Digital Publishing in China: Lay of the Land
The following is meant to be a high-level overview of the companies and government bodies involved in digital publishing in China. Though it's a bit of a jawbreaker, we hope it will be useful as an orientation guide.
Content providers for online retailers include publishing houses and literary websites, though retailers place more emphasis on traditional publishers. Dangdang's e-book prices are roughly 20%-40% of those of paper books—usually 7 or 8 yuan (around $1.15)—while 360Buy is generally under 5 yuan (90¢). Formats are generally supported by all readers, though there have been rumors of difficulty viewing Dangdang's formats on a Kindle. Online retailers work closely with publishing houses, and have a major advantage over other platforms in this regard.
Dangdang (当当), China's largest online book retailer. Dangdang's e-book store went online December 21, 2011—the first e-book retailer to become active. It offers approximately 50,000 books from 200 publishers. This February, Li Guoqing, CEO of Dangdang, said in an interview with Southern Metropolis Daily that in April Dangdang would introduce its own e-ink reader, priced starting at 299 yuan ($47), up to 699 ($110) for a 3G-capable, touch-screen reader.
On February 20, as 360Buy was putting its e-book bookstore online, Dangdang announced that it already had 150,000 e-books available for purchase.
At the end of February, Beijing Business Today reported that Dangdang was merging its e-book and paper book purchasing departments, and imposing a "bundling" policy on publishing houses that would require publishers to allow Dangdang to sell e-books and paper books sold concurrently.
Amazon China (亚马逊), China's second-largest online book-seller, has struggled to achieve the dominance it enjoys in the rest of the world.
In August 2010 it was rumored that Joyo (卓越, the online retailer bought by Amazon) was hoping to bring the Kindle 3 to China, under the name "Golden Read" (金读, jindu). This rumor was rubuffed by Amazon headquarters, which said that the timetable for a China rollout of the Kindle was not yet set (likely because Amazon.cn's online e-book store was not yet ready).
In October 2011, Joyo Amazon officially changed its name to Amazon China and began using the Amazon.cn domain name. At the same time it began "discussions" with the Chinese government and rights agencies, in preparation for launching the Kindle in China.
Amazon China's website operatives began gathering book data from Chinese publishers during the second half of 2011; both the Kindle reader and a Kindle store are expected to be launched in China by April of this year.
360Buy (京东商城), China's largest online electronics store, rolled out its digital bookstore on February 20, with 8,000 e-books for sale. 360Buy cannot compare with Dangdang or Amazon.cn in terms of quantity, nor are they preparing to launch an e-reader, but they are the third largest online book retailer in China (think an online Walmarts).
9Yue is an e-book retailer established by the official Xinhua bookstore chain, the largest brick-and-mortar bookstore chain in China. The exact geneology of 9Yue is head-spinning, but it's run most directly by a company called Xinhua Wenxuan (新华文轩), which in turn is owned by the Sichuan provincial branch of Xinhua Bookstores. Xinhua Wenxuan was one of the earliest entrants into the online bookstore market, selling paper books online starting in 2007, and launched its e-book platform in July 2010.
Since the advent of 3G networks in China, the three major Chinese telecommunications giants have all launched their own digital reading platforms. These companies do work with publishing houses, but their major partners are literary websites, which provide content directly to 3G users. Payments generally come in the form of monthly subscriptions, for example an all-you-can-read package might cost 5 yuan (90¢) a month, with some books excluded. The vast majority of Chinese consumers of e-books are still doing that consumption on a cell phone. According to combined statistics from the three major telecom companies, 30% of cellphone users are reading e-books on their phones.
China Mobile (中国移动) was the first telecom company to launch its digital book platform—in October of 2009. In that year, China Mobile began working with three major technology companies—Hanvon (汉王), Datang (大唐), and Huawei (华为)—to produce e-ink readers that support 3G.
China Telecom (中国电信) launched its mobile reading platform, Tianyi, in September 2010. The "Tianyi" name is quite overloaded in the online world: http://www.tianyibook.com and http://www.189ty.com/ are examples of sites that borrow that name (and China Telecom's "189" domain) to ride on China Telecom's coattails, providing some original content and quantities of illegal downloads.
China Unicom (中国联通) launched its platform Wo iRead (沃阅读) in April 2011. In December of 2011 it opened the "Wo+ platform", similar to Apple's app store.
Founder Apabi and Fanshu.com. Apabi was created in 2001 by Founder Technology (方正科技) as a technical platform provided digital publishing support to publishing houses, newspapers, universities and libraries. Its e-book store went online in 2006. At present, Apabi is China's best-established provider of digital publishing technology. In 2009, Apabi and Penguin reached an agreement whereby Apabi would make Penguin's English-language e-books available to Chinese readers.
