Content Resource: The Key to Success in E-book Industry

2010/11/22,By Anne Zhang China IP,[Copyright]

Hardware manufacturers launched the domestic e-book market, which was in complete contrast to e-book predecessor---Kindle. The success of Kindle is attributed partially to its pleasing appearance, strong technical skills, unique operation model, and numerous of resources with 300,000 kinds of books, 30 newspapers and 25 magazines.
At present, technology is no longer the bottleneck of domestic e-reader manufacturers. Combining the E-ink display screen developed by Prime View International Co., Ltd. and Samsung chip, a Shenzhen shanzhai manufacturer has designed a male die. Presently hundreds of small zhai manufacturers are capable of manufacturing the e-reader, let alone big manufacturers, and undoubtedly, there will see a sharp increase in the production of e-readers. However, the concerns of consumers are not only limited to the e-reader; but rater the contents. Many insiders are clearly aware of the value of contents. “In fact, contents are the soul of e-book,” said Yang Hong, the chairman of Canton Jinchan software R&D Center Co., Ltd., “Armed first with contents, then Amazon can move to device manufacturing. No domestic companies adopt such an approach.”
Analyzing the problems existing in e-reader research and development, Shen Shuirong, the Secretary of People’s Press, told China IP journalist, “e-book without contents is valueless. The situation where terminal manufacturers go to publishing houses begging for books will not last long. Two contradictions exist. The first one is between one terminal device and various contents. As one terminal device cannot contain all contents of all publishing houses, a user may have to buy hundreds or even thousands of terminal devices. Apparently users cannot accept such a method. The second one is between old books and new books. At present, the contents in e-book are mostly from old books. It requires rather a long time to transmit the contents from paper books to digital forms. In terms of contents, e-book lags behind the paper book. A good operation model may guarantee that as soon as news contents come out they will be deposited in e-book. But such an operation model is not mature enough to reach this goal. Such two contradictions cannot be reconciled in a short time.” He added “At least five terminal device companies have come to us for cooperation. However, they just consider their own interests and ignore the interests of publishing houses. Therefore, no agreement has been reached. We are planning to cooperate with the e-book companies under a new model.” In a word, contents have become a holdup for e-book development.
Contents function greatly
At present, three forces exist in the domestic e-book market, that is, manufacturers of e-reader, copyrighted platforms like online reading and digital libraries, and content producers such as authors and presses.
With the development of technology, e-book competition has transferred from “hardware” to “software.” In Hanwang’s word, the content and its digitization are crucial in this fight.
While the manufacturers of e-book are busy negotiating with contents producers, the latter finally realize that good days are ahead. Equipped with large funds and enough content, some large press groups are determined to join the battle.
Making full use of copyrights, the Shanghai Century Publishing Group developed “sea reader” which was the first e-reader designed and developed by a traditional publishing house. Overcoming various difficulties confronted by ordinary e-reader manufacturers especially in automatic typesetting, chart and picture fitting with the e-reader screen, “sea reader” has become the world-leading digital typesetting device, which can automatically transfer Chinese characters into different targeted languages. More importantly, “sea reader” inputs the entire edition of Cihai <the sixth edition> (An Encyclopedia of the Chinese Language). With Cihai’s search engine, readers can easily find required information. The Shanghai Century Publishing Group is planning to key in nearly a hundred bilingual tool books and specialist tool books with independent intellectual property rights into the “sea reader,” as well as with General History of Chinese Culture (Zhonghua Wenhua Tongzhi ), ten kinds of expo books and 200 classical works.
The Shanghai Century Publishing Group has also created a sea reader website, sharing fine quality books and newspapers from domestic and foreign press and publishing organizations. Adopting the world advanced “cloud computing” service platforms, the Century group can be accessed online for reading and at no cost downloading to users through the WIFI function.
Chen Xi, Chairman of the Shanghai Century Publishing Group, said, “The bringing out of ‘sea reader’ signified the emergence of a new charging model in traditional publishing field.”
Ji Xipin, Chairman of the Duzhe Publishing Co., Ltd. with a top circulation in Asia, said, “the e-book of Duzhe would come out in May, 2010. At present, the Duzhe group is establishing a digital database and regularizing all magazines, books, audiovisual products to make full use of various resources.
It has been reported that the new product would be exhibited at the International and Creative Industry Expo (ICCIE) in Shenzhen in May. Since the second part of the year, readers could read the latest Duzhe and the classic excerpts over the past 30 years through the paper-less, energy-saving, low-carbon e-reader; they could also download various books, thus, making the digital library accessible to all Duzhe’ readers.
Duzhe Digital Technology Co., Ltd. is now fully integrating digital resources, greatly reducing the institutional barrier in the integration of a new digital publishing industry into traditional publishing industry. Duzhe will no doubt lead the IT industry in the traditional publishing industry, realizing volume production in electronic journals to push out its self-owned brand. The Duzhe e-reader is not only internally installed with e-journal modules, but also equipped with electronic ink display technology. Peng Changcheng, the General Manager of the Duzhe Publishing & Media Co., Ltd., said “The e-reader of Duzhe is smaller than the paper Duze in size, but with large capacity and easy to carry.” 
The established domestic publishing group is not large in number, and most copyrighted resources are controlled by the 500 big or small publishers. Liang Gangjian, President of the China Radio & Television Publishing House, told the journalist, “For most publishing houses, they don’t possess the required conditions to research and develop e-books. While the e-book requires a large number of funds to run over, traditional publishing houses are not allowed by laws to absorb funds. They can only cooperate with a specialized technology company to develop e-books. At present, publishing digitization is a common approach for insiders; at the same time paper publishing will not die out, which is also common sense. How to find a balanced point between the two is the problem insiders are thinking about and attempting to solve.”
