The Digital
Publishing Business
Model of China
The London Book Fair 2013
Digital Minds Conference
Lisa Liping Zhang
Director, Intl. Dept., Cloudary Corp.
Overview of China Book Market
in 2012
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Print books sales: RMB46 billion (US$7.3 billion)
Sales by online orders: RMB12-13 billion (US$2 billion)
Kinds of new different titles sold: 200,000
Total kinds of titles sold: 1.25 million
Growth of annual sales by traditional bookstores: -1.05%
Online orders (e-commerce):
 RMB4-5 billion in 2010
 RMB8-9 billion in 2011
 RMB12-13 billion in 2012
Overview of China Book Market
in 2012
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Large or strong publishers: 15% sales are
from online orders
Middle performance publishers: 30% sales
from online orders
Small publishers: 50% sales from online
orders
Mostly due to the online orders, total sales
of print books increased by 8% to 10%
P-Book vs E-Book
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E-book industry has taken a different route in
China from the rest of the world
Direct publishing/Self publishing is taking the lead
in the digital publishing transition
E-Book sales players: Cloudary, Hanvon, Chineseall, Dangdang, 360buy, taobao, Suning, Amazon,
douban, 3 mobile phone operators, etc.
So far, no platform has established yet in China as
what Amazon has done in the rest of the world
Online literature is a unique term from China
User Analysis of Online Literature in China
203 million of online literature users in China
more than the number of E-commerce
2011.12—2012.6 Utilization Ratio of Different
Internet Applications in China
Online Literature Users in China1 and Market Size2
(RMB Million)
2011-2014E Compound Annual Growth Rate of Online
Literature Market Size:
72.3%
469
359
265
201
3,070
1,920
1,060
600
2011
Paid Reading (Online)
Instant Messaging
Search Engines
Online Music
Online News
Online Videos
Online Gaming
Blogs / Spaces
Weibo (Twitter)
Emails
Social Network Websites
User Size
（Million）
415.098
407.401
385.851
366.867
325.305
324.279
318.635
249.88
245.775
244.236
Online Literature
202.675
39.50%
Online Shopping
Online Paying
Online Banking
Forums / BBS
Group-go
Travel Bookings
Online Stock Trading
193.952
166.758
166.244
144.694
64.651
42.074
40.022
37.80%
32.50%
32.40%
28.20%
12.60%
8.20%
7.80%
Application
2012E
Mobile Reading
1.Data based on iresearch
2.Data based on iresearch
3.Baidu search ranking (2011)
4.Baidu search ranking (2011)
5.As on 31 Dec 2011
2013E
Advertising
2014E
Copyright Authorization
Total
Utilization Ratio
80.90%
79.40%
75.20%
71.50%
63.40%
63.20%
62.10%
48.70%
47.90%
47.60%
Data based on the 30th CNNIC China Internet Growth Statistics Report（2012.7）
Mobile Internet
Carrier Operators
 3 mobile phone companies:
China Mobile, China Unicom,
China Telecom
 China Mobile is the largest one
Mobile Devices and Apps
 The cloud bookstore and Client Apps
in Android and Apple Apps are
widely adopted in China.
 Reading devices: Smart phones, eReaders like Bambook, Kindle, and
other local brands.
WAP
 WAP sites are also widely
available in China.
* Data based on China Internet Growth Report
Mobile Internet Users in China*
(Million)
2008-2011 Compound Annual Growth Rate of
Mobile Internet Users:
44.5%
Print Book Publishing
The first 5 private book publishers in China have increased
their market shares
Revenue of the first 5 private book
publishers in China2
2009-2011 Revenue Compound
Growth Rate
31%
20%
69%
80%
2009
2011
Cloudary
The other 4 privately operated book publishers
1.
2.
Data based on OpenBook report
Data based on OpenBook report
 Published 2 of the 3 most popular literary works in
20101
 The most popular book that had been published by
private publishers in 20111
(RMB million)
28.3%
 Based on retail sales in 2011, Cloudary is the largest
private book publisher in China1
Case Analysis: Cloudary
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The LARGEST community driven online literature platform in China
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72.1% market share of Chinese online literature market1
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Parent company: Shanda Interactive Entertainment Ltd. (SNDA)
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Founded in July 2008
1.6 Million
Writers2
1.
2.
3.
4.
6 Million
Titles2
66.9
Million
Average Users
per Month3
68 Million
Mobile
Data based on iresearch《China online literature industry growth analysis 2011-2012》
As on 31 Dec 2011
Data based on iresearch 2011 Monthly user access statistics
Data based on China Mobile Reading Base 2011 Independent Access Users
Readers4
￥700 Million
Revenue in 2011
128%
09-11 Yearly Revenue
Compound Growth
Rate
Cloudary Platform
Our Community-Generated Content
Content from Partners
Community-driven platform for storage and discovery, analysis / recommendation,
and distribution of content
Multiple Revenue Channels
Online Paid
Reading
Mobile
Reading
Online
Advertising
Copyright
Licensing
Offline
Publishing
Analysis of the Largest
Direct Publishing Website
Qidian (www.qidian.com)
Largest online original Chinese literature website
Mainly focuses on fantasy, sci-fi, martial-arts & military
genres
Targets male readers
 The top 10 novels have collectively got 680 million page
views and 1640 comments
Analysis of Another
Direct Publishing Website
Hongxiu (www.hongxiu.com)
Mainly focuses on feminine literature
Especially influential in romance & career genres
Targets female readers
Writers are also mostly women
Business Model and Payment Tools
Using Shanda virtual currency
Supporting different payment tools:
Alipay, PayPal
Online banking (international bank cards supported)
Mobile phone bill/top up cards
Etc.
Payment System
Micro-payment policy:
￥0.05 per 1,000 characters (Non-members)
￥0.04 per 1,000 characters (Basic members)
￥0.03 per 1,000 characters (Intermediate members)
￥0.02 per 1,000 characters (Supreme members)
(Membership requirements vary slightly among different websites)
Payment System
Other pricing policies:
Monthly subscription:
Complete eBook purchase:
(available in Hongxiu, Xiaoxiang Shuyuan
and Jinjiang)
(available for some completed books)
1 Month
￥15.00
3 Months
￥36.00
6 Months
￥63.00
12 Months
￥108.00
24 Months
￥180.00
(Subscribers may read all chapters of the
‘monthly subscribed books’. Prices vary
slightly among different websites.)
From ￥1.00 to ￥10.00, depending on the
titles
Webpage Snapshot (Yuncheng Homepage)
Categories
Supports all
types of
reading
devices
Micro-payment
Complete eBook purchase
Business in Adaptation Rights
In 2011，Cloudary has sold 651 copyrighted works.
Nearly 100 movies/TV series adapted from Cloudary works are being made or
launched
Among the 10 most popular TV episodes in 2011, 4 are related to online literature.
Among the adapted online original literary works, most of them are from Cloudary1
Box Office Revenue of Metropolitan
Cinemas in China2
(RMB Billion)
2009-2012E Yearly
Revenue
Compound Growth
Rate:
50.2%
1. Data based on iresearch 2. Data based on Yi En Advisory 3. Data based on Screen Digest 4. Data based on IDC
Authorization & Advertisements Revenue
of Television Market in China3
(RMB Billion)
2010-2015E Yearly Revenue
Compound Growth Rate of TV:
13.3%
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