Two extremely helpful and comprehensive articles about ebook market in Brazil were just published at Futurebook.
First one, written by Stella Dauer, describes in detail the state of the ebook technology. Eduardo Melo shares information about the current number of titles offered by Brazilian ebookstores, as well as predictions for 2012.
So far, based on news coverage from top ebook sites (check posts in Publishing Perspectives), I was convinced Brazil is far more advanced than any other international ebook market. It makes perfect sense when combined with rumors about Kindle Store Brazil launching in summer.
However, after reading those two articles from Brazilian ebook market insiders, I can say that Poland is not far behind the benchmark Brazil sets. I guess experts from several countries could say that about their markets, as well.
The rest of the world is catching up and most of us are not aware how fast things change, so it’s good to share with others facts and figures from local markets.
In this post I’ll try to describe in detail the Polish ebook market, with a special focus on the role of the Kindle and the growth dynamics.
In the Kindle shadow
Let me start from a personal opinion. I think our market is very much breathing the air from Amazon. I’m not sure this sort of dependence is pushing the market forward, but it’s definitely changing the direction of where we are heading. Let me guess, many of those 170 countries where Kindle devices are shipped, are just like us – living on the news from Jeff Bezos.
One example from 2009. Polish mainstream media and blogosphere were heavily covering the introduction of Kindle 2 in February – the device which at that time was only available in US.
At the same time, a Polish ebook project, called Eclicto, was being developed by Kolporter SA. It was a first modern ebook ecosystem in our country, with a dedicated ereading device (Netronix EB600 with a localized software) and ebooks in epub format. Unfortunately, the project didn’t grab that much of mass media attention.
The size of the market
When Eclicto launched in December 2009, their catalog included 800 titles, but only about 300 were in epub format.
Next autumn, Empik, the Polish Barnes & Noble (which entered ebook business by buying one of the largest ebook distributors, Virtualo), started an ebookstore with 3,500 books in epub format. Most of them (2,600) were public domain books. Empik claimed to increase the offer to around 5,000 ebook by Christmas 2010.
Currently, Virtualo has as much as 17,000 ebooks in epub format. When we take out public domain classics (14,000) we have up to 3,000 titles released by Polish publishers. What’s very important, and I’ll write about it later, there is also a growing offer of publications in mobi format. There are over 8,000 mobi ebooks in Virtualo, including 1,400 non-public-domain titles.
Another big Polish ebookstore, Nexto, claims to sell over 17,000 digital items, but they count together ebooks, digital magazines and audiobooks, so most probably their offer of newly released ebook titles in epub is comparable to Virtualo (about 3,000).
How big is Polish ebook market, moneywise?
Bartłomiej Roszkowski, CEO of Nexto, estimated for Rzeczpospolita daily in April last year, that ebook sales would reach 11-12 million PLN (3,5 million USD) in 2011. And it’s at most 2% of the book industry.
The biggest ebook distributors are Virtualo and Nexto, but there are many other players on the market. If I had to describe the maturity of the market from a supply endpoint, it’s pretty advanced. Year ago I would be still talking about the beginnings.
It’s distributors, who are mostly driving the ebook market. The competition is tense, especially when we have in mind that the adoption of ebooks among readers is relatively small and powered by purchases of dedicated devices, which are, compared to income, still too expensive.
Many distributors offer ebook conversion services, not only Virtualo or Nexto, but also Legimi, Elib or iFormat, to name just a few. They improve their tools and efficiency and I think their current conversion potential is much higher than the number of newly released books.
When it comes to distribution, Virtualo is aggregating content not only to Empik, but also other online retailers. Nexto is running a successful affiliate program, with the current number of partners crossing 15,000. iFormat is utilizing the cooperation with over 1,800 bookstores to offer them web storefronts with ebook publications.
One very important thing to notice is that publishers don’t wait for offers from ebook distributors, not any more. They innovate as well – and a very successful. Two interesting projects are Woblink and Ebookpoint.
Woblink was launched by Wydawnictwo Otwarte as an app-powered ebookstore. Currently they also have a web storefront, with more than 30 publishing houses participating in the project. The platform is designed to sell books from publishers by publishers, without the participation of ebook distributors.
Ebookpoint is an ebookstore introduced by Helion Publishing Group. Normally, publishers are the last ones to drop DRM. Well, all ebooks that you can buy in Ebookpoint are DRM-free. They are clearly going the O’Reilly Media way. Right now, if I had to name a single institution, which is most active in promoting a DRM-free attitude, it would be Ebookpoint.
Any company, which would want to enter the Polish ebook market, will be, most of all, just the next player. Apple have lost their chance twice. First, when they launched iPad with US-only iBookstore. Secondly, when they launched a Polish iBookstore with almost no books in our language.
If anyone can stir the market, it’s only Amazon. Not Apple, not Kobo, not Google – Polish distributors are already too strong.
Prices and offer
VAT is one of the most essential factors shaping the development of our ebook market. VAT for print books is 5%, but for digital books it’s as much as 23%. This cost is obviously being transferred to prices.
But things don’t look that bad, actually. Litera Lubi Cyfrę, an all-around-ebooks expert blog, at the beginning of the year has made a price check in major ebookstores. On average, prices of ebooks are 10-20% lower than print editions.
