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Understanding China’s complex publishing landscape

Two new reports ‘Found in Translation: How Social Media Platforms Can Help UK Publishers Understand Their Market In China’ (Nesta), and ‘The Publishing Landscape in China: New and Emerging Opportunities for British Writers’ (The Literary Platform) are published today (Wednesday 27th May 2015) to coincide with the launch of Book Expo America 2015, which this year welcomes China as the Global Market Forum Guest of Honour.

Below is an extract from The Literary Platform report ‘The Publishing Landscape in China: New and Emerging Opportunities for British Writers’. Both reports can be downloaded here.

China’s current publishing landscape is at once exciting and complex, and is in the midst of a significant transformation through its opening up to the world in commerce and culture, and through the impact of technology that is, as elsewhere, radically changing the way its readers consume and share written content.

Understanding the market

The value of the Chinese book (print and digital) market is reported to be €15,3m (£11.5 billion[i]).[ii] Classic British fiction such as Jane Eyre has always performed well in China, and contemporary British writer J. K. Rowling ranked as China’s highest earning foreign fiction writer in 2012, with royalties of over $2.4 million (£1.6 million) for The Casual Vacancy, and the debut UK novelist S. J. Watson ranked 15th with royalties of over $161,000 (£106,000).[iii] The growth of China’s middle classes, and their apparent thirst for Western brands and culture, represents, in principle, a major opportunity for British publishers and writers.

In addition, China is producing 20 million[iv] new English speakers every year, which could offer British publishers and writers an English-reading audience that rivals that of the US. Almost a quarter of students on full-time taught postgraduate courses at English universities are Chinese,[v] indicating future generations of an English-speaking, educated market for British book content.

Following China’s ‘Go Out’ policy in 2009, designed to assist domestic companies in developing a global strategy to exploit local and international markets, state publishers now work more widely in the commercial international rights-dealing world with foreign agents and publishers. Their lists of book titles have been widened and diversified through working with smaller independent publishing companies.

But the transformation of China’s traditional publishing system is only one half of the story, with Chinese readers avidly consuming content on mobile devices that has not been commissioned through China’s traditional publishing channels, but instead provided by online literature platforms such as Cloudary (also known as Shanda or Shengda), which merged with Tencent Literature in 2015.

Traditional publishers in China might be dismissive of online literature, as confirmed in our interviews, with some describing it as poor quality content for genre fiction, but the success stories and the great number of readers are impressive. Online fantasy author Jiang Nan ranked as China’s highest-paid author in 2013, with royalties of 25.5 million Yuan[vi] (£2.7 million). According to statistics from EnfoDesk, an Internet think-tank, revenue from China’s mobile-reading market surged by 90.7% year-on-year to 1.47 billion Yuan (£156 million) in the second quarter of 2013. The number of active users rose to 434 million during the same period.[vii]

This huge market, however, does not yet appear to be creating opportunities for British fiction writers, with Chinese genre fiction writers, adept at long-form serialised fiction on Chinese themes such as Ancient Chinese history, dominating the market.

Barriers to entry

Despite the potential for British publishers and writers in the Chinese market, there are still a number of barriers to operating within it successfully. Issues surrounding piracy, translation costs, import legislation and fears surrounding censorship are all factors that have traditionally discouraged British publishers and writers from operating in China, and that continue to act as sticking points.

There are, however, encouraging signs that some of these barriers are breaking down. Piracy and copyright are high on the agenda for the Chinese government, demonstrated by a 2010 memorandum of understanding between the UK Intellectual Property Office of the UK and the Chinese National Copyright Administration of the People’s Republic of China ‘acknowledging the necessity of promoting, improving and strengthening national copyright systems’.[viii] This commitment is further demonstrated by the creation, in Guangdong, of China’s first court dedicated to handling intellectual property disputes. According to some, this will be ‘a welcome move in a country long criticised for insufficient protection of such rights’.[ix]

On censorship, government control of the publishing industry is arguably shifting, with greater responsibility being placed on the publishers and platforms themselves in deciding what constitutes government-sensitive content. The policing of digital content now falls under the merged Chinese government’s State Administration of Press, Publications, Radio, Film and Television.[x] The Chinese government’s retraction of Sina’s online publication licence in April 2014, however, demonstrates its ability and intention to continue controls on digital content.[xi]

The quotas set by the Chinese government on other imported media (such as film) do not apply to books, and the processes of translating written content into English are being disrupted, making it easier and cheaper to make translated editions available in China.