Who can lead the books world?
Xie Guangcai, vice president of Chinese All, said that “The copyright resources are dispersed among different domestic book markets and no digital publishing company with enriched contents exists.” According to Mr. Xie’s introduction, there are annually about 100,000 digital books on Chinese All. When targeted at vast ocean of books, the digitalization of more books has a long way to go.
Faced with dispersed copyright resources, copyright holders owning comparatively mature digital platforms keenly observe the potential opportunities in e-books and raise the concept of “cloud” one after another, with an attempt to collect all good books. There is every appearance that they want to become the e-book giant.
On March 10, 2010, Shanda Literature Limited (SDL) held a press conference and launched the “One person, One book” plan to implement its e-book strategy. The scheme includes three approaches, establishing the “cloud library”, opening distributed book resources and opening the solutions on the hardware and software of e-books. It was announced at the conference that after a year of preparation and promotion Shanda Literature has accomplished the plan and layout in every industrial chain of e-books; and both the digital content providers and hardware providers can benefit from such a process. Hou Xiaoqiang, the CEO of Shanda Literature, said that “Anything is possible for Shanda to take a hand in terminal development. However, the focus at present is on the OPOB plan (“One person, One book” plan) concentrated on content exploring.”
The OPOB plan consists of three kinds of openness; technology, contents and terminals. Shanda will make its research solutions open to the public; and the “cloud library” has been endowed with all original copyrighted contents from Shanda that can also be used by other providers; and device producers accept the software solution carried out by Shanda. “The former two depend on the third. Only when the manufacturers partially or totally adopt Shanda’s software solution, can the ‘cloud library’ be put into operation,” said Hou xiaoqiang. In his opinion, OPOB plan’s current focus is to persuade terminal producers to accept his software solutions. If the third openness can bring more qualified terminals, more cooperators will come to provide contents or willfully accept Shanda’s solution. Only on those conditions, can a true digital library come forth.
While Shanda Literature was launching the solution to the digital publishing on net literature, on March 23, 2010 in Beijing, held a worldwide release ceremony themed “free ‘cloud reading’ ---the first search engine of Chinese books” which had agreements with dozens of cooperators and hundreds of publishing houses. The long-prepared “cloud reading” platform was completely launched. Based on the relationship established by Founder with the publishing industry and a number of publishing institutions, as a member of Founder Group currently has collected 1,800,000 genuine books as well as 600,000 readable e-books. PC, mobile phone and e-reader devices, providing readers with barrier-free reading and purchasing across various platforms, can wirelessly connect Fanshu net. Such an approach, on one hand, guarantees the traditional paper publishing, and on the other hand, permits the digital publishing through various terminal devices such as internet, cell phones, and e-reader. Zhao Ge, the CEO of, commented that the e-book carried by would charge from its users who can pre-read 30% without cost. The price of an e-book depends both on the popularity of the book and the evaluation of the publishers, with a basic price as much as one third of the paper book. Confronted with the hot competition from Shanda Literature, Zhao Ge was confident in that “Standing on both sides of writers and publishers, it’s hard for Shanda to find a balanced point to keep its own interests. Shanda prefers to internet literature while Fanshu emphasizes on the publication of traditional literature. The difference in contents may bring the two competitors to cooperate with each other.”
Along with the entrance of Shanda Literature into the e-book world, many companies such as Hanwang, Founder, China-pub, Chineseall and Baidu have attempted to walk in the digital copyright field. Zhang Yanan, an analyst from AnalysisInternational, thought the operation model of “Buy contents, give terminal device ” is likely to come into being.
Confronted with the copyright bottleneck
The emergence of e-book promotes the rapid development of our country’s digital publishing industry. Copyrighted digital contents are the key elements needed for e-book producers to succeed. As the copyright situation is considered, big terminal producers are trapped in fights with shanzhai manufacturers. As shanzhai manufacturers mainly download pirated resources, they have a price advantage. Therefore, it is difficult for copyright holders to charge Chinese consumers who regularly use free Internet resources. However, judging from the legalization tendency of network video, e-book can also pre-see a bright legal future.
Fang Zhonghua, Senior Vice-President of the Founder Group and Chairman of Beijing Founder Foread media Technology Co., Ltd. believes that E-ink based e-reader cannot explore a large market in a short time. Just by buying devices and downloading pirated contents is not the right way to go. A healthy e-reader industry should establish a platform to let writers, publishing institutions, hardware producers and technology supporters work together to solve such problems as format standards of e-book, copyright protection standards and pricing principle. Each participant within the industry will benefit if the government is urged to enforce laws and provide funds.
Additionally, the copyright problem of a digital library is vital in the process of e-book development. A lesson has been drawn from Google’s digital library. In Zhao Ge’s opinion, “the digital library of Google was born with some disadvantages which incurred a series of copyright disputes. The failure of Google’s digital library existed in no accumulation of copyrights, no agreement with right holders and a limited volume of 80,000 e-books compared with 10,000 pieces of e-books.”
Zhao Ge also expressed that readers could not find pirated resources on and the  “cloud reading” platform was an oriented search database whose large volume required a directional function. She firmly believes that “600,000 copies of books can basically satisfy the requirements of all users. Meanwhile, we can promise all the books are legal.”

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