Questioning profundity of digitalization of book: foresight study for Russian book sector

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Questioning profundity of digitalization of
book foresight study for Russian book sector

• Ilya Kiriya, PhD., professor
• National Research University
• Higher School of Economics
• ikiria_at_hse.ru

EMMA, Bournemouth University, June 2013
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PARAMETERS OF SURVEY

• Survey was made by Laboratory for media research
  Faculty of media communications HSE in fall 2012
  and has been financed by Federal Agency of press
  and mass communications
• Main methods
• Deep interviews with 12 experts from industry
  (publishers, distributors, associations)
• Expert survey validating tendencies (trends) on
  scales of probability, importance for industry,
  positiveness, identifying drivers and
  uncertainties
• Building scenarios
• Basic trends was taken from long-term foresight
  study and road map made by HSE for whole sector
  of media, ICT and Communication until 2030
• Method of road maps

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MOST IMPORTANT TRENDS
Technological
Economical
Transforming business models
Terminal devices
Networks of data exchange
Growth of aggregation
Fail of mediators (editorial function)
Storage capacity
Constructed on different theoretical bases and
forecasts Webb, Castells, Fagerjord Storsul,
projects of Georgia Tech, OCAD University, IBM
and Ifra
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TERMINAL DEVICES

• Convergence mass communication functions and
  interactive exchange, mass-self communication
  (Castells)
• Growing computational capacity of devices
• Interactivity
• Development of fixed home devices toward "added
  reality" and "virtual reality" (penetrating 3D,
  4D, 5D in home)

Ofcom
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NETWORKS OF DATA EXCHANGE
Forecast of traffic evolution in mobile networks

• Growing up of broadband capacity
• Total connectivity of devices
• Total coverage of networks (permanent access from
  mobile devices)

CISCO
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STORAGE CAPACITIES
Volume of digital universe (eB))

• Growing information volume
• Growing of storage capacities

Broadcasted and stored content (eB)
IDC

• Capacity to store all broadcasted information
• Access to content instead property for content

IJOC
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TRANSFORMING BUSINESS MODELS

• Redistribution of budgets between business-models
  of consumer paid and third part paid models
• Transforming of advertising formats and
  redistribution of ad budgets
• New genres of advertising

Content makers Content makers
Professional Non professional
Source of income Consumer Anti-advertising Prosumer
Source of income Third part paid (advertising) Media chaos Branded World
WAN/Ifra
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GROWING IMPORTANCE OF AGGREGATION
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???????? ???????? ???????????????? ???????????????? ???????????????? ???????????? ????? ??????? ???????????? ??????????????? ? ???????????????? ????? ???????? (??????? ??? ??????????) ?????????, ??? ?????????? ????? ???????????? ??????????? Hyper Syndication of content (??????????????? ????????) ??????? ??????????? ??????? ???????????, ??????? ??????? ??????? ????? ?? ???????????????? ??????? ? ????????????? ?????? ? ????

• The rise of access incite consumer to choose
• Aggregators and searching machines are main
  "enter points" for consumer
• Big volumes stimulate aggregators to make a
  dumping during buying rights
• Advertising is moving towards aggregators

IBM
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FAIL OF MEDIATORS

• Self publication and self distribution is
  starting to dominate within Internet
• Self publication in music, publishing business

UGC 1234 eB
Professionally produced content 1234 eB
1000 eB
American Internet users making their own
content
IDC

• Growth of popularity of personal blogs and
  attiring advertisers

E-marketer
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MAIN TRENDS FOR BOOK PUBLISHERS
Trends Trends within publishing industry
Technological Technological
Terminal devices Adaptation book formats to new kind of devices
Terminal devices Decreasing of demand on printed books
Terminal devices Decreasing reading practice
Networks of data transfer Decreasing reading practice
  Increasing share of online books
Increasing of storage capacities Pirated book distribution
Economic Economic
Transformation of business models Using advertising based model for book sector
Increasing of aggregation Using advertising based model for book sector
Fail of mediators Increasing share for self-published books
Fail of mediators Moving distributors toward aggregation model
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PROFUNDITY OF CHANGES

• Main question - what the profundity of changes
  will be? Case of music and newspaper market.

Revenues of American editors of music and
newspapers by platforms (bill. USD)
Census Bureau
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EVALUATION OF MAIN MODELS
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EVALUATION OF RISKS
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RISKS AND TENDENCIES
Most favorable influence
Appearing Internet-stores and electronic means
for selling
Increasing Internet penetration rate
Developing e-paper
Developing terminal devices for reading (readers)
Appearance of self-publication platforms
Decreasing interest toward reading practices in
favor of other platforms
Most significant tendencies
Most insignificant tendencies
Appearance of online distribution models like
Google books
Pirated distribution of books
Most unfavorable influence
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SET OF SCENARIOS
Risk 1 (piracy level) Risk 2 (dynamics of decreasing reading practice) Favorable driver (high Internet penetration rate) Non favorable driver (moderate penetration rate)
High level of piracy High decrease in reading practice Neutral scenarios n 3,7 Non favorable scenarios n 1, 5
Low level of piracy Moderate and low decrease in reading practice Positive scenarios n 4, 8 Neutral scenarios n 2, 6
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DESCRIPTION OF SCENARIOS
Scenario Level of piracy ( from all e book market) Book reading level ( of people reading at least a book each year) Annual growth () Internet penetration rate () Share of ebook in publishing market ()
1 70-80 40 5 60 10
2 45-50 40 10 60 15
3 70-80 50 15 80 20
4 45-50 50 20 80 25
5 60-70 30 2 60 15
6 55-60 60 15 60 20
7 55-60 30 10 80 15
8 55-60 60 30 80 25
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CONCLUSION

• As we could find respondents are estimating
  e-book penetration quite low till 2025. We could
  say that they are skeptical about big profundity
  of book digitalization.
• At the same time they are much more positive when
  it concerns western book and publishing market
  where the share of digital publishing and passing
  toward self-publishing model is rated much more
  higher by respondents.