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Friday, July 20, 2012

Publishers, other firms pin hopes on e-books


By MIE SAKAMOTO
Kyodo

After two years of slow growth since "the first year of electronic books" dawned in Japan in 2010, publishers and other companies looking to tap the sector are anticipating a major market expansion this year with the launch of new e-book devices and a wider range of content.

News photo
The medium is the message: Visitors try out electronic book readers at the e-Book Expo Tokyo at Tokyo Big Sight on July 4. KYODO

Fueling their expectations is the planned release in Japan by Amazon.com of its Kindle e-book reader, a move expected to stir competition.

As the U.S.-based online retailer has been negotiating with publishers here — including big hitters — ahead of the still-announced launch date, some players expect that Kindle's arrival will lead to the sale of a wide range of content at prices lower than for printed books.

Rakuten, the nation's biggest online shopping mall operator, got the jump Thursday, launching an e-book service using Canadian e-book marketer Kobo Inc., which it acquired in January.

"We'd like to be successful globally as a Japanese company," Rakuten Chief Executive Officer Hiroshi Mikitani said at an e-book exhibition last week in Tokyo. "Japan has wonderful content that we'd like to export."

Mikitani said his company wants to invest further in developing new e-book readers to go up against U.S. and European competitors.

Sony Corp., which started selling its Reader device in December 2010, welcomes the entrance of foreign rivals to the Japanese market.

"I'm taking the move very positively," said Fujio Noguchi, senior general manager of Sony's digital reading business division. "Any market grows through competition. . . . It will lead to the expansion of the digital book market," he said.

According to Yano Research Institute Inc., sales of e-book content in Japan is projected to have increased 7.9 percent in the business year that ended last March from the previous year to ¥72.3 billion. But the growth was not as rapid as expected, it said.

Masashi Ueno, an executive researcher at the institute, pointed out two major reasons for the smaller than expected growth — lack of content and Japan's resale price maintenance system, which is designed to sell print books and magazines at fixed prices set by publishers.

The system does not cover digital books.

"Many popular works and new books have not appeared in the digital content market," Ueno said.

In addition, many publishers are not willing to sell their digital book content at lower prices than paper books, fearing that would lead to a drop in sales of regular books, he said.

But publishers are also facing the need to attract new customers amid the rapidly shrinking book market. According to the Research Institute for Publications, the size of the publishing market — sales of printed books and magazines — came to about ¥1.80 trillion in 2011, down substantially from ¥2.15 trillion in 2006.

To overcome the situation, Japan's publishing companies, including Kodansha Ltd. and Shogakukan Inc., have started joining hands to offer e-books to a broad range of readers through bookstores and libraries.

In April they formed a new company with investment from a government-backed fund, the Innovation Network Corp. of Japan.

Designed to help publishers digitize their content, the company, Digital Publishing Initiatives Japan Co., aims to increase the number of such publications to 1 million from the 30,000 to 50,000 available as of the end of March and expand Japan's e-book market to ¥200 billion in five years.

"The government, for its part, is helping the market to expand," said Kodansha President Yoshinobu Noma at the e-book expo. "We are working on digitization assiduously because we think the government might give up on us if this doesn't work."

The publisher is working to digitize new books concurrently with their launch in paper form, Noma said.

Though the release of books in both print and digital formats is often described as a zero-sum game — meaning when one gains the other loses — the digital versions are currently adding to overall sales instead of eating into those of printed books, Noma said.

"I believe paper books and digital books can be compatible," he said.



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