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Well-bitten consumers shy of Japan’s disappearing e-books

by Akky Akimoto

Although it has now been surpassed by the United States, Japan was once the world’s largest market for e-books, thanks to the early success of the cellphone-content business. But in today’s competitive market, e-book sellers disappear every few months, leaving consumers to wonder whether the digital products they are buying are as permanent as paper books.

Japan has many platforms that sell e-books, run by distributors, cellphone carriers, electrical-goods retailers and so on. When you consider Japan’s literacy rate, long train-commute times that afford time for reading, and the huge size of the paper book market, e-books make for an attractive business proposition.

On May 29, Yamada Denki, Japan’s largest chain retailer of electrical appliances, announced that it will close its Yamada e-Book store at the end of July, two years after its launch in June 2012. The service is not especially popular anyway, but the announcement raised the hackles of users by saying that all their purchased e-books would become unavailable; that unused credit would not be refunded; and that Yamada Denki will eventually start another e-book store.

When other e-book stores have shut down in the past, they have usually offered their customers some form of compensation. For example, when convenience-store chain Lawson stopped the e-books part of its Elpaka Books service in February, users were offered Lawson store points to the value of their existing e-book purchases.

The bashing Yamada Denki received over its handling of its store closure led to a second announcement on the very same day, stating that it will refund unused store credit after all (as Yamada points rather than cash) and that it will allow users who migrate to the new store to keep their previously purchased e-books. Strangely, rather than admit to this being a change in policy, Yamada also apologized that the previous announcement had “caused customers to misunderstand.”

The fallout from such episodes is causing consumers to realize that they must take care when selecting which e-book store to buy from. Choosing an inferior service could mean an investment in hundreds of e-books that disappear overnight. Though many stores do not make their user numbers public, consumers will eventually migrate to the larger, more popular platforms.

Run by Japan’s largest online retail mall, Rakuten Kobo is certainly both large and popular. In fact, Rakuten’s e-book service not only competes domestically but has gone head-to-head against Amazon’s Kindle in the global market. However, Rakuten’s e-book record is not perfect. When Rakuten closed its previous e-book store, Raboo, after purchasing Canadian company Kobo in 2011, it did not offer to migrate users’ libraries of e-books to the new store. Instead, it offered a “refund” of 40 percent of the original value as Rakuten shopping points.

Because of that, users online appear to be swaying toward Kindle. Japanese consumers tend to prefer domestic companies when all other conditions are the same, but American brand Amazon has gained a good reputation in Japan because it has shown a long-term commitment to the market, even in the days before its business here became profitable. Amazon is clearly here to stay, and that is reassuring for consumers.

These days, most of the major digital music retailers, such as iTunes, sell audio files that — due to popular demand — do not contain copy-protection, which means that users can transfer the files to any device and listen to them, regardless of brand. This is not the case with e-books, which are usually digitally copy-protected and can only be read using applications distributed by that retailer. So if the service disappears, purchased files cannot be transferred to a different reader application. This protection is demanded by publishers and authors.

So long as the service remains active, customers can usually redownload their purchases at will. So if a user buys a new smartphone or tablet device, they can log into the store on that device and download their entire library without extra charge.

But another storm brewed online in May when it was discovered that digital manga by the publisher Shogakukan came with a disclaimer on certain e-book stores: “This e-book can only be redownloaded within five years of purchase.” In this case, if the user buys a new device five years after their purchase of a Shogakukan title, they will be unable to download it to the new device without purchasing it again. After critics pointed out that this is more akin to a very long rental service than a retail one, most of the stores quietly removed the clause from their conditions.

For those who are especially concerned about the longevity of their digital book collection, there is always jisui. Literally translating as “home cooking,” this piece of Net jargon refers to the practice of cutting and scanning paper books into a computer to create homemade digital editions. Sales in specialized cutters and scanners for jisui are on the rise.

A few years ago there were over 100 companies that offered a professional jisui service, whereby the customer could send books and pay a fee to have them cut up and digitized. But some of these companies were sued by a group of popular authors and publishers, who claimed that the practice violated their copyrights, and this was enough to scare most of the small startups away from the business.

Of course, one reason that consumers turn to such services in the first place is their uncertainty that e-books are a permanent purchase. If they can be conviced that the e-books they buy will be theirs to keep forever, regardless of unforeseen changes in technology and services, the sort of people who use jisui and indeed still buy physical books might buy more digital editions instead.

Akky Akimoto is an in-house pro blogger for Cybozu. His Twitter account @akky has around 120,000 followers.