Analysis: What will make ebooks tick in the Indian market
[Editorial notes: Amazon launched its ebooks store in India from the poll that Pluggd.in conducted (result:Will Indians buy eBooks? 35% ready to switch, if offered huge discount ), it’s quite clear that ebooks have a long way to go, when it comes to mass adoption. Guest author Jaya Jha (with inputs from Abhaya Agarwal), Pothi cofounder shares a detailed analysis on the state of eBook market in India.]
Prof. C. K. Prahlad makes an interesting point about poor consumers in his famous book “Fortune at the Bottom of the Pyramid”. Large scale businesses often fail to see the market at the bottom of the pyramid because consumption patterns at the bottom may be different from what they would generally expect. For example, without legal title of the land, these poor may not be willing to spend on improving their living quarters, or the public facilities surrounding their homes, but they would spend on TV, phones, gas stove etc. which would be considered luxuries compared to the basic amenities like clean drinking water they are missing.
This is true of Indian markets in general. There is a complicated notion of value in the mind of Indian customers and for any product to do well in India (in the India that is big, not the tiny, little India that could easily have been located in the US), it has to appeal to that notion of value.
e-books till now have failed this market. Following is a brief overview of what has happened in India in e-book market:
- Following the success of Kindle in the US, several “Indian” devices were launched. Notably Pi from Infibeam and Wink from DC Books. None of them survived.
- Both Infibeam and Winkstore continue to run their e-book stores, even after giving up on the idea of devices.
- Any data on e-book sales do not seem to be available publicly. But a number that had excited some insider (“it has taken off recently”) had sounded kind of unexciting to me.
- For WinkStore, DC books tried to digitize Indian language content. They are one of the biggest publishers in Malayalam. Being an industry insider, they did manage to get some big name regional language publishers, who provided the content. But digitizing Indian language content is trickier than digitizing English content due to the absence of good OCR tools. Most of the content was in the form of scanned images and does not seem to have gotten much traction from readers.
- India has a huge publishing outsourcing industry. A lot of content digitization for foreign publishers happens here. Coming from that experience, many companies are offering digitization services to Indian publishers also. Many of them are also throwing in “platform to help sell the content” in their “digital solutions”. But hardly anyone has put serious thoughts into it. They are like equipment sellers to prospectors in Gold Rush. Not surprisingly, the lack of actual sales of digital content makes many in the publishing industry skeptical about the costs involved in digitization.
- Over last year or so, some Indian publishers have started digitizing content. Penguin India has launched, Rupa is going to do that by the end of the year. Some independent publishers like Zubaan are also doing it. Again numbers from Indian market are not clear, but my educated guess is that sale of most of their digital content is coming from outside India.
So, what plagues e-book market in India? Many seem fond of the reasoning that Indians just love the physical book. They like to touch and feel and they like the scent of freshly printed book, they like to curl up in the bed with a book, etc. etc. I don’t buy those for Indian customers. Again we are talking about the India that is large, not the tiny, little part of India which could as well have been located in the US. The issue with majority of Indians is not that they love to read physical books. It is that they don’t love to read at all! Indians does not read beyond what is required to pass (and do well) in exams and possibly some self-help books. That can be a bad news, or that can be an opportunity. Can e-books make that India do something that the scent of freshly printed book could not? Make them read?
Future hopes and aspirations aside, let me talk of whatever little percentage of India does read today. E-books did not take off even amongst them. Scent of fresh books is blamed here too. The other culprit seems to be the high cost of e-readers. Given that e-books can be read on most tablets and phones, devices do not seem to be the bottleneck. Also when compared to Android phones, e-readers do not look very expensive.
I believe that the lack of adoption has more to do with our value orientation. E-books are convenient, especially if you are an avid reader, or you have to read for your living (as I am currently doing for Summary Town). When I need to read a book for Summary Town, I juggle between borrowing from friends, using my membership of Just Books, buying on Kindle, on Nook or on Flipkart (physical copy), whichever costs the least and does not involve inordinate amount of effort.
eBook: Value vs. Money
Value vs. money & effort calculations can be complex. I won’t go to the other end of the city to pick up a Rs. 250 book for free from a friend, but I don’t mind going in a 5-8 Km radius. If it is priced only slightly above Nook on Kindle, I would buy the Kindle edition, because I like the Kindle experience better. I might probably be tempted to pay a small premium for an e-book over the physical copy from Flipkart because I appreciate the convenience of e-books. But that is where it ends. A small premium! That too from someone who has explored a bit. Most of the market won’t see the convenience. Even I won’t pay US prices for e-books! But till now, in most of the cases, the available e-books have been much more expensive when compared to the corresponding print edition.
