Digital reading technology has been widely embraced by the Chinese reading public: everywhere in China these days, one sees people reading books and news on mobile phones, e-readers, and other devices. Now, after a decade characterized by intense competition, the Chinese e-book market has entered a phase of fast-paced but orderly expansion.
A Chinese-language keyword search for e-books in Apple China’s App Store currently yields 1,224 results. In addition to various digital reading apps and software, there is a plethora of online Chinese bookstores, and a wide variety of e-readers and devices to cater to the varied needs and interests of Chinese readers. With the increasing popularity of mobile phones, dedicated e-readers have lost market share; most mobile phone users install at least one e-reading app on their phones, and some mobile carriers offer phones with such apps pre-installed.
According to the “2014 Eleventh Annual Nationwide Reading Survey” from the Chinese Academy of Press and Publication (CAPP), 57.8% of China’s adult population reads books, and 50.1% reads books digitally (this figure includes adults who read books in a variety of formats, on computers, tablets, mobile phones, and e-readers). Given the expansion of China’s mobile Internet sector, the spread of mobile phones and other devices, and the changing habits of the Chinese reading public, the Chinese e-book market appears poised for rapid growth in the coming years.
The latest data regarding the scale of the Chinese e-book market comes from the “Annual Report on China’s Digital Publishing Industry, 2013–2014,” released in July 2014 by CAPP. The report reveals that in 2013, total annual revenue for the Chinese digital publishing industry was 254 billion yuan; the top three sectors, ranked by revenue, were online advertising, mobile publishing, and online gaming. Revenue from e-books (including books originally published online) reached 3.8 billion yuan. The combined revenue for e-books, online periodicals, and digital newspapers was 6.2 billion yuan; this accounted for 2.4% of total digital publishing revenue in China, so there is clearly ample room for growth.
Although e-books account for a small portion of China’s digital publishing revenue, e-book sales have been rising faster than that of any other sector of the digital publishing industry: between 2006 and 2013, Chinese e-book sales posted an average annual increase of 78.2%.
Diversification and Competition in China’s E-Book Market
Rapid development and intensifying competition have transformed China’s e-book market: once small and diffuse, it now boasts a number of competing e-book brands that have managed to attract large readerships and capture the majority of mobile phone screens.
The tech company Zhangyue started out in the e-book business six years ago, but its app has become one of the most popular mobile e-reader apps in China. In a recent interview, Zhangyue CEO Zhang Lingyun revealed that, by the end of 2014, the total number of Zhangyue iReader app users had reached 480 million, and, at that time, 15 million people used the app each day. In early 2015, Zhangyue spent 100 million yuan on an advertising campaign featuring a famous Chinese television host as its spokesman; the ads, which aired on Chinese television, caused quite a stir within the industry—few Chinese publishing companies have embarked on ad campaigns at that scale.
China Telecom, one of China’s three major telecom providers, has also established a mobile reading platform, which has allowed China Telecom to rapidly expand its e-book operations by leveraging the strength of its existing customer base. In July 2014, Tianyi Culture Communication Co. Ltd., the China Telecom subsidiary that operates the mobile reading platform, completed its first round of equity financing, and it now boasts three brands: the Tianyibook e-reader, Oxygen Audiobooks, and Zqread.com, an online bookstore. According to the company, users of Tianyi’s product line rose from fewer than 10 million in 2011 to more than 230 million in March 2015. In addition, Tianyi’s Oxygen Audiobook platform now has more than 55 million registered users.
Dangdang, an online bookstore and retailing platform, offers a mobile reading app with exclusive access to copyrighted content. According to Dangdang’s management, the platform’s current user base exceeds 15 million, and the number of new subscribers is expanding by over 200% per year. The average Dangdang user spends over 50 minutes per day reading with the app. Media reports indicate that the company’s goal is to become the clear leader in China’s e-book market, both in terms of number of users and number of downloads.
The Jingdong Group (formerly 360Buy), a well-known player in China’s e-commerce market, has also been developing its e-book presence. The company is working on improving its app’s user experience and is steadily adding new users.
In addition to domestic e-book companies, there are also global online service platforms based in China, such as the CNP eReading, a digital resource business and service platform. CNP eReading provides integrated promotional and sales plans for publishers, as well as one-stop services purchasing, accessing, managing, and integration for institutional clients.
Amazon’s e-book business in China has also posted fairly good results. In December 2012, when Amazon’s flagship Kindle store went online in China, the company also launched a Chinese version of its free Kindle e-reader software for various devices and operating systems. In 2013 and 2014, Amazon released three generations of e-readers and a Fire tablet for the Chinese market. On Mar. 31, 2015, Amazon announced the release of a white Kindle e-reader for the Chinese market. Amazon China’s 2014 report on online shopping trends shows that, in terms of sales volume, Kindle e-books are one of Amazon China’s fastest expanding product categories.
