originally published by Peter Schoppert on 23 September, 2013 - 08:44
Singapore’s publishers have been operating digital businesses for decades. Professional, academic and science, technology and medicine (STM) publishers were the first to take the plunge into digital, and have been providing book and journal content electronically to libraries and institutions around the world for at least the last 15 years. For all intents and purposes, the academic journal market is now an electronic one, with print copies a minor supplement to digital distribution. Educational publishers are moving beyond a long period of digital experimentation to now build sustainable businesses by delivering textbook and assessment content online. The trade or general consumer market is the last to be “going digital”, but even here those Singapore publishers who sell to export markets are finding digital to be a useful channel. Singapore’s domestic market for trade e-books, novels or narrative non-fiction for example, remains quite small, probably around 3 to 5% of the local print market.
The Professional, Academic and STM Markets
The globalisation and digitalisation trends in professional, academic and STM publishing have been playing out in Singapore for the past few decades, with two main results: 1) All of Singapore’s professional, academic and STM publishers are publishing or distributing their content through digital channels. In most areas—research journal publishing or legal publishing for example—digital channels are far more important than the equivalent print ones; and 2) there has been significant consolidation of publishers in these areas, and surviving players in Singapore’s competitive market are almost all global players (whether locally- or foreign-owned).
Publishing to the professions—legal, accounting, finance, medical, tax, et cetera—is dominated by global professional publishers like Lexis-Nexis, Thompson-Reuters, CCH-Wolter Kluwers and so on. Their Singapore units work to publish locally- and regionally-relevant content. Not only is content digital for these publishers, that content is delivered in innovative ways, often well-integrated with workflow management tools, so that busy professionals get the information they require together at the time and in the context that they need it.
Academy Publishing, a unit of the Singapore Law Academy, competes with the local offices of Reed Elsevier’s Lexis and Thompson-Reuters’ Sweet & Maxwell, publishing Singapore Law Reports and decisions (as well as important legal books and journals) in both print and electronic forms, on what its publisher describes as a “utility basis”, keeping the cost of essential information low for the many smaller firms in Singapore. But interestingly, Academy distributes much of its content electronically through Lexis, getting global reach and remaining relevant for the largest firms by doing so.
A number of the biggest scientific, technical and medical publishers have a presence in Singapore, often basing their Asian or even global HQ functions in Singapore. In the STM space, World Scientific is the only home-grown player who has established and defended a strong global position. World Scientific employs about half its staff of around 500 in Singapore, with the rest distributed between offices in the US, China, the UK and elsewhere. World Scientific has been publishing digitally for 15 years, and operates an internet platform for subscribers that integrates its e-book and journal content. Books can be purchased via subscription or on a title-by-title basis, and are generally priced slightly higher than print retail (as they can be simultaneously accessed by members of subscribing institutions).
Singapore’s two home-grown academic publishers, ISEAS Publications and NUS Press also publish electronically, and have done so for many years. NUS Press reports that 11% of its total revenue FY12 comes via electronic distribution of books and journals.
The Education Market
According to Singapore’s Infocomm Development Authority, 18 per cent of Singaporeans’ total weekly usage of the Internet was for educational purposes in 2010. The same surveys show that the youngest internet users, those between 7 and 14 years of age, use the internet both at home (97 per cent) and school (82 per cent), and spend the biggest chunk of their internet time (45 per cent) on educational use.
The use of infocomm technology in schools has been built up by Singapore’s Ministry of Education (MOE) over a series of deliberate 5-year plans, with the third planning period to end in 2014. While the initial plans were aimed at building the basic infrastructure of IT and IT support for teachers within schools, the ambitions of the third plan, launched in September 2008, are more closely linked to instructional outcomes and educational content. They are to:
- Strengthen competencies for self-directed learning, including teaching students how to deal with the surfeit of information available online;
- Tailor learning experiences according to the way that each student learns best. Here IT is seen as holding the potential to deepen the curriculum, and offer different instructional and assessment strategies for different students, depending on their learning styles;
- Encourage students to go deeper and advance their learning. The plan refers to providing students with access to advanced instructional materials as well as multimedia and tools to allow students to manipulate primary data;
- Enable students to learn anywhere – allowing greater flexibility in learning time and places, and potentially breaking beyond the confine of the classroom.