Now that is something an e-book retailer would have to think about. In publishing industry, the whole world is divided into several regions. Publishing rights for each of the reasons are separate and might be sold to different publishers. Right holders in a particular market publish and sell the book at a price point suitable to that market. When you get a Penguin book for Rs. 200 or a Tata McGraw Hill book for Rs. 400 (as opposed to $20 and $40 respectively in the US market), you are benefitting from a specially priced Indian edition. These books are “For sale in India, Bangladesh, Nepal… only” and it is illegal to sell these in a country outside these territories. Territorial pricing allows the books to be made available in different markets at different price points.
In e-books not much Indian content is available. And till now, nobody had figured out a way to bring international e-books to India at Indian prices. Even the “Indian” e-book retailers sold them at prices directly converted from dollar prices in the US. The reason the issue is non-trivial to solve is not so much technical as is legal and psychological. E-books make publishers more paranoid about piracy. They, of course, need to be convinced of technology being up to the mark so that lower prices are only available to genuine customers in the intended territories. Then somebody needs to sit down with the publishers and negotiate these rights for Indian market. And publishers need to work it out with other people they have a contract with – authors, for example. If their existing contract does not cover India specific e-book rights and pricing, then publishers are on murky legal grounds.
This is where the recent Indian Kindle store launch by Amazon has broken new grounds. You could always buy a Kindle reader and Kindle books from India. But now, several titles are available at Indian prices i.e. cheaper than or comparable to corresponding Indian print editions and much cheaper than their prices in US. A big barrier has been broken.
Now, if I were Amazon, I won’t immediately look to market Kindle devices in India. I would first look to market e-books in India, with the carrot that it is at Indian prices. Since Amazon already has reading applications for various platforms, let people read Chetan Bhagat for even cheaper than they are used to. The hope is that once they see the convenience and benefits of e-books, the device will also come into their list of things to have similar to a mobile phone or a computer. It is something like Gmail. What initially attracted people to it was 1 GB space. Once they started using it, they became a sucker for the ability to search and labels and neat conversations and so on. So, let people first buy books even cheaper than current print versions. Then let them get used to the convenience and social reading and sharing and ability to carrying thousands of books and so on. Let them invest in a Kindle reader after that. And it’s okay if they never invest in the device. Amazon just needs to make their reading apps better on all platforms and make money on the actual e-book sales.
But if marketing the device is indeed a priority, marketing on convenience, selection of titles or even savings over long term with cheap e-books is unlikely to make the cut. They have to find a way to appeal to the value consciousness of Indian consumers. And there is one place where they are eager to see value. How to make their kids do well. So, my dream advertisement by Amazon for Kindle in India will say something like following:
“Gift your child a Kindle e-book reader. He will read on it, and not waste time playing games!”
Before finishing, let me touch on the content that Indians do read. Most of India’s large and growing print book industry is in the education segment including text books, reference books, exam preparation books etc. Attempts are being made in separate quarters to tap into this market with electronic content. There the emphasis is not only on digitizing the text content, but more on making the learning easy and fun with interactive content, videos, apps and so on. Those efforts can be considered a part of the broad e-learning segment. Examples of startups working in such areas are Mangoreader, Attano,iProf and many others.
The road to adoption is not very easy even there. But the selling pitch is a bit clearer with enhancing the learning, rather than just a replacement for physical book. Also higher-education institutions have subscribed to journals in electronic format for decades now. So, at least some target group of customer is not opposed to the idea of e-content by itself. The challenges will remain in going beyond that small group, and also being able to bring the relevant and quality content to the table. It is easy to say that interactive content enhances learning. Creating quality, interactive content consumes much more resources than converting a text-only novel to epub. So, the jury is out on that front too.
Things are not going to change overnight. But I am optimistic about the future of e-books. Given our population, a difference made to even a small percentage of population can mean significant business. The industry players have to keep working hard to find the right value proposition for Indian market. Bringing existing products at existing price lazily to Indian markets won’t work.
What are your thoughts?