ChineseAll.com

Beijing ChineseAll Digital Publishing Co.,Ltd has filed for IPO on the Enterprise Growth Market of the Shenzhen Stock Exchange. Established in 2000 as one of the first digital publishing companies in China, ChineseAll would be the first of its category to go public if successful.

ChineseAll acquires digital reading content rights from authors and copyright licensing agencies, and offers content redesigned for digital devices/platforms or services to businesses and end users.

Source: ChineseAll

Source: ChineseAll

ChineseAll’s business clients include the three big Chinese telecom operators, Chinese internet companies and educational organizations.

As the three Chinese telco’s own all the mobile phone networks in China, they have been major distribution platforms for digital products, especially China Mobile which has the largest subscriber base. Digital publishing content providers like ChineseAll supply content or operate the mobile content business for them, taking revenue shares from content sales or fees for services. China Mobile has thus far been the biggest revenue contributor to ChineseAll, accounting for 67%, 46% and 44% of ChineseAll’s total revenue, from 2011 to 2013.

Chinese internet companies, such as social media giant Tencent and search provider Baidu, shares revenues from digital book purchases or subscriptions by their users with content providers like ChineseAll.

Since 2003 ChineseAll has been offering Chinese schools or educational organizations digital library software and digital books. Some local educational authorities have purchased ChineseAll’s software and content for schools.

ChineseAll also sells digital book rights to film and TV production companies, gaming developers and print book publishers.

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ChineseAll’s consumer-facing services include iKanshu.com, which sells digital book downloads, and 17K Novel (our translation).

Launched in 2006, 17K Novel is an online literature publishing business with a model widely adopted in China: users subscribe to or pay a fee for works produced by authors on the platform, and ChineseAll shares revenue with those authors. Apart from paid content, advertising is another revenue stream. 17K Novel had had 26 million registered users as of June 2014, according to the company’s filing, making it an attractive proposition for advertisers.

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ChineseAll has found its gross margins declining over the past three and a half years, due to competition driving book rights prices higher, larger percentages of revenues going to authors or copyright holders, and bigger marketing spends being necessary to acquire readers.

Its competitors include Shanda Cloudary, China Mobile’s own mobile book publishing business, Sungy Mobile, Tencent’s online literature platform, Baidu’s online literature platform, Amazon Kindle (the Kindle book store was operated by ChineseAll after Kindle entered China market in 2012), Xiaomi’s Duokan, Taobao’s digital book store, Douban, Tangcha, and so on.

Fortunately, the user base and digital reading market in China have been growing steadily. In 2013 50.1% of Chinese nationals aged from 17 to 70 had read via digital channels, such as the Web, mobile phone, e-reader, CDs, PDA, or MP4/MP5, a 9.8% increase from the previous year, according to the Chinese Academy of Press and Publication.

Source: The Chinese Academy of Press and Publication

Source: The Chinese Academy of Press and Publication

 

Editing by Mike Cormack (@bucketoftongues)