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Uptake in e-publishing creates both hardware and software demand

By: Debbie Howard

One of the hottest product categories this year is that of e-readers, including the explosion of resulting business in the form of the “e-books” and other published materials.

Looking at the electronic book market alone, the industry in Japan experienced annual increases of 30% and 10% in 2008 and 2009, with sales expected to reach 130 billion yen by 2014 (up 130% over 2009). A large portion of initial sales was for “e-books for cell phones,” with the popularity of comic books driving market expansion. However, all that is set to change with e-readers now reaching greater saturation, and content being marketed not only for e-readers, but also for new breeds of devices, including smart phones.


Although the boom has been gathering momentum since Amazon rolled out its original Kindle portable model less than 2 years ago, critical mass was apparently reached this year with the wildly successful introduction of Apple’s iPad tablet computer. Some even guess-timate that the iPad has cornered in excess of 20% of the e-book market worldwide.

As the old saying goes “where there’s smoke there’s fire,” and competition has heated up dramatically. A price war has broken out among lower-end e-readers, with Amazon having recently rolled out a new, cheaper “mass market” version of Kindle. Meanwhile, early e-reader pioneer Sony has slashed prices on its “Daily Edition” e-reader, and Toshiba and Sharp are both introducing new e-readers.

Just as telling is the strong “new” demand for content. This is especially true for Japan, where the publishing industry has been slow to implement strategies to address the encroachment of the digital world and their own slowly eroding business. Japanese sales of paper books and magazines fell 4.1 percent to a 21-year low in 2009, shrinking 27 percent since its 1996 peak, according to the Research Institute for Publications.

The good news is that in a very short period of time, we are seeing aggressive tie-ups that demonstrate new modes of cooperation from among the newer digital publishing world as well as the traditional publishing world. For example, Dai Nippon Printing will enter the e-book sales business by joining forces with bookstore chain subsidiaries to launch “Japan’s largest store for e-books” via a website as early as fall 2010. The electronic book store would boast a collection of about 100,000 books from a variety of publishers, and be viewable on the iPad as well as via mobile phones and personal computers.

Mid-sized printing firm Kosaido Company has already begun distributing e-books for the iPad and iPhones, via its Book Gate store, offering titles from 51 publishers including Magazine House Ltd., Asahi Shimbun Publications Inc. and PHP Institute Inc. Kosaido aims to court more publishers and offer 300 titles by fall 2010.

A consortium of four companies (Sony, Toppan Printing Co., KDDI and the Asahi Shimbun) have established a new company to distribute e-books, including manga and periodicals, and deliver them to the reading public from around the end of this year. And Google will reportedly debut its “e-bookstore” in Japan in early 2011.

There can be no doubt that the way consumers are interacting with written materials is about to take a quantum leap forward. Indeed, digital media offers a brave new world of communications opportunities, including rotatable images, embedded video and audio, and linking opportunities to name a few. Leveraging on these new digital communications channels as regards content and advertising should be a top priority of all companies, regardless of category.

Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.

Originally Published in Nikkei Weekly, 23rd August 2010

CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.

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