Technology-led disruptive change is coming—at last?—to Singapore’s publishing industry
The first time I did it I felt guilty afterwards. I was in Kinokuniya, checking out a book on the science shelves, Complexity: a Guided Tour, by Melanie Mitchell. Complexity, a hefty hardback from Oxford University Press, seemed a bit expensive at S$ 50. I used my smartphone to search for an e-book edition, which I found on Kobo for US$ 12.79. Ten minutes later I was having a coffee while reading the book on my iPad, the hardback still safely on Kinokuniya’s bookshelves (and on the publisher’s balance sheet).
I did something even scarier a few weeks later, at least scary if you are a publisher. I looked at a copy of Michael Ondaatje’s The Cat’s Table, featured in a new books display at a Changi airport bookshop, and—thinking of my overcrowded bookshelves at home—I opened the Overdrive app on my smartphone to check if the title was available as an e-book loan from Singapore’s National Library. Despite the unfriendly user interface, I managed to locate the book and download a copy to my smartphone. No need to buy. And after two weeks, the Adobe DRM license on the book expires and the copies on my computer, phone and tablet become unusable. So there's not even any need to worry about returning the book: no more library fines.
These use-case scenarios spell potentially disastrous disruption to the venerable print publishing and bookselling industry (I think libraries will survive the drop in income from late fees). How venerable? The industry’s leading confab—the annual Frankfurt Bookfair—has been around nearly 500 years. Singapore’s bookshops are already under heavy pressure from rising rents, and the last 12 months have seen three of Singapore’s five largest bookshops closing. Book trade veterans know that when a shop like Borders or PageOne in Vivocity closes it means a contraction in the overall market—Kinokuniya and Popular will not see a big benefit from their rivals’ defeats. Given the many entertainment alternatives a click away, people will just be buying (and reading) fewer books.
To Singapore’s technopreneurs, e-books may seem like old news—the first Kindle was launched in the US nearly five years ago, and e-ink readers have been on sale in the local computer shops for even longer. The technorati know how to use online concierge services and VPNs to spoof US physical and IP addresses so as to order Amazon Kindles and purchase e-books from Apple. But this remains classic early adopter behavior: When I borrowed The Cat’s Table as an e-book from the National Library, that was one of only 50,000 e-book loans in their last financial year, still less than two percent of the Board's 33m loans of physical materials in the same period.
Why is it taking so long, you may ask?
First of all, the big US-based players have been slow to enter local markets, and while they could enter any day, they are just as likely to leave the white space free. This is not, in case you feel inclined to blame them, the fault of the publishers, who have assigned international rights to all their books. Just as there is still no iTunes store available in Singapore, the Kindle still doesn’t officially ship here. Apple’s iBookstore is in just 32 countries in Europe and North America, and there’s no sign that Singapore or Southeast Asia is high up on the list of the next group of countries it wishes to enter. Google has had a Google Books team in the region for a few years, but in a recent presentation to Singapore’s book publishers they refused to name a date for entry into the market. Of the major retail players in English books, only Canada’s Kobo—recently purchased by Japan’s Rakuten—accepts money from Singapore-domiciled readers. But they’ve made no attempt to market to Singaporean readers, or sell their devices here, even online.
A few brave companies have offered e-readers in the local market over the past few years, and the Sony and iRiver e-readers have been available for some time. But as we’ve learned, it’s the integration of a good device, market reach, and a complete shopping experience with full catalogue that really moves consumers to digital media, and so far, no one has offered a truly compelling combination to Singaporeans.
Just in the last couple of months however we have local players entering the market with more serious offerings, including large catalogs of English books. Perhaps disappointingly, it has been government linked companies (GLCs) that have led here, not local entrepreneurs. Singtel launched its Skoob e-books offering in late 2011, and StarHub and Mediacorp are said to be preparing market entry. Singtel’s offering, based on a white label service from the UK’s Mobcast, offers 60,000 titles, including many US and UK bestsellers, at attractive prices. Beyond the pricing strategy, they have not really put their considerable marketing muscle behind the offering. Singtel is not currently selling a 3G or Wifi-enabled e-book reader to go along with the Skoob e-bookshop (and it doesn't seem possible to side-load a Skoob .epub file onto your device). They must reckon they will get enough readers using smartphones.
In September last year the Media Development Authority pitched the idea of a “white label” e-book retailer as a cost effective way to support the local books industry but talks are said to be moving sideways. (Australia mooted a similar idea a year earlier, but so far government and industry have not been able to settle on a single platform.)
