WeChat Is Getting Into E-Books. So How Is the E-Book Market Really Doing?

E-book growth has slowed, but print books will still be replaced.

WeChat Reading launched yesterday. It is a standalone app that uses WeChat's social network to recommend the books your friends are reading and, like WeChat Sports, ranks users by reading time to spur them on.

Web fiction is Tencent's strength, yet WeChat Reading looks more like a Kindle app with social features bolted on. Almost everything it recommends by default comes from publishers' print catalogs, even though it draws on the same library as QQ Reading. The likely reason: users will feel bolder about sharing in Moments.

According to publishers, WeChat Reading had been tested in secret for six months. The app is far from perfect, and payment and download problems crop up from time to time. But as a WeChat product it drew attention fast: in less than a day it reached the top three of the App Store's download chart for reading apps.

At last, something new has people talking about e-reading again.

The Shanghai Book Fair, which ended earlier this month, held 668 events large and small, and more than 500 publishers brought 150,000 titles. People talked about how East and West meet, about merchandise spun off from the Penguin series, about audiobooks. Almost nobody talked about e-books.

Over the past year, only 8,036 of the 270,000 new Chinese-language titles were released as e-books. On Amazon China's bestseller lists for the first half of 2015, only 50 of the 110 top-ten books across 11 categories were available on Kindle, and Kindle's e-book rivals carried even fewer.

In 2010, Nicholas Negroponte, author of Being Digital, predicted that print books would die within five years. That future does not look close. Worldwide, the e-book share of the market has stopped growing. The latest annual report from the Association of American Publishers shows the e-book share holding steady at about 21% for the second year in a row.

E-Books Were Once Cast as the Disruptor

Four years after launching the Kindle, Amazon announced in 2011 that e-books were now outselling print books on its US website. For every 100 print books amazon.com sold, it sold 105 e-books.

That was the golden age of e-books. After three straight years of triple-digit growth, the growth rate of US e-book sales peaked, and almost every book fair and forum was debating "the end of the book."

Meanwhile, as smartphones and tablets sold briskly, China entered its own e-book war. In October 2010, Li Ruyi started the "Tangcha Project" to produce licensed, paid reading content. Duokan, Douban and Dangdang soon followed with their own apps for selling and reading licensed books.

Then came the e-commerce companies. In February 2012, JD.com, which had been selling books for less than a year, began selling e-books, and Dangdang's own e-reader, the "Dukan," went on sale that July. Amazon opened its e-book store in China at the end of the same year.

In June 2013, Amazon's E-Ink reader, the Kindle Paperwhite, officially went on sale in China. To support the launch, Amazon even broke its worldwide practice of never paying advances for e-book rights: it paid 1 million yuan to beat rivals such as China Mobile and iReader to the first-release e-book rights for Yu Hua's new novel The Seventh Day. For a time, the Kindle edition of The Seventh Day outsold the print edition in the combined rankings.

The Kindle's arrival in China was seen as a turning point. Tao Weipeng, an acquisitions editor at the e-book center of CITIC Press Group, recalls that in the month the Paperwhite went on sale, sales of CITIC's e-books quadrupled.

But the Growth Didn't Last

In February this year, Peter Thiel's Zero to One: Notes on Startups, or How to Build the Future was published in China. Within three months it had sold more than 1 million copies. Yet this book, said to be a publishing phenomenon, sold only about 100,000 e-book copies across all platforms combined.

E-books trail print not only in sales but also in range.

Amazon's bestseller charts are the main yardstick publishers use to judge how the industry is doing. QDaily compared the charts for the first half of 2015: of the 150 books in the top ten of 15 categories, only 56 were on Kindle.

The picture is worse on iReader, the leading mobile reading platform after Kindle, and on WeChat Reading, which launched only yesterday.

So even among bestsellers, only a small share has been digitized.

"Fast-food bestsellers are definitely the strongest sellers as e-books. You download one, finish it, and never want to read it again," Zhou Hailun, managing director of Penguin Random House (Beijing), told QDaily.

Yet even on the fiction, literature and social science lists, the categories best suited to reading on a phone, only about 40% of the top ten are on sale as e-books.

In categories less suited to e-reading, such as technology, periodicals and children's books, e-books are even scarcer:

Since Duokan was folded into MIUI, the e-book platform publishers mention most often after Kindle is iReader.

This e-reading app, which got its start in the Symbian era, launched the iReader e-book store and now adds 8,000 to 9,000 e-books a month. Counting web fiction, it has 420,000 titles on sale. But last year alone, more than 400,000 books other than web fiction were published in China, while fewer than 10,000 new e-books came out.

Neither iReader nor Amazon can claim to be the biggest e-book platform. Most of the market still belongs to the telecom carriers.

In fact, e-books did not get a late start in China. Cao Lingling, deputy director of channels at the CITIC Press e-book center, told QDaily that CITIC has had an e-book department since 2009, and that its first partners were the mobile carriers.

Through apps preinstalled on contract phones and reading packages bundled into phone plans, the carriers have always been the largest e-book distributors. But few people actually opened them to read.

For a long time, the carriers' reading packages could only be browsed through mobile web pages, which all but guaranteed that few people would read those e-books.