In order to reach these goals, MOE has said it needs to focus more on the ICT skills and mindsets of teachers, as well as to bring “ICT into the planning and design of lessons plans” and “work through implementation details of curriculum and assessment”. Via the Edvantage program (see below) SBPA members are partners in this instructional design and curriculum development process.
Education publishing markets
Education publishing can be broken roughly into three markets: 1) textbooks and related materials, selected by schools but usually purchased by parents; 2) supplementary materials and books for school libraries, purchased by schools; and 3) assessment books, refresher materials and other educational material purchased by parents. Most of the digital publishing activity of SBPA members has concentrated in the first and third markets.
The Digital Textbook
The growth in importance of electronic instructional materials can be seen as another example of the broad trend of embedding publishing content into workflow systems. Textbook content is migrating to and has become increasingly integrated into Learning Management Systems (LMS), the IT systems schools use to coordinate work between teachers and students (and increasingly between students in group work as well). Teachers can use this integration to do more frequent and more sensitive assessments of their students’ progress, not just as measured in quizzes and other obvious assessments, but also in usage data from the system. Increasingly the buzz is around tailoring learning materials to individual students’ learning styles. With more and more data captured inside an LMS, this sort of integration and personalisation becomes possible. The MOE has accelerated this process by de-emphasising the importance of the textbook, at least in some areas, in favour of materials selected by the Ministry and individual teachers (for example in 2010 it announced that there would be no textbook for English in Primary levels 1-4).
Thus it should be no surprise that two of Singapore’s leading publishers have invested in Learning Management Systems (LMS) for schools. There are three authorized LMS vendors in Singapore system of more than 400 schools, Marshall Cavendish Online, Ask&Learn (a spin-off from two local tertiary institutions, now owned by Indian services group Educomp Solutions Ltd.) and APC Computer Training and Consultancy, in which local listed publisher Popular Books has a 25 per cent shareholding. MC Online has a dominant market share in primary schools and Ask&Learn holds a similar position among secondary schools. APC Computer Training and Consultancy is a smaller player, supporting the Moodle open-source learning management system alternative.
The Ministry of Education sets the high level specifications and service levels for the LMS, however individual LMS contracts are made directly with schools. This is where publishing content comes into the equation, as the vendors bundle content as one way to win contracts.
Industry players estimate that around one third (or S$ 10) of the per student/per year price of learning management systems can be attributed to the content delivered through the LMS, but as two of the leading LMS providers (MC Online and APC/Popular) have access to related content through their sister publishing companies, these estimates can be rough at best. In addition to content from Popular, in 2010 APC announced that it had licensed content from the Global Grid for Learning (which bundles material from some 150 international publishers, including SBPA member Cambridge University Press).
Other companies, including some traditional book publishers, offer online content direct to schools, in addition to any approved LMS vendor relationships the schools might have. Public information on successful tenders for these services shows prices of around S$17 per student per year for secondary level material, or roughly equivalent to the equivalent print materials pricing. But this online business is still at a fairly early stage. In such systems, costs are generally borne by the schools, but increasingly schools have also started to recommend online offerings in place of or as supplements to textbooks, to be purchased by parents.
The opportunity for Singapore publishers to innovate and build globally competitive education publishing offerings is an important one, leveraging on the good reputation of Singapore’s education system and the Singapore Math pedagogy in particular. Marshall Cavendish Education, for example, derives more than half its revenue from exports, developing curricular materials and selling books to overseas markets. Technology becomes another differentiator as Singapore educational publishing companies seek to build markets overseas.
The growth of the digital textbook does not necessary mean that students will be trading the heavy stacks of books in their school bags for an iPad any time soon. While in 2008 the MOE announced that it will study how “to put computing power directly in the hands of every learner, be it a low-cost laptop for every child or a digital PDA in each pair of hands”, as of the writing of this report no overall plan has been announced. Individual schools have experimented with such programs, and have commissioned or purchased apps that work like supplementary books, but the emphasis will likely remain on ensuring PC access at home for students, and letting parents drive the migration of supplementary education materials to tablets or smartphones.