Digital transformation

Digital transformation of China’s publishing industry does, however, create challenges for UK publishers and writers. Of the 414,000 books published in China in 2012, only 2.7% were e-books,[xii] the digital content form that is most familiar to UK publishers. China’s relatively slow adoption of e-books is due in part to the strength of the print market and bricks-and-mortar retail, and a reluctance from Chinese publishers to make digital editions available, due to fears about piracy and disruption of their own print market. Amazon Kindle, which has driven rapid e-book adoption in the UK and the US in the past five years, has only recently started operating in China and is now working proactively with Chinese publishers to acquire foreign e-book rights regularly.

In addition, in April 2015 the Chinese government released a document, published by the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), encouraging traditional publishing houses to move more rapidly into the digital space. It proposes the building of several digital publishing groups that are ‘strong, influential and credible in three to five years’, saying that ‘the integration of traditional and digital publications was key to meeting the challenges brought about by the rapid development of information technology.’[xiii]

Some anticipate that China’s e-book market is set to take off, but a major challenge for British publishers and writers will be the low prices paid for e-books, which will make it hard for all but the bestsellers to turn a profit. With so much pirated material available, e-books remain at very low prices, with consumers seemingly unwilling to pay much for digital content. In other countries where pirated material has been widely available, such as Russia and India, the establishment of a wide-ranging, legal e-book market has seen piracy noticeably reduced, with gradual increases in the prices paid for e-books. This pattern bodes well for China’s e-book market: with legal e-book distributors determined to reach the Chinese market, British publishers and writers with solid engagement strategies in place stand to gain.

One first step might be to establish social media profiles on China’s own social media platforms such as Weibo, WeChat and Douban. Chinese publishers are already actively engaging readers on these platforms, creating online profiles across all the major social media platforms. Many British fashion brands, media companies and institutions have also already started to engage with Chinese audiences directly, notably on Weibo with its 61.4 million daily active users.[xiv]

Some British brands are establishing their Chinese social media strategies and seeding out marketing content before launching products into China: this strategic approach might offer an interesting methodology for British publishers and writers to begin to engage with Chinese readers.

In January 2014, an article in The Economist magazine concluded:

Future consumer markets everywhere are going to look more Chinese. They will increasingly be cosmopolitan, luxury-minded and online. Firms that can flourish in China are not only winning today’s toughest market, but are also positioning themselves for tomorrow’s.[xv]

With the explosion of China’s social media channels, and the proliferation of Chinese online and e-book channels, British writers and publishers will undoubtedly find faster and more direct ways to reach Chinese readers. How these ways translate into revenue streams is currently less clear, but the sooner that British publishers and writers try to understand how to engage with this enormous online audience, the more quickly they can begin to understand how to monetise their relationship.

[i] Financial figures in this report have been converted into GBP via XE Currency Converter at May 2015 exchange rates.

[ii] IPA Global Publishing Statistics, Annual Report October 2013 – October 2014, International Publishers Association

[iii] Source: According to Royalties Earned in China (China Daily), October 2012

[iv] British Council, 2012

[v] ‘Almost a Quarter of Postgrad Students at English Universities are Chinese’, by Richard Adams, The Guardian, April 2014

[vi] ‘Fantasy Novelist Earns US$4.2m to Top List of Wealthiest Writers’, Yao Minji, Shanghai Daily, 6th December 2013

[vii] ‘Tencent Taps into China’s Online Literature Market’, Meng Jing, China Daily, 10th September 2013

[viii] Memorandum of Understanding on Strategic Cooperation on Copyright between the Intellectual Property Office of the United Kingdom and The National Copyright Administration of the People’s Republic of China, 2010

[ix] ‘China Planning to Open Nation’s First Intellectual Property Court in Guangdong’, Keith Zhai South China Morning Post, 23rd April 2014

[x] In 2013 the General Administration of Press and Publications and the State Administration of Radio, Film and Television merged into the SAPPRFT State Administration of Press, Publications, Radio, Film and Television. The National Copyright Administration, a subordinate department of GAPP, was also brought into SAPPRFT.

[xi] China’s Internet Giant Loses Publication License, Glyn Moody, Techdirt 30th April 2014

[xii] Global eBook Report, Ruediger Wischenbart Content and Consulting, 2013

[xiii] ‘China to build new digital publishing groups’, China Daily, April 2015

[xiv] ‘Sina says Weibo Daily Active Users up 4 pct to 61.4 million’, Reuters, 25th February 2014

[xv] ‘Chinese Consumers: Doing it their Way’, The Economist, 25th January 2014

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