Everyone Reads on Their Phone. Why Are There Still So Few E-Books?

People have been listing the advantages of e-books for years. They are thin, light, portable and standardized. Publishers and bookstores carry no inventory. Book lovers no longer have to haul a mountain of books every time they move, or worry that books ordered online will arrive damaged in transit.

E-books are not expensive to make. Take iReader: once it has the rights, an editor re-typesets the book from the publisher's source files. Even an e-book with added video and images takes one professional editor only three or four days.

But before production can begin, there are many obstacles to clear.

Messy rights management was one of the biggest problems when e-books first went on sale. Between 2005 and 2008, the "right of communication through information networks" was still a new concept, and contracts specified only the right to publish online.

"Whether a contract like that can be used is something we have to discuss with the legal department," Cao Lingling said in an earlier interview. In the early days of CITIC's e-book business, every e-book listing needed a description, a price and a synopsis, and much of the staff's time went into compiling this information and the spreadsheets.

Many publishers held no e-book rights at all. That is why, around the time Kindle entered China, Amazon had to approach publishers one by one to expand what it could sell.

From 2012 to 2014, the number of e-books on sale in China exploded, including books that had gone undigitized for more than a decade. By now, every book that publishers are willing to release digitally has been digitized, and the pace of digitizing new books has begun to slow.

Competition between e-books and print books still worries many publishers.

"Growth (of e-books) cannot come at the expense of print readers." That view, from Song Qiang, head of the planning department at People's Literature Publishing House, is common among publishers.

Many book editors will say e-books have no effect on print, yet when they set prices, they make sure the e-book price stays well apart from the print price.

When bestsellers such as Zero to One and Steve Jobs came out, the e-book price was not much lower than the discounted print price. Zero to One sold for 27 yuan on Amazon and 18 yuan for Kindle; in iReader's e-book store, its price before a promotion came to the equivalent of 18 yuan. The aim was to protect print sales.

For every print book it fails to sell, a publisher loses not only the sale price but also printing and shipping costs, which often come to 30% of the list price.

Chinese publishers are not alone in fearing that e-books will eat into print sales. The overseas publishers and rights agents who license books to China share the fear.

Tao Weipeng told QDaily that when foreign books are licensed, the rights contract includes clauses specifically on e-books, and agencies often keep tight control over pricing. Some rights holders write into the contract that the e-book price must be no less than 40% of the print list price, while print books are often sold at 30% off or more. That leaves e-books with only a modest price advantage.

Release timing is another point that platforms, publishers and rights holders have to negotiate hard. Sometimes the rights holder requires that the e-book not appear before the print edition, or that it come out a fixed period after the print edition goes on sale.

Even if publishers accept the high price and the delay, they may still not get the rights.

"Some rights holders don't trust the Chinese market enough. They think e-book revenue sharing isn't transparent, so they simply don't grant e-book rights," Tao Weipeng said. "And some publishers don't make e-editions at all. Post Wave, for example, says it isn't ready."

In addition, when a Chinese publisher plans a series, the rights to each book may belong to a different overseas owner, and each must be negotiated separately. In the end, the publisher may not get digital rights to every book.

Since 2013, CITIC has been building its "Singularity series," which includes Peter Thiel's Zero to One, Ben Horowitz's The Hard Thing About Hard Things, Eric M. Jackson's The PayPal Wars and The Alliance by LinkedIn founder Reid Hoffman. On platforms such as Amazon and iReader, only three of the series are available as e-books.

Once Print Goes Digital, It Isn't Always an E-Book

Against this background, can WeChat Reading become another turning point for e-books?

Less than 24 hours after WeChat Reading launched, dozens of posts shared from it had already appeared in my Moments feed.

Compared with web-fiction staples like "domineering CEO" romances and Battle Through the Heavens, the books WeChat Reading recommends, in business and management or history and biography, are clearly better for showing off in Moments. To keep users in the app longer, WeChat Reading has built a loop of comments, likes and shares.

Compared with channels such as Amazon and iReader, WeChat has a better chance of using its social network and payment system to get the majority who rarely read to read one or two more books. That is the more mainstream audience.

But that is about all it can do. E-books have not, as publishers and e-book platforms once imagined, used better technology to deliver a richer reading experience and eventually cover every kind of book.

In fact, many kinds of "reading" once thought hard to turn into e-books have already gone digital.

Textbooks and study guides, for example,

are rarely made into e-books, but learning apps such as Yuantiku and Liulishuo meet the same need for tutoring just as well, or better.

People learning to cook used to buy one cookbook after another and line them up in the kitchen. Now food apps such as Xiachufang mean nobody needs to buy a cookbook as an e-book either, and a food community can do more than a book can.

Dictionaries, personal finance books, fitness guides and other content that once required a book have likewise been replaced by mobile apps.

Whether it is Amazon, WeChat, iReader or any other e-book platform, what they hold today is only the part of books suited to linear reading. More kinds of books will be replaced by apps that offer a better experience.

Print books will be thoroughly disrupted, but not by e-books.

Cover image: 3tags

(Graphics: Cui Qiwen. Zhong Shuting and Tang Yiyuan also contributed to this article.)