qordoba, a Canadian and Lebanese company with its legal headquarters in Dubai, was launched in 2011 as an initiative specializing in digitally publishing Arab writers. By spring 2012, Qordoba had acquired the rights to 400 Arabic titles, of which 250 were ready to be released as ebooks. In addition, Qordoba aims at translating relevant titles as ebooks into Arabic, mostly from English. The first English title released in Arabic was Machiavelli’s The Prince. Ultimately, Qordoba wants to cover all subjects, from literature to sciences, politics, and religion, and distribute them on its own platform. Titles will be made available in EPUB, across all major platforms, including Apple, Android, Windows, websites, and Samsung’s SmartTV. Forty percent of sales revenues go to the publishers, with retail prices being suggested at a discount of 30 percent off the print price. eBooks carry DRM protection and can be read only through the Qordoba App. For payments, a system of prepaid vouchers is available.
[1] The survey was based on a sample of 1,008 interviews, conducted in the 12 largest cities of Russia: Moscow, St. Petersburg, Volgograd, Yekaterinburg, Kazan, N. Novgorod, Novosibirsk, Omsk, Rostovon-Don, Samara, Ufa, and Chelyabinsk (representing together about 19 percent of the Russian population). Only people ages 18 and higher who read books were interviewed. Nonreaders were not interviewed. “Readers” are considered to constitute about 55 percent of the Russian population over 18 years old.
[2] See the survey carried out by the telecom equipment vendor Ericsson, polling 47,500 Internet users aged 16 to 60 years in 58 countries and regions in the first quarter of 2012, reported by various services, and the Wireless Federation on June 20, 2012.
[3] Data in this chapter are, if not indicated otherwise, taken from the study “Publishing in the United Arab Emirates,” by Rüdiger Wischenbart and Nasser Jarrous, released in September 2012.