Chinese Publisher CITIC for the First Time Profited from Digital Books in 2013

CITIC Press is one of the first Chinese publishers to embrace digital. Its digital publishing business turned profitable in 2013, according to Huang Yikun, chief editor at digital publishing center of CITIC.

70% – 80% was, however, still from telecom operators. The three Chinese operators have been, since feature phone times, offering mobile reading content to their subscribers and share revenues with content providers. Not only traditional publishing companies like CITIC, online publishers or publishing platforms like Shanda’s Cloudary also have been receiving the majority of the revenues from the carriers.

The rest 20%-30% was from online publishing platforms. But the absolute number is ten times that in the previous year. CITIC expects the revenues from those platforms will growth three times in this year.

CITIC thinks the growth in digital publishing in China is appealing and the margins are way higher than the traditional publishing business. Mr. Huang also thinks the launch of Kindles and Kindle books in China a little more than one year ago, to some extent, boosted digital book sales.

One year after Kindle was launched in China, on Amazon China platform there were more than 60,000 digital books. Quite surprisingly Amazon China adopted a low cost strategy that Kindle books in Chinese were priced as low as at or below RMB 4.99 (about $0.8). Amazon China claimed it was profitable in late 2013.

Huang with CITIC projected that future opportunities for digital books will be in the mobile Internet. He pointed out that China may be the only country that users have been reading books on mobile phones. Thanks to this fact, almost all reading apps by Chinese developers, according to him, are well designed.

Apart from that, mobile reading, according to Huang, has become a must offering for big Chinese Internet companies to attract users — the others of the must include digital music, video and the like. So there will be players with huge user bases such as Alibaba and Tencent to help promote digital books.