Interestingly, the lowest prices are offered by Empik (30% cheaper) and Gandalf (28% cheaper). Both vendors take content from Virtualo, which keeps being more expensive than them (only 12% cheaper than print books).
Ebook formats and DRM
Let’s come back to Eclicto, as Polish ebookstores learned a lesson from this case and nobody else followed this way.
Eclicto wanted to be too much like Amazon. They developed an integrated ecosystem and closed it with proprietary DRM. Being first on a market didn’t guarantee a success – and this is what happened to Eclicto. The medium-sized market like ours is just too small for closed DRM, well, it’s just too small for DRM at all.
The major ebook format in Poland is epub. Many ebookstores are using Adobe DRM, some are using watermark. A year ago DRM was most of all the requirement of publishers.
Now things are changing, as the example of Ebookpoint shows. Why? There comes Kindle, again.
Kindle is one of the cheapest ereaders in Poland – if not the cheapest. Plus it’s extremely popular. Plus customers assume they can get Polish books for Kindle with no problem. But there is a problem. The problem is called “where, the hell, are Polish books for Kindle”.
There are 60,000 Kindle device users in Poland. They can’t legally buy Polish publications, because there are not a lot of them in Kindle Store – actually, their number is decreasing, as Amazon is removing the titles already published.
Opposite to tablet users, Kindle owners bought their devices to read books. They don’t have a choice, they can’t switch to games or video. They have to get books to their Kindles.
International availability of the Kindle is encouraging users to piracy. This piracy is not related to price. This piracy is related to a lack of legal content.
I was running a series of workshop about ebooks in late 2010 and publishers were highly concerned about ebook piracy. I hope I explained the nature of this potential source of piracy: distribution channels are missing the target. And vice versa – Kindle users do not have access to distribution channels.
Readers would not be visiting file-sharing sites and seeking for files with DRM removed, if they could buy ebooks in compatible formats in legal ebookstores. And this is happening right now.
This shift towards mobi is, however, unexpected. Too many publishers are doing this at the same time. One strong reason is the number of Kindle owners. If there is the audience of 60,000 frequent book buyers, the question is who’s getting to them first.
The other reason is the rumor about Amazon being “in talks with Polish publishers”. Kindle Store is rumored to launch in April. I’m still very doubtful about that, but after I’ve read yesterday’s articles about Brasil, I’m not that doubtful.
So, we know there are 60,000 Kindles in Poland. But there are other devices, too. Bartłomiej Roszkowski estimates the total number of ereaders to be around 100,000.
The most popular brand of ereaders distributed in Poland is Onyx. The local distributor, Artatech, is very pro-active. They have signed deals with several ebookstores. The most popular model, Onyx Boox 60, costs 800 PLN (250 USD). Compared to that, if you buy Kindle 4 in Kindle Store US, you’ll pay, together with shipping and import duties, around 160 USD, for Kindle Touch – 197 USD.
Vedia is a Polish producer of consumer electronics. They have 4 ereaders in the offer. The one with e-ink screen, Vedia eReader K3, costs 699 PLN (220 USD).
When it comes to tablets, GfK Polonia estimated that their sales in 2011 would reach around 100,000. Predictions for 2012 are very optimistic – even 270,000 tablets may be sold.
Kindle is being sold by TV news and mainstream media. Every time Jeff Bezos says something, it’s being echoed and amplified on a local level.
Blogosphere is powered by SEO. The specific characteristics of a non-English blogosphere is that you’ve got more traffic from writing about the device which is not available in your country (like Kindle 2 was in 2009 or Kindle Fire now), rather than writing about our own – and sometimes very exciting – projects.
Major ebookstores have dedicated applications for iOS and Android. Virtualo, Nexto, Legimi, Woblink, iBuk and Bezkartek have apps for either iOS or Android, or both.
One common denominator is that those apps are not as advanced as the ones from international distributors. They just can’t be, we’re talking about totally different budgets for app development. The number of features, stability and design could be better.
But on the other hand, Polish owners of tablets and smartphones have access point to their ebook shelves. This helps them decide which ebookstore will be their default ebook provider. And it’s all about who will be handling customers’ cloud bookshelves.
Regarding cloud technology. Legimi was a first content provider to introduce the cloud bookshelf and syncing between devices (dedicated ereader – iOS app – Android app).
It’s surprising, that in a medium-sized ebook market, where many publishers still neglect self-published authors, and so do the readers, there are so many self-publishing platforms.
The first one was launched by Bezkartek, at the beginning of last year, after the wave of news about Amanda Hocking. It was operating more like an imprint, as there was no publishing dashboard, as we know it from KDP or Smashwords.
Virtualo has started a self-pub platform, too – and they are doing it right. An author can publish books in three formats (epub, mobi, pdf), opt out from DRM, there are stats available and other KDP-like features (oh, Amazon, again).
Most promising platforms are Wydaje, Publixo, RW2010 and Poczytaj. They have roughly a couple of hundreds of books in their offers. And I’d love to see their books being incorporated into the catalogs of major ebookstores – just like RW2010 does that.
In a smaller country, self-publishing is actually a very good way to increase the offer of electronic books. Having in mind that not only prices of devices, but also a limited offer are the major barriers for readers to embrace ebooks, self-publishing should be able to considerably contribute in this area.
(Via Ebook Friendly » Tips & More.)