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Getting a read on e-readers, books

SALES of e-readers in China are expected to soar from 400,000 to 10 million in three years. But a quick read of the situation shows prospects may not be so rosy. Yao Minji reports.

Most of the Chinese e-reader giants like Shanghai-based Hanwang and Shanda made a big pitch at the Shanghai Book Fair, trying to get a slice of the infant market that they expect to boom.

Sales people from many e-reader manufacturers seemed to be everywhere, handing out promotional materials at the weeklong event that ended on Tuesday.

An industry alliance has been formed. A contract with school textbooks has been signed. An industrial business forum has been held.

In 2009, around 400,000 e-readers were sold; analysts expect more than 10 million devices to be sold domestically in three years, making China the world's largest e-book-consuming market.

Closer examination of the costs and issues like copyright and piracy, however, shows that they may be over-optimistic.

At the book fair, the portable e-readers to display e-books were not doing well at all. Many visitors tried them out and expressed interest but were held back by the relatively high price, mostly between 1,500 (US$221) and 3,500 yuan. (Amazon's Kindle costs around US$139.)

"Many visitors came by and inquired about the price, the functions and so on, but we only sold one in the first two days," said a saleswoman, declining to identify herself or her company, at the book fair.

It's about the same for other manufacturers since this business is new, she said.

Many Chinese people are unclear about e-readers, thinking they're some media carrier like MP3 player with a low technology threshold and free resource container. Whether e-readers will create new consumption needs is still hard to predict.

"So, I'll still need to pay for some of the content even after purchasing the device, which is already expensive. I don't see a reason to buy it then," remarks Hua Lingdi, a middle-aged woman after talking with a saleswoman.

Cost barrier

Like Hua, visitors are confused about what kind of new experience this fresh gadget will offer and are often disappointed when they hear about the need to pay for content.

Amazon's Kindle and Apple's iPad have dramatically boosted the e-book market in the West and inspired Chinese manufacturers. They are working hard on creating either a large content provider with its own e-reader like Amazon or an advanced hardware provider that works with publishers like Apple.

It is difficult either way, due to the much larger pricing gap between the hardware and the content in China, Chinese consumers' long-term expectation of free content, and lack of contemporary literature, among other reasons.

Amazon's Kindle, one of the most successful e-readers, recently reduced its price to as little as US$139, while purchase of each e-book costs around US$5-10, about US$5-15 cheaper than the paperback.

This means a reader can easily recover the cost of the device if they read more than 10 books, not to mention the technology that can provide paper-like electronic display, which saves paper and accommodates today's e-reading habits and need for portability.

Though the Chinese e-readers cost between 1,500 and 3,500 yuan, the content is much cheaper, around five yuan to complete a book (which may be sold per 1,000 words), if not free. Some books are available by buying memberships.

This means one needs to read 300-700 books to make the investment worthwhile.

In the West, profits are made from sale of content, not the devices, but in China profits are made by sale of devices.

Quite a few Chinese people can be seen reading books on electronic devices like PSP (Play Station Portable), MP4 players or mobile phones.

A survey shows that among Chinese between 18 and 70 years old, the average time they spend reading from their mobile phones is 4.47 minutes per day. And there are more readers with lower income and education reading on mobiles. Their number in rural areas is also higher than in cities.

Convenience is a major reason people read on mobile phones, another is the free or very cheap content.

Yet, it is rare to see people holding an e-reader.


"Piracy is the essential problem in this field, just as it is in the music industry in China," says Alex Tang, 32, an software developer and self-professed "technology freak."

True. Unlike Amazon, the Chinese e-reader manufacturers equip the devices with tool books like dictionaries, classic texts, or light reading, such as online literature and journals.

Most Chinese readers haven't developed the taste for serious reading on an electronic device, since it is not available.

Shanda is China's largest online literature provider, taking a market share of more than 90 percent.

The company recently merged its various online literature websites and is cooperating with some traditional publishers to create a new content-providing site for its 6-inch Bambook readers, launched early in the month.

Among the top 10 most-read e-books on the site, none is outside the range of light online literature - often fantasies, cheesy love episodes and "heroic" violence.

Among the top 100 recommended books, about one-third of them are tool books such as English textbooks, and one-fifth old books published more than five years ago.

The rest are the same trifling fare.

Non-online authors are still holding back from the infant industry.

"There is no clear law or regulations in terms of the copyright in this field yet. And there is no clear way for vendors to fight piracy. So, like many other authors, I will wait for a bit more to see how it goes," said young popular suspense novelist Cai Jun in an earlier interview, who has been contacted by many e-reader manufacturers.

(Ying Ning also contributed to this story.)


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