Marketplace Czech e-book publishers still see bright prospects in spite of local market difficulties

12-11-2014 13:42 | Chris Johnstone

E-books have been slow to take off in the Czech Republic with taxes, a local penchant for piracy, and caution from some of the traditional print publishers some of the factors in its slow roll-out. But the optimists are still sticking to the script that e-books can elbow themselves a much greater share of the market.

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'Svět knihy' book fair, photo: Kristýna Maková'Svět knihy' book fair, photo: Kristýna Maková The Czech Republic’s flagship annual book fair launched last week in Prague’s art deco exhibition exhibition grounds. And if the clock was turned back 100 years to fit the décor, the participants might not have been that surprised. Traditional books in all shapes and sizes predominated. In spite of the impression sometimes given from trips on Prague’s metro or trams, electronic or e-books were something of a sideshow.

That’s not the case in what could be regarded as advanced e-book markets such as the United States and United Kingdom. Here, e-books are reckoned to have corned around 20 percent of the new book market with some putting the figure even higher. Most major publishers now straddle the traditional print and e-books markets.

In major continental European markets, such as Germany and France, e-books are believed to have developed a lot slower with estimates putting the market at between 3 and 5 percent of total book sales.

It’s pretty safe to say that the Czech e-book market has not evolved as fast as some of those who jumped into the market around five years ago might have expected. According to one estimate by a market participant, the Czech market for e-books is about as big as the Czech market for dried tomatoes. That’s not too big, but its backers and believers are still convinced that it can make substantial inroads into the share of its almost 600 year old print and paper rival. Antonín Chadima could be regarded as one of the pioneers after transferring from tradition publishing to e-books at the start of 2012 when the traditional Plzeň-based Czech publishing house Fraus launched into the new medium.

Fraus media, which has won awards for its textbooks used in Czech schools, started by largely seeking to produce the same sort of content for e-books but its ambitions have now broadened. Project manager Mr. Chadima takes up the story with the publisher already offering around 3,000 e-titles and electronic sales at around 200,000 a year.

Antonín Chadima, photo: archive of Fraus MediaAntonín Chadima, photo: archive of Fraus Media “We have quite a big market with fiction, crime books, and the erotic trilogy ‘Fifty Shades of Gray’ are what is most sold in the e-book format. We are a company which is selling textbooks and we have quite a big success with selling textbooks for school with it representing about 10 percent of the revenue of the company. We have quite a lot of money and good success from textbooks but we want to step into the market selling normal books, non-fiction and we are looking to sell more non-fiction books than fiction. ”

In a way, the e-book format can lend itself better to non-fiction than fiction with the interactive applications such as voice and video built into the book to give extra details at the click of a mouse. But the costs of building in this extra sophistication can rapidly add to the costs of publishing e-books.

At the moment, according to Chadima, the costs of publishing convention books and e-books are roughly the same and the final prices should be in the same ballpark area. Paper accounts for just 10 percent of the costs of creating normal printed books so there is not much of an advantage from the savings there. He sees the way forward in producing more sophisticated versions of e-books that can offer the readers a lot more than the paper equivalent.

“It’s sometimes easy to make a plain e-book from fiction bit it’s challenging to make a non-fiction book with lots of images, maybe videos, which are maybe as a CD-rom in the printed book, or if you want to make an e-book from an art book. These are the types of books we want to sell. That is why we don’t just say to the publishers ‘just give us the books, we will sell them.’ We want to give them a full service. We offer them a service. We want to help them with preparing the books, marketing them, and selling them. That’s the way how to convince them to produce e-books because they mostly don’t produce them at this time. At the same time, the users want the books. They are asking for the books.”

The sluggish take off of e-books has had some specific Czech causes. One of them is the fact that the higher rate of value added tax was recently put on book, paper and electronic, across the board. While there are preparation well in train for the tax rate on the paper version to come down to a lower rate of 15 percent it looks like the higher level for electronic books could remain in place. Atonín Chadima again.

Photo: Štěpánka BudkováPhoto: Štěpánka Budková “There was activity, political activity, to reduce the tax rate on printed books but they did not include e-books, it was just for the printed books. We will have to carry out a similar action later on for e-books.”

There is also a more insidious problem with the development of the market and that is the Czech habit if believing that everything that can be downloaded should not have a price tag on it but be available for free. In this case, there are some market models which hold out the promise that this trait can be tackled.

“We have a bigger piracy rate of illegal e-books than Russia, one of the countries which has one of the biggest rates of illegal e-books. And it’s quite a problem for the publishers and the e-book sellers. One of the models, one of the ways how to make money by selling e-books in such conditions is to lower the price so that the customer will expect a lower price. He has a choice to illegally download a book or buy a book. He mostly decides to take the illegal book but it takes him quite a lot of time. He has to find it, google it out, and so on.

“But if I give the customer a service where he can buy books for very low prices or for a yearly subscription and I give him books in categories and in very easy to use formats, then he will use my services. But then I will have to use adverts to get money not from the customer but from customers using the advertising. This is one of the models which seems very successful and I think this is true not just for the Czech Republic but those models are used throughout the world. ”

It should be mentioned perhaps that it is estimated that 70 percent of e-books in Russia are pirate versions. The more complicated versions of e-books have another advantage as well as the premium price that they command and that is the fact they are a lot less liable to the predations of the pirate.

Atonín Chadima: “Another possibility to successfully sell e-books is to sell interactive, enriched, multimedia e-books which cannot be copied so easily or be shared. Maybe you can download the text but not the interactivity, the video, or the multimedia. You can ask for a higher price for an enriched book than for a printed book and those books are quite successful on –books, i-share, and i-tunes and our own platform too, Flexibooks, and I think this is the way to go. ”

Photo: Štěpánka BudkováPhoto: Štěpánka Budková E-books have perhaps another marketing factor in their favour as well. Most of those willing to switch from printed books or buy both formats are younger people, mostly below the age of 40. These are also the group that is most approachable by low cost social media. Indeed, some specialist e-book publishers, such as Kniha Zlín, have specialized in publicizing new titles, making special offers, and targeting readers likely to be susceptible to certain types of books via Facebook, Twiter, and You-tube.

Kniha Zlín, founded in 2004, has been using social media big time for its marketing for the last four or five years. Its annual sales of e-books are around 20,000 a year. That’s still small but the company believes there is still plenty of room for growth, albeit at perhaps a slower rate than it might have been hoped for at first.

 

The episode featured today was first broadcast on May 21, 2014.

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