Greater Clarity on Copyright Energizes China’s E-book Market
The Chinese e-book industry benefits greatly from competition among the players for securing the best e-book content. In the early days of China’s e-book market, copyright infringement and piracy were rife: a decade ago, piracy was a problem that impeded the development of China’s entire e-book industry. Today, copyright issues in the Chinese e-book market are gradually being clarified, and corporate and consumer copyright awareness has greatly improved.
In March 2013, China began implementing regulations in three areas of intellectual property rights law: patents, trademarks, and copyright. These measures raised the ceiling on fines and penalties for copyright infringement and created a greater deterrent to piracy. Thanks to increased government oversight and the active participation of intellectual property rights alliances, China’s e-book market has been able to strengthen copyright protection technology.
Increased awareness of copyright protection has significantly reduced the incidence of piracy and has also prompted Chinese e-book companies to purchase more copyrighted works through proper channels, in a bid to attract more customers by offering higher-quality content.
Zhangyue owns the digital rights to 350,000 copyrighted works, and it distributes more than one billion books per year through its iReader e-book platform. Zhangyue’s “2014 Report on the Reading Habits of Chinese Citizens” shows that 53% of Chinese people born in the 1990s are active readers, and that e-books are rekindling an interest in reading among the younger generation. The report also shows continued strong sales of books such as Big Data: A Revolution That Will Transform How We Live, Work, and Think, by Viktor Mayer-Schönberger and Kenneth Cukier, priced as high as 30 yuan. There is strong demand for e-books with film and television tie-ins, and most users have become accustomed to paying for legal, copyrighted versions of books.
A manager at Tianyi Culture says that the Tianyibook e-book platform currently offers more than 330,000 books, magazines, comics, and reference works, and that the Oxygen Audiobook platform offers more than 150,000 hours of copyrighted high-definition audio content. In 2014, Tianyi acquired rights to more than 50,000 new books. The same manager says that although users are becoming more accepting of and accustomed to reading copyrighted books, there is a long road ahead, and companies must remain patient.
Dangdang owns the rights to more than 200,000 e-books. In 2014, the company sold more than 66 million e-books via its platform, accounting for 20% of total Dangdang book sales. Purchasing and reading e-books on mobile phones has become common practice for Dangdang’s customers. At present, the company is buying the rights to more than 100,000 books per year. Of these, approximately 20% are online-only works, a share that continues to rise.
Jingdong has rights to about 150,000 titles for its e-book platform. In 2014, the company’s e-book sales exceeded 10 million units, and revenue was over 10 million yuan. Based on its first-quarter results, Jingdong appears poised in 2015 to beat its 2014 figures. Most of the e-book content downloaded by the company’s users is composed of digital versions of previously published books. In 2015, the number of digital works on Jingdong’s platform is estimated to grow by between five to eight million. Most of these titles will be digital versions of previously published books, along with a small portion of original online content, and most of Jingdong’s e-books will originate with publishers, while some will be obtained via rights management agencies and individuals.
More and more Chinese print publishers are requiring that contracts for print and digital rights be signed simultaneously, especially in the case of new books, and the number of digital rights contracts is increasing. As of March 2015, Amazon China’s Kindle store had more than 210,000 titles in Chinese and other languages on offer.
Backed by the strength of the China National Publications Import and Export Corp.’s extensive international book procurement network, the CNP eReading platform features nearly 1.7 million Chinese and international books, 8,000 digital periodicals, more than five million full-text articles, and more than one million open-access digital resources.
As copyright awareness among traditional publishers and authors improves, e-book acquisition costs have risen, and new issues and problems (such as the duration of e-book rights) have surfaced. Currently, all links in the Chinese e-book industry supply chain are collaborating to resolve copyright issues.
Regulating Development and Improving Standards
In the early days of the Chinese e-book industry, inadequate standards led to duplicated efforts and difficulties exchanging digital information, restricting the healthy development of the industry. But during the past two years, a series of efforts to establish digital-publishing standards in China has provided a strong base of support for the development of the country’s e-book business.
To speed up the work of creating e-book standards, the National Committee on Technical Standards for Press and Publication established the E-book Content Standards Working Group. The group created six project teams, each dealing with a specific topic, including e-book content format, metadata, copyright protection, quality monitoring, and service platforms. The aim was to come up with a list of 12 new proposed standards. In May 2011, the list was approved by the State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT), thus allowing standards development work to officially begin.
In 2011, the E-book Content Standards Working Group began drafting the 12 proposed standards, and by November 2013, four of these proposals—those regarding terminology, standard systems, metadata, and basic format requirements for e-books—were approved by SAPPRFT to be implemented. The remaining eight proposals have been submitted to SAPPRFT and are currently pending approval. When the project is complete, it will fill the gap in Chinese e-book publishing industry standards.
At present, with the convergence of traditional media and new media, many traditional Chinese publishers are actively expanding their digital book divisions. China’s e-book business is taking advantage of the rapid expansion of the mobile Internet market to meet rising consumer demand for high-quality reading material. Whether via e-books or traditional printed books, reading is still a ubiquitous pastime in China.
Zhu Yeyang is a media specialist at the Beijing International Book Fair.