The Digital Assessment Book
Perhaps the most competitive and entrepreneurial segment in Singapore’s publishing industry is made up of those companies providing assessment books sold to parents. Singaporean parents have a big appetite for materials aimed at supporting their children’s performance on standardized exams. Workbooks, assessment books and the famous “10-year series” of exam papers with model answers are a mainstay of bookshops in Singapore’s heartlands, and can be seen for sale in night markets. This segment accounts for some 20% of the overall education market in Singapore. The dominant player is Popular’s Educational Publishing House, with nearly 3000 titles in print across primary and secondary school levels. Language enrichment is a particular area of focus, given the high level of skill the system demands in both English and mother tongue.
With the support of Singtel, in 2012 Popular launched an online portal for delivery and sale of digital assessment materials, signing up a number of the independent publishers onto this platform. As well as delivery via PCs, the Go-Easel platform delivers assessment materials, using an in-app purchase model, to tablets using Android and iOS. Marshall Cavendish Education offers a smaller similar offering in collaboration with local broadcaster, Mediacorp. New entrant Koobits is gaining traction very quickly in this market with an e-only offering to parents, adding a game-like element to assessment materials. (They also sell supplementary programs to schools and the LMS vendors.)
Developing the Digital Education Market
Supported by the Ministry of Education, Singapore’s Infocomm Development Authority (IDA) has designed the Edvantage program to lead adoption of technology in the classroom, and to bring together the efforts of publishers, technology companies and innovative start-ups. One element of the plan, launched in 2008, was to enrol five per cent of Singapore’s 355 primary and secondary schools into a FutureSchools@ Singapore, a pilot programme to research, develop, lead and test new technology-enabled educational offerings. These offerings are supported with grants via Singapore's National Research Foundation. By April 2011, eight schools had signed up. These pilot programmes are designed by individual schools and delivered by a consortium of partners, typically made up of major technology companies and at least one publishing partner. Civica, Marshall Cavendish Online, Pearson Education and more specialized local players like SkyMedia (online assessments) and Amdon (educational games) participated in the first eight programs. Participating schools and partners are expected to treat these programs as R&D efforts, and schools are encouraged to publish the results of their efforts. Funding typically covers 50 per cent of direct costs of the programs. Given the potential for Singapore’s education publishers to grow their export businesses, such cooperative R&D projects are a useful tool to help develop the industry.
The Trade or General Market for e-Books
When most people think of e-books, they think of Amazon’s Kindle and erotic novels and other bestsellers delivered to dedicated e-reading devices, (as well as to tablet computers and smartphones). This sort of e-book business has been transformative in the US (with around a 20-35% share of the trade book market), the United Kingdom and now even in Australia (a market that has many structural similarities to Singapore’s). But e-books have been slow to take off as a business here, and Singapore’s publishers have yet to realize much revenue from the local e-book market. The major international players, Amazon, Apple, Kobo, Barnes & Noble, Google, have not set up shop in Singapore (at the time of this writing), and their catalogs are unavailable to Singapore readers (Kobo is an exception). But all of these do have a local customer base they serve from offshore. Singapore has had four credible local players launch e-book offerings, but two closed shop within a year of launch and the others remain very small.
The “offshore” English-language e-book business is impossible to quantify, but let us at least attempt to survey it. For one thing, there is an expatriate market of readers who access e-books via accounts they established with Amazon or others in their home countries (including India). BarnesandNoble.com receives some 15,000 unique visitors from Singapore every week . Secondly, at least one player, Kobo, does accept Singapore-domiciled credit cards and sells e-books to Singaporeans, even though it does no offline marketing and has no business presence in Singapore. Thirdly, entrepreneurial local companies have found ways to offer Kindles (and other e-readers) directly to Singaporeans. (Amazon itself started shipping Kindles to Singapore customers in mid-June 2013, but its catalog of Kindle books and singles remains unavailable as of this writing.) Other e-readers can be found on sale in Singapore’s electronics shops, and so-called digital concierge companies help overcome the territory restrictions, purchasing gift cards in the US on behalf of their local customers for example. Singapore’s technology press has been quick to inform readers how to take advantage of these alternatives (even if it means buyers plan to violate the user agreements they sign). There is enough business taking place in this way that some of these companies have advertised Kindles for sale in the daily newspapers.
