Digital content is the exception in recession hit Russia

Its first day, first show. I find myself at meeting that’s part of the significantly expanded professional programme at the fair, which we’re told will focus on cross-media initiatives and the marketing of digital products. The aim of this ’business breakfast’ (participants make beelines for the food and beverages located conveniently at the entrance of Room Entente in Hall 4.C) is to provide an overview of the latest trends in the Russian Book market.

Vladimir Grigoriev and Alexander Royfe

Vladimir Grigoriev, Deputy Head of the Federal Agency for Press and Mass Communication, Moscow starts proceedings by tackling the subject with a sequence of statistics that flash up on a power point presentation. He’s concerned, more than anything else, with the effects of the economic crisis on Russian publishers. His compatriot Alexander Royfe, CEO of LitRes (an online library), follows this with a presentation that highlights the status of digital publishing in the country.

Vladimir says that the economic crisis has hit the industry tremendously. His educatedly estimated statistics show a consistent growth over the last several decades. The expected number of titles that will be published in 2009 is 135 million, up from 123.3 million in 2008. But the global recession has taken its toll. The turnover of Russia’s publishing industry is expected to drop to 2.8 billion USD in 2009, 20% lower than last year. Vladimir goes on to explain the vicious cycle afflicting the industry - lower demand leading to a decrease in sales, leading to non-payment, leading to a lack of fluid assets and so on.

You’d think that in post-Soviet free market Russia, there would be an increase in the diversity of voices in publishing. But the truth is that 12 major publishing houses - Eksmo, AST, and Prosveshenie are the top 3 - account for 40% of the market. Out of 5702 officially registered publishing houses only 1280 are active currently. But Vladimir remains optimistic about the resourcefulness of Russian publishing houses in tiding over hard times. The crux of their strategy is to get people to read again and various players in the industry - book sellers, distributors, and publishers - are doing their bit to aid the state’s literacy programmes.

“Mergers and acquisitions are the most talked about agenda presently. Many small companies are hoping that they will be acquired or else they’ll go out of business,” says Vladimir. “It’s not an attractive industry for big money right now.” But the loss in revenue is just half the story. Russia was once revered for its literature, producing masters of the written word like Dostevesky, Checkov, and Tolstoy in the late 19th and early 20th centuries. Vladmir was hard pressed to name contemporary authors who could compare and come out of their shadows (for that matter anyone would find it hard).

Through Vladimir’s talk his compatriot’s, Alexander’s, head kept sagging. Maybe he was pensively mulling over the state of affairs or else it was too early in the morning to listen to things he knows only too well. Either way it doesn’t add up. Alexander has more to feel cheerful about than most operating within the world of Russian publishing. Since Russia was the Guest of Honour at Frankfurt, back in 2003, the number of internet users in the country has grown 20 times. Russia now has an internet penetration rate of 33% (although they are concentrated in the big cities). This has meant that while the tradtional publishing industry has declined since last year, the market for digital content has grown two-fold since 2007. ”The recession has affected paper books but not e-books,” sums up Alexander.

LitRes, the company that Alexander runs, are by no means a pioneer in selling digital content, but it’s among the most successful. This is thanks to learning from the mistakes made by earlier enterprises such as publicent.ru and elkniga.ru. Rolfe believes that these ventures lost out because of rampant piracy, choosing to implement DRM, and limited payment options for consumers. LitRes, on the other hand, have enjoyed a good deal of success because of being able to deliver content across a variety of formats. They have adopted an indigenous format, Fb2 (based on XML) which can be parsed through a converter to deliver content in a variety of formats like txt, pdf, epub, mobi and others. They have the right to sell over 20,000 Russian titles in their ‘e-library’, and are now looking to source titles from foreign publishers as well.

Tags: digitisation, e-books, Russia

Posted in Book Fair, book industry