1. Text 16. Buddy, can you spare a book?

by Vladimir Kozlov at 25/11/2010 20:09

Apart from jobs and living standards, one of the biggest casualties of the recent economic crisis has been Russians’ reading habits.

Since the crisis hit in 2008, Russians are buying one-third fewer books – and the book publishing industry’s sales revenues are down by one-fifth.

It’s a big turnaround from the boom times, when total sales were growing by 10-15 per cent a year and reached nearly $2.5 billion in 2008, says Oleg Novikov, general director of Eksmo, one of the country’s largest book publishers.

“As retail prices went up and so did the [industry’s] financial performance, demand stagnated while no one paid attention to it,” Novikov said. “Now we’re facing a decline not only in reading but also in the consumption of books. In 2009 and 2010, the number of books sold declined by one-third, and that cannot be compensated by raising prices. In monetary terms, the industry shrank by about 20 per cent.”

In 2010, the numbers of books sold is likely to fall a further 10 per cent, Novikov said.

“On the one hand, against the background of the crisis, this doesn’t look catastrophic,” Novikov said. “But, on the other hand, it is hard to believe that the market is going to rebound, as people have been reading less.”

The drastic post-crisis fall in reading has accelerated a process that was going on anyway, he says. Since the mid-1990s, reading in Russia has been declining, with 2 per cent of the country’s population a year quitting reading altogether. As a result, the proportion of actively reading people has declined by roughly one-third over the last 15 years.

Print-on-demand. Visitors to book fairs gravitate towards new technology

And the recovery will be slow, Novikov believes, as it will take years before new formats, such as print-on-demand (POD) and electronic books, begin generating substantial profits for publishers.

Under the print-on-demand format, just about any book can be printed in any print run, beginning with a single copy.

“For some titles, regular printing works better, and for some, POD is more suitable,” Yevgeny Khata, CEO of Kniga Po Trebovaniyu (Book On Demand), told The Moscow News. “A publisher may not be sure about the prospects of a title and could choose to put out it first by POD distribution, which eliminates risks. Or, for instance, for a book that would sell only 500 copies a year, it may make more sense to just do POD-distribution.”

A customer can order a POD book just like any other title, and it will be printed at the press closest to the store’s facilities and sent to the customer just as any regular book. In theory, an order could be processed within 24 hours, although in practice it normally takes longer.

But the share of the POD segment is still very small. Khata put it at 0.2 per cent of the total market, which he estimated at $3 billion a year.

“In the United States, the POD distribution [accounts for] about 15 per cent of the total market,” Khata said. “Now the situation is also changing in Russia, but it is going to be several years before POD books have a real impact.”

The retail price of a POD book is 30 per cent to 40 per cent higher than that of a regular book. “But this is justified,” Khata said. “We’re giving the customer an opportunity to buy a book that is otherwise unavailable.”

 Meanwhile, “book machines” that allow a customer to place a POD order that would be executed within an hour, while the customer browses the store or drinks a cup of coffee, have yet to come to Russia.

 Some large publishers remain very sceptical about POD, however. “In Russia, print-on-demand exists only as a technology, and there isn’t even a small business employing this technology,” said Novikov. “Maybe [some day] it will be needed and used, but it won’t happen earlier than in five years.”

Fighting e-book piracy

Publishers are also puzzling how to make electronic books work in Russia, where consumers are used to downloading more or less everything for free from the Internet.

“In other countries, the electronic book market has been developing faster than here,” said Novikov. “To cut the proportion of pirated content, it is necessary to protect the original source… To that end, the government and society should combine efforts.”

In particular, Novikov says that copyright laws need to be improved, and there should be a crackdown on web sites hosting illegal downloading of e-books.

Meanwhile, Ozon.ru, Russia’s largest online bookstore, recently launched an e-book reader under its own brand, Ozon Galaxy, inspired by the success of Amazon’s Kindle e-reader.

However, there is one noticeable difference. While e-books downloaded to Kindle have digital rights management and can’t be transferred to another device, Ozon’s e-books have no protection, and many of them are available for free from torrent trackers.

Still, Ozon has faith in the future of e-books. “In Russia, the market is still is its formative stages,” Vladimir Samarov, Ozon’s sales director, told The Moscow News. “It absolutely cannot be compared to that of printed books, but it is growing rapidly and has a big potential.”

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