But the change has started, though the impact in terms of e-book revenue is likely still less than 1% of local market sales. And there’s no guarantee that we’ll see the sort of rapid take-up that has characterized the US market, where e-books make up roughly 20% of trade book revenues (and for some genres the percentage is much higher). This is especially the case if the local market offerings remain just a bit incomplete. But at the same time, it would be foolish to ignore the disruption that a shift to e-books could bring to the local book scene if Singaporeans go for the e-book mix of instant access, convenience and (usually) lower prices. The impact on already suffering bricks and mortar retail—and the entire ecosystem of publishing—could be dramatic.
Looking on the bright side, Singaporean authors (and publishers if they get serious about digital) may see a net positive benefit from all this change. E-books allow local authors to reach global markets more efficiently, making niche publishing more viable. Digital books have a lower cost of distribution. But there is no guarantee that it will shake out that way. It is also true that a local retail market that is, say, 30% digital, could suck a lot of money out of the local ecosystem, to the benefit of Amazon (and white label wholesalers) who have the formidable advantages of big data on book buying habits, larger scale and a many year head start. And if that happens, and we lose even more bookshops, what does that mean for our city and cultural life?
So is the picture gloomy for local technopreneurs looking to build a business on the e-book revolution? Are all of the available spaces taken up by GLCs or global players? I don’t think so. Here are a few areas of opportunity that I see (and I’m working on ideas in some of these spaces):
- The disruption is just beginning, even in the US. Publishers are attempting to deal with the changes while disturbing their business models as little as possible, seeing e-books as a particularly high-margin new format. But the value chain is shifting, and Amazon's emerging power unsettling them. New business and pricing models may turn the industry upside down. Singapore’s Pandamian has innovated a promising approach to supporting self-publishing with online community tools, for example. Singapore seems like a good market to experiment with rental models, or even (shudder!) advertising supported e-books, models which could find global application.
- There’s huge potential in the region, as ecommerce gears up. China’s thriving e-publishing scene has developed in very different directions from the English book world (crowd-sourced freemium models with content delivered in small chunks to featurephones). Just imagine how a good e-books ecosystem could benefit Indonesia, where the cost of moving physical books across a vast archipelago has held the industry back for years.
- The current architecture of e-book distribution and retail is far from perfect. Book DRM is clumsy, and designing e-books for the current players is a bit like making webpages back in the days of the browser wars: standards are honoured in the breach. There will be opportunities, especially using html5, to create better ways of packaging e-books, of moving away from currently clumsy DRM to giving readers more of a sense of ownership of e-books and involvement with authors.
- No one has cracked the discovery problem. In a world without bookshops, or at any rate with fewer and smaller bookshops, how will people discover the books they didn’t know they wanted to read? (Remember the two disruptive examples that opened this article began with bookshop discovery!) Neither Amazon’s recommendations system nor Kobo’s vaunted Facebook integration seems to come close to solving this crucial need. Maybe a new kind of bookshop is needed, one that allows for book browsing within a stylish setting, and gives the retailer a slice of e-book revenues. After all, it is Singapore's smaller shops, like Books Actually, with their great design and active event programmes, that have bucked the prevailing downward trend in bookshops over the last few years.
- When 30% of long form book reading is in digital form and 80% of book discovery comes through the web, publishers will need to have digital and the Internet skills at the core of their processes. Singapore’s web publishers and developers can bring their experience to bear in shaping this new market.
So technology brings the usual mix of threats and opportunities to the world of books. As I learned reading my digital copy of Complexity: a Guided Tour, dynamic systems with multiple feedback loops can react in strange ways, with what looks like stability making sudden shifts to a new and unpredictable states of equilibrium.
Only one thing can I predict with anything like certainty—that the Frankfurt Bookfair will still be around for a long time to come.
Peter Schoppert left a thriving book publishing business in 1996 to be (by some counts) number 13 of the “Dirty Dozen” founders of Sembawang Media (then the parent company of Pacific Internet). In 1999 he co-founded Asiacontent.com, which brought brands like CNET to Asia. After riding the cycle through Asiacontent’s NASDAQ IPO and dotcom crash, then turning around NUS’ academic publishing efforts and later working for McKinsey & Company, Peter is now consulting regional media companies and preparing to launch a new digital-first publishing start-up. He has been to the Frankfurt Bookfair eight times.