"China Digital and Mobile Publishing" served as the title of a public talk held at the Frankfurt Book Fair on Thursday.

With more than 1 billion potential readers, the Chinese market is not only one of the biggest in the world, but also a quickly developing one. In 2009 China saw its digital sector grows more than 40 percent and is predicted to keep growing at an annual rate of about 50 percent in the next few years.

China is a young market

Even now, the figures announced at the Frankfurt Book Fair are impressive.

At the end of 2009, about 100 million Chinese read e-books, with most of them under 25 years old. Currently more than 90 percent of Chinese publishing houses have digital publishing operations, offering more than 1 million titles in digital format in August 2010.

During the public talk, Zhou Hongli, chief copyright officer of Shanda Literature, China's Largest e-book publisher, announced that his company had just now created "Library in Cloud," a platform for digital publishing which currently counts 3 million books.

According to the General Administration of Press and Publication of China, the annual production value of digital publications in China registered nearly 80 billion Chinese yuan (about 12 billion U.S. dollars) in 2009, surpassing traditional publications for the first time. But this figure also includes online gaming, advertising and other sectors. E-books themselves represent only 1 percent at the moment.

Many people read e-books on mobile phones. Currently more than 100 million people use their phones with this purpose, as most of them are young and have less income.

Only about 1 percent of the readers actually use designated e-book reading devices. In comparison to the number of readers, the sales figures of electronic e-book readers therefore are rather small: about 500,000 e-readers were sold in 2009, for 2010 an estimated 3 million e-readers will be sold all over the country.

Open issues

A lot of discussions as to how to create an effective business model to make readers pay for the content are currently going on in the industry. One of the successful players is Shanda Literature.

"We cover the complete chain of content utilization. Many online bestsellers are printed as paper books as well, because digital and traditional readers do not overlap," said Zhou.

But he was not so satisfied with the dominant distribution channels. "The mobile phone companies take a lion's share of the profits," he added.

Also, like the U.S. and the European markets, the Chinese market has not yet agreed on a standard format, which causes problems to both readers and publishing houses, as most of them are not compatible, and there is no e-reader on the market that would be able to read all of them.

Currently there are over 20 different types of e-book formats in China, which means that readers may have to use different softwares to read e-books if they buy them at different sources.

For the publishers this also causes problems, as they have to guess which software or format will be the most successful.

According to Zhou, sometimes this just means the companies take their own initiatives. "Shanda has developed its own format together with Nokia, currently a leading mobile phone company in China. Nokia has the software for our format already installed," he said.