Se habla Chino? Chinese publishers hope digitization will facilitate exports

In addition to developing the domestic market, Chinese publishers would very much like to go abroad. The most high-profile attempts have been in magazines: This summer, China’s Southern Media Group tried to acquire Newsweek. The bid was rejected, but fears that Beijing would use such acquisitions to propagate its views abroad obscure the reality that the push to develop foreign markets for Chinese publications is increasingly profit-driven.
 
A source in state media said that it is important to distinguish between outward-facing Party mouthpieces and the rest of China’s publishing companies. "It’s not like, here’s a pile of cash, go create a propaganda system. For [publishers], money is the big issue … This is not part of the government soft power push."
 
It’s not just about immediate profits, however. "You can buy know-how and technology," said Torsten Weisse, founder of Weisse Publishing, who has worked in Chinese publishing since 2004. "[The Chinese] would love to buy Newsweek to learn the ins and outs of a major Western publication business."
 
Going out
 
At the same time, the presence of foreign publishing houses shopping for Chinese titles testifies to the demand for Chinese publications abroad. At the 2010 Beijing Book Fair, Chinese publishers inked 1,412 agreements on copyright export and cooperative publication with foreign houses.
 
At present, the bulk of the demand is from overseas Chinese, but the advent of digital distribution systems is set to facilitate transmission of Chinese culture – not just propaganda – to a wider international audience.
 
This opportunity is, in turn, attracting interest from overseas digital publishing service providers. After all, while Chinese publishers may have advantages – even monopolies – domestically, they have no presence in developed markets where readers will pay US$10 for an e-book.
 
David Burleigh, director of marketing for US-based digital content platform Overdrive, said his firm is already signing deals with Chinese publishers. "We’ve been in dialogue with many manufacturers here to help them enter Western markets, particularly with devices suitable for borrowing e-books from the library, which is a nice, hidden, potentially lucrative market."
 
Overdrive’s partners now include  Taipei-based aggregator ChineseAll, which represents around 300 Chinese publishers. Burleigh said that US markets on the American west coast, which have large ethnic Chinese populations, are particularly attractive export targets.   
 
However, China does not have a price advantage in this export sector. A common misunderstanding about digital publishing is its effect on cost structures. According to Jo Lusby, managing director of Penguin China (owned by media conglomerate Pearson; PLO.NYSE), printing and distribution costs only comprise some 10% of the total costs involved in producing a book. This leaves the costs of writing the work, layout, graphic design, editing and translation.
 
Skimping on these expenses is unlikely to win foreign readers in competitive content markets – but since these costs are fixed, any additional revenue from digital exports helps.