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Saturday, April 3, 2010
ARRIVAL OF E-READERS
Publishers don't see iPad revolution anytime soon
By ALEX MARTIN and KAZUAKI NAGATA
Many in the U.S. publishing industry feel Apple's release of the iPad, a multipurpose tablet computer with a built-in electronic reading device, will revolutionize the way consumers read and push the market into the digital age — just as the firm's iPod and iTunes did with music.
But is the same revolution about to hit Japan, a tech-savvy country with millions of digital-gadget lovers?
Japan still seems relatively untouched by the e-reader hype reshaping the U.S. publishing landscape, despite the iPad's American debut Saturday.
Given the past failures of digital e-readers in Japan, the unique technological formats of e-books and the enormously complex and conservative publishing industry, it may take a long time for the domestic e-book market to blossom, industry sources said.
"Japan sticks out as a dead zone in the new global craze of Kindles, Nooks and the menagerie of other e-Ink readers pouring out of China and Taiwan," said Steve Nagata, a Tokyo-based technology consultant.
Mikio Amaya, CEO of Papyless Co., a leading Tokyo-based e-book provider that sells over 148,000 titles, of which roughly half consist of comics, said several factors were behind the e-reader's failure so far to win over domestic consumers.
"You have to understand that the publishing industry here vastly differs from that of the United States," he said.
"In the U.S., five or six major publishers dominate a majority share of published books — excluding books with a specialized focus — making it that much simpler when it comes to providing electronic content," Amaya said, adding that in comparison there were over 2,000 publishers in Japan, including around 50 major ones.
"Our company deals with about 500 of these publishers. But since we have to negotiate with each individual publisher regarding copyrights and other terms of agreement, it requires much time and effort," he said.
Such hassle, combined with the difficulty in digitizing Japanese documents and resistance from subscription agents determined to preserve their oligopoly, has hampered the spread of electronic books in Japan.
In fact, e-readers are nothing new here. But while relying on cell phones as the primary medium for mobile reading, the e-reading media have so far failed to create a new market of intellectual reading, with nearly 80 percent of the market dominated by electronic comics viewed on cell phones.
Sony Corp. began selling an e-reader in 2004, but halted production in 2007 due to poor sales, in part from lack of content and a high price-tag. The company has yet to revisit the concept despite the marginal success its latest device, the Sony Reader, is enjoying in the United States and Europe.
"The virtual stranglehold that publishers have over distribution and the conservative nature of the industry make it extremely challenging for any company to engineer change or progress — for a foreign company to do this is even more difficult to achieve," said Nagata.
Meanwhile, Japanese publishers may fear losing the market initiative to dominate e-book distribution, yielding to Amazon or Apple, worried the two giants could gain control of the profitable parts of the industry.
On March 24, the Electronic Book Publishers Association of Japan was officially launched, with 31 major publishers.
During a press conference, Yoshinobu Noma, chief of the association's executive board and senior vice president of major publisher Kodansha, said the association was established to "secure the profits and rights of authors, contribute to the convenience of readers and to promote the coexistence of print and digital media."
"We'd like to create a system where we can supply content to accommodate the various demands of our readers," Noma said.
The association's main task will involve creating a viable business model for the domestic e-book market by clarifying copyright issues and unifying the various formats, he said.
Many experts, however, are concerned Japan may lag in developing the e-publishing industry if it remains overreliant on its own reading format.
"Japan should not become another Galapagos Islands," said Liberal Democratic Party lawmaker Hiroshige Seko, who has been studying e-book policies.
Seko referred to Japan's cell phone market, which has often been likened to the Galapagos because it took a communication network different from the global standard and most of its phones have higher specifications and many functions unusual to other countries.
That kind of concern is apparently shared by the government, which March 17 held the first state-private sector meeting aimed at creating a common standard regarding distribution and copyright of electronic books.
The participants plan to compile an interim report by June.
Traditional publishers fear the iPad and Kindle in part because they might enable writers to bypass them in delivering digital content to readers.
Indeed, by using online e-book stores, it is possible for authors to easily supply their works directly to readers.
But Toshinao Sasaki, an information technology journalist, said publishers and editors will still be seen as valuable partners.
"It is difficult to publish a book all by yourself," he said at a recent symposium on e-books held in Tokyo, adding that handling work like digitizing text, creating a book's cover design and promoting it are big tasks for an author to confront alone.
"I think there will be some authors who can do all these things by themselves, but they will be in the minority," said Sasaki.
Lower House member Seko said one thing publishers cannot forfeit is the right to determine the price of books to make a profitable business model.
As an example, he pointed to the conflict between Amazon and Macmillan Publishers.
After Macmillan claimed its books, priced at $9.99, were being sold too cheaply on Amazon's Kindle, Amazon temporarily halted sales of all the publisher's books for its e-reader.
The publishing industry aside, potential digital readers in Japan seem to be pinning high hopes on the future of e-reading.
In a poll on electronic books and the iPad taken in February by Tokyo-based mobile researcher ORIMO Inc., 43.6 percent of 667 respondents said they expected e-books to develop further in the future, while 18.9 percent said they did not.
And while cell phones and personal computers remained the primary tools for viewing e-books, 50.7 percent said they were "interested" in the iPad, while 32.5 replied they weren't.
Still, experts predict it will still take a long time for Japan's e-book market to boom, as publishers resist encroachment by the dominant e-book distributors Amazon and Apple.
Tsuruaki Yukawa, who runs Tech Wave, which posts IT and media related blogs, said it would probably take at least two years or possibly longer to have an e-book market where consumers can find almost any book they want.
Yukawa related the story of how the music industry failed to adjust to technological change and lost the initiative of the distribution system to Apple and its popular online store iTunes.
Although many record labels switched to iTunes in a short time as the crisis-hit music industry faced collapse due to illegal copies, Yukawa expects publishers will probably only gradually go digital.
"I think publishers will resist the movement while they still have financial stability," Yukawa said.
"I think it will be a while before the dawn of e-book publishing in Japan," he said.