In 2009, Founder Apabi teamed up with the search portal Zhongsou to create the e-book platform Fanshu.com, aimed at being "the world's biggest book portal", a sort of combination of Amazon and Google. By leveraging Apabi's connections with content providers (primarily publishing houses), Fanshu.com soon boasted one of China's largest collections of e-books. Fanshu.com's e-reading software and e-reader (the Yambook) are also produced by Founder.
Following the launch of Fanshu.com, the Apabi e-store continues to exist. The exact relationship between the two is unclear, and some publishers have been surprised to find that content they've licensed to Apabi has directly appeared on Fanshu.com.
In October of 2011, Baidu purchased a 40% share in Founder Technology, in the process becoming a part owner of Fanshu.com. At the same time, the Baidu Library (the subject of recent rights infringement allegations and lawsuits) began to promote e-books from the Fanshu.com platform.
The Hanvon Book Store went online in 2009, and is also present in Hong Kong and Taiwan. Hanvon Technology is China's largest manufacturer of hand-held reading devices, and nearly all e-book platforms support access by Hanvon devices (though it's worth noting that Hanvon posted a net loss of 434 million yuan in 2011). The Hanvon Book Store itself has no particular advantage in terms of digital content, but they do have around 6,000 e-books for free download to their readers.
Literary websites first appeared in China at the end of the 90s, when e-reading was done solely on PCs. In the following decades, many of China's best-selling books and authors had their start on online sites before moving into traditional publishing. The genre fiction that currently makes up the vast majority of best-selling literature in China (romance, martial arts, urban fiction, fantasy, etc) all grew out of literary websites. The trend of reading on cellphones and digital devices also began with these online literary sites.
The vast majority of China's literary websites—most notably Qidian (起点中文网), Under the Banyan Tree (榕树下), Hongxiu (红袖添香), and Xiaoxiang (潇湘书院)—have been purchased by the Cloudary corporation (盛大, formerly Shanda). Though most individual literature sites owned by Cloudary provide some means of purchasing e-books (generally through cell phones), its main e-book sales platform is Cloud Bookstore (云中书城), which went online in February of 2011.
Cloud Bookstore rolled out an unusual feature in May of 2011, borrowing from the E-Bay/Taobao model of "shops within a shop". Publishing houses were allowed to run their own section on the website, giving them greater control over presentation and organization.
Cloud Bookstore is connected directly to Cloudary's own proprietary e-reader—the Bambook—developed in conjunction with Shanghai Nutshell (上海果壳), a technology company owned by Cloudary. E-books purchased from the Cloud Bookstore can, of course, be read on most other clients and devices.
Search Portals: Baidu
Baidu, China's leading search portal, began its Baidu Library, a document-sharing website, in 2009. The next year this expanded into the "Wenku Bookstore", providing e-book sales and downloads. In March of 2011 50 Chinese writers formed an alliance to protest against copyright infringements in the store, following which Baidu removed large quantities of online material, and issued a public apology. In August of 2011 Baidu bought shares in Fanshu.com, and began providing sales links to Fanshu books on the homepage of the Baidu Library.
In September of 2011 Baidu rolled out Baidu Reading, an "open platform" that builds on the content and technology of Baidu Library and Fanshu.com, adding in cooperation with literary websites and traditional publishers to create a platform where copyright holders can upload and sell their material directly.
Baidu's reading app is among the most widely accepted and used software of its kind.
Other enterprises entering the digital publishing industry in interesting ways include:
Douban is China's largest social networking site centered around entertainment-industry products: books, film, and music. Douban's users form China's largest online community of culture consumers.
In November 2011 Douban's e-book store went online. Douban works directly with authors or other copyright holders, and provides layout and formatting services, as well as direct payment of royalties. At present, however, only free content is available on their store—they have yet to put the payment system into operation.
Douban's content works with its own "web" e-reader and Apple products, and they are currently working to provide support for Amazon's Kindle. Also in the works is a platform supporting smart phones.
Beijing Xiron, a privately-owned publishing company, established its "Xiron Chinese Web" in 2010, but it wasn't actually put into use until the end of 2011. The site is purely an "original content platform", using payments, prizes and Xiron's advantages in traditional publishing to encourage users to post original content. The site also includes aspects of social networking to allow writers and readers to interact more closely. At present the site only supports reading content online, but this year they will begin supporting e-readers and other similar clients.
