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| Kyobo Bookstore's pricing policy for its e-book service, Sam, is angering publishers, who accuse the retailer of setting off a disruptive price competition. / Korea Times |
By Kim Tong-hyung
There were times when electronic book readers and touch-screen devices like the iPad were touted as the saviors of the flagging publishing industry. But something went terribly wrong with the plot and now publishers are found describing e-books as killers rather than manna from heaven.
Unlike the previous experiences with journalism, music and films, industries which were irrevocably reshaped by the digital revolution, it seems technology itself isn't as much a disruptive force for publishing as rapid changes to the market's economic structure.
Through a wave of consolidation that was accompanied with the bad economy in the past decade, the market is now dominated by mega retail chains like Kyobo Bookstore and a few large corporations that control the most influential publishing houses. Diversity was hurt as small publishers were driven out or marginalized, an intellectual vacuum epitomized by the slew of self-help books that are often worse than useless.
What the introduction of e-books did was to trigger a battle between big retailers and publishers over who gets the larger control over the content value chain in books. So far, the fight appears to be overwhelmingly in favor of the retailers.
The lightning rod of the conflict has been ''Sam,'' a new e-book service launched by Kyobo earlier this year, accessible to the buyers of the company's own e-book reader.
Sam users could download five e-books for 15,000 won, seven for 21,000 won and 12 for 32,000 won, much cheaper than what they would pay for the physical versions of the books. It also provides a ''rental'' service that allows users to read five books for six months at just 990 won.
Publishers went livid over Kyobo's pricing policy, which they feared would push them deeper into a financial spiral at a time when book readership was hitting new lows. Forced on the defense, Kyobo said the rental service would be a limited-time promotional offer and it planned to share its revenue from downloads with publishers.
However, Han Ki-ho, director of the Korean Publishing Marketing Research Institute, claims that Kyobo has already pushed the publishing industry into a price war that will eventually benefit nobody.
''Deciding to rent out a book at 200 won when it's paperback version is priced at 13,000 won is a graceless and ruthless marketing attempt that threatens the publishing market's ecosystem,'' he said.
''Korea's biggest problem is that the disappearance of the culture of reading. It's ridiculous to think that lowering prices alone will spark the sluggish growth of the e-book market and put retailers and publishers in a better place. This will only further hurt diversity and further fill up the market of low quality and opportunistic books.
''Low-price, high-volume policies didn't work for publishers in Japan and Italy in the past, while in Germany publishers benefited after the country went in a different direction and introduced a fixed-price system.''
Kyobo said its e-book sales reached some 14 billion won last year, less than 3 percent of total revenue. This year, the company expects Sam to attract 130,000 customers and generate 23 billion won in sales. After Kyobo launched Sam, other online bookstores such as Yes24 and Aladdin were quick to release low-price e-book packages.
Park Mi-hyang, an official of Kyobo, said the retailer will settle its conflict with publishers soon.
''The Sam service targets workers, students and women, and offers tailored recommendations by our advisors. Our primary goal is to increase the number of e-book readers by cutting prices to ultimately expand the market," she said.
A report from Statistics Korea last month showed that book consumption — measured by the sales of hardcovers, paperbacks and magazines — hit a new low last year with the average spending of households sinking below 20,000 won (about $18).
New books released by publishers decreased by a staggering 20 percent in 2012. The online purchases of books pulled back for the first time since the statistics agency started keeping track of electronic commerce activity in 2001.
The 19,026 won households spent on books per month last year represented a 7.5 percent drop for the previous year and a 28 percent decline from the 26,346 won measured in 2003, when the publishing industry was at its peak.
According to separate data from the Korean Publishers Association, publishers introduced 39,767 new books last year and printed and published 86.97 million copies. It was the first time since 2000 that less than 100 million copies of new books were published over a full year.