We do have some statistics on Singapore’s e-reading library market. Singapore’s national library system offers Singapore readers English-language epubs, pdfs and audio books via US vendor Overdrive, among others. (Around 100,000 Chinese-language titles are offered via Apabi, a Chinese company). Usage is strong and growing quickly, from 3.9m downloads in the year ended March 31, 2011 to 4.9m downloads a year later. To provide some context, the library has around 2m registered members, and reports some 33m total loans (presumably including print and electronic loans). That puts e-book lending at around 16% of the total. The NLB announced that it had increased its holdings of e-books by 820,000 copies in FY 11/12 in order to meet this burgeoning demand.
And then of course there’s piracy. Partially because they are so tech savvy, and yet shut out of digital distribution of popular global content by the territory arrangements of broadcasters and film companies (and Singapore’s censorship rules), nearly half of Singapore’s internet users frequent torrent sites (for peer-to-peer distribution of large files, typically video). On such sites, e-book bundles of “the top 25 NYT fiction bestsellers” (and similar packages) can be found featured on the front page. As one new iPad owner replied when I asked him how he planned to read e-books on his new device, “a friend gave me a collection of 1000 recent books in a thumb drive, so I don’t think I’ll be visiting the iBookstore any time soon”. Just a single anecdote of course, but while there’s no doubt that piracy is a significant factor in Singapore, it would be very hasty to come to further conclusions without harder data. It is difficult to know if reading pirate e-books replaces sales or simply makes books available to a new group of readers, those will only read if the price point is “free”.
It would be rash to say that Singaporean readers’ easy access to pirated material is what is limiting the commercial market. Evidence from digital consumer behaviour around the world suggests that the reverse is true: piracy grows when consumers are denied easy, convenient and legitimate access to digital materials (at the right price points).
So why has Singapore's e-book market evolved in this particular way?
Singapore has suffered from under-investment in the e-reading market. The local players have not created a deep enough eco-system to kickstart the market, and the larger global players have not yet invested in locally-based operations. (From their perspective one must consider the opportunity cost of launching an e-books store in Singapore versus, for example, Brazil or India.)
Changing reading habits is no simple matter. The US market model, with front-list book titles being published in e-editions, at a discount from print prices, downloaded to dedicated devices, pulls together several elements to work together in a complex ecosystem. None of Singapore’s local e-retailers has been able to replicate the breadth of offerings that we see in the US system, and crucially perhaps, none chose to launch a dedicated e-reading device.
Some frustrated customers, eager for the latest gadgets and habituated by the tech media to valourise the US market, have blamed Singapore’s publishers for somehow blocking the entry of the larger e-retailers. This couldn’t be further from the truth; Singapore’s publishers welcome all credible e-retailers and have placed no content restrictions on their books. But it is fair to say that the decision to invest in e-books is not a simple one for local trade publishers.
Some Singapore general publishers began digitising their books for the Kindle and other e-readers up to three years ago or so, targeting export markets. Monsoon Books publishes Asia-related fiction and non-fiction and found that e-books represented a way to get greater speed to market and to lower financial risk. In late 2012, Publisher Phil Tatham reported that 65% of his sales to the US and UK market were coming via e-books. "We have never relied on sales in our home territory of Singapore and have always targeted books for the international market. With e-books we are able to reach more markets in a shorter time…We are optimistic about e-book sales and are slowly increasing our total output of titles and exploring new genres within our Asian focus." By 2012, with the launch of the first local e-retailers, most local trade publishers had begun to make their catalog available.
But especially for those publishers who rely more on the home market, the argument for launching an e-book program is hardly a no-brainer. One Singapore publisher of fiction told a group of his colleagues in late 2012 that he had agreed to digitise a best-selling series of books, in collaboration with one of the local retailers. The new title in the series sold nearly 10,000 print copies in three months, but e-book editions of the entire series sold less than 10 copies in the same period, despite a competent e-marketing campaign involving online video and promotions. The experience resonated with other publishers present at the same meeting. In addition to the delayed market takeoff, there are important barriers to setting up shop with the e-retailers (not least a 30% withholding tax that Singapore publishers must pay to the US for e-books sold directly to Amazon US).
In an attempt to overcome some of the chicken-and-egg issues involved here, the Media Development Authority and the SBPA introduced a grant scheme to encourage e-book conversions, and by May 2013, some 15 publishers had created .epub and .mobi editions of their books under the scheme.
Part 2 of 3 in the Report on Digital Publishing in Singapore, for the Singapore Book Publishers Association, 2013