A very small but interesting outfit is Tangcha, which produces creative, well-crafted digital publications for the Apple platform (more support is planned). Read more on Tangcha here. In an industry characterized by high-volume production of low-quality content, Tangcha stands out.
Duokan is a sharing/social media site that began in 2009, providing users with Chinese-language e-reader applications that work with Kindle, Android, iOS and AppleTV. At the end of 2011 Duokan began producing their own digital publications in the form of apps. Like Tangcha, Duokan places emphasis on the reader experience, creating carefully designed and laid-out digital products.
The vast majority of digital reading is still done on cell phones and PCs in China, e-readers based on e-ink technology began to appear around 2008. While there are nearly a dozen such vendors on the market now, there are a few main contenders with strong linkages to online stores.
Hanvon (汉王) became the first technology company to produce e-readers in 2008, and they are still the largest e-reader maker in China. Their product line includes nearly 40 e-reader models, including 3G capabilities, wifi capabilities, and color touch screens all in 2010. The Hanvon readers can connect directly with Hanvon's proprietary e-book store, and most models can connect with other e-book providers (such as Dangdang) after the installation of certain apps. The readers also accept common formats such as TXT, PDF, HTML and EPUB.
The Bambook is Cloudary's official e-reader, produced by the Cloudary-owned technology company Shanghai Nutshell (上 海果壳). The Bambook's primary advantage is that it offers automatic linkages to the greatest number of online bookstores, including Cloudary's own Cloud Bookstore, Feedbooks, the Gutenberg Project and 9Yue. The Bambook comes in three models, including a recently-introduced color model. Most models are generally in the 500-700 yuan ($80–$111) range.
Wefound & Yambook are two readers produced by Founder Technology. The first was introduced in 2009, and looks so much like a Kindle 2 that online commentators derided it as a knockoff. The Yambook is produced specifically in conjunction with the Fanshu.com e-store (see below).
Founder works with publishers (the China Publishing Group in particular) and retailers of paper books (for instance the Shanghai Book City), to manufacture proprietary e-readers for their content.
As noted above, Dangdang is expected to introduce a home-made e-reader in the second half of 2012, and a Chinese version of Amazon's Kindle should be appearing "soon".
Regulations and Official Involvement
China has yet to officially announce a set of laws and regulations governing digital publishing, but a general outline of official intent can be divined from recent events:
In May 2010, the General Administration of Press and Publication (GAPP, China's highest publishing-industry authority) convened a "Seminar on E-Book Industry Research".
In July 2010, GAPP established a "E-Book (Content) Standardization Working Group", planning to produce the first draft of e-book content standards by November of that year.
In October 2010, GAPP published "20 Recommendations on Developing the E-Book Industry". The gist of these recommendations is that the industry be centralized, backed by funding bodies, and regulated by the government. In particular GAPP recommended the establishment of "National Digital Publishing Bases", much like the bases that have played a role in the development of China's other high-tech industries. Publishing corporations, provincial-level publishing groups, the telecom companies, and even local governments have responded by investing heavily in such bases, all of which are authorized by GAPP. The first national-level base is the Shanghai Zhangjiang National Digital Publishing Base, established in 2008 with 285 million yuan ($45 million) in investment from the Zhangjiang Group and Founder Technology. 23 digital publishing enterprises have already set up shop on the base.
In November 2010, GAPP awarded "E-Book Industry Business Certificates" to 21 enterprises, including Hanvon and Cloudary, though it's unclear exactly what role these certificates will play.
In January 2011, GAPP announced that it had finalized its "First Draft on Content Standardization", though as of now that draft has not yet been publicized.
Given the uncertainty of future government regulations, industry players are working according to the principle of "first get on the bus, then buy a ticket"—ie start doing business as soon as possible, and later adjust for government regulations, if and as they emerge.
Digital copyright management in China is still in its infancy. Piracy is still common, especially of new best-sellers—readers are still accustomed to being about to download books for free. The two biggest offenders in this category are Baidu Library and Sina's "ishare" platform—while Baidu is working to clean up its practices, Sina seems more or less unrepentant.
Furthermore, contracts between writers and publishing houses often fail to stipulate terms for digital rights, and publishers often make use of those rights without permission from the author, selling e-book versions of works on multiple platforms.
In September 2011, the Writers Publishing House paid digital royalties (earned from sales on China Mobile's platform) to 80 of its authors. This was a momentous event at the time—reportedly the first time that a Chinese publishing house had paid digital royalties in any sort of organized fashion. In general, royalties from digital sales are split 70/30 or 60/40, with the digital platforms taking the minority.