japan1 BusinessWeek reports that Amazon is in talks with Japan’s largest publisher, Kodansha Ltd., to publish electronic versions of its books for a Japanese launch of the Kindle Reader.

As we mentioned a few weeks ago, the Japanese e-book market has been a tough nut for dedicated e-book reader vendors to crack—even Sony, whose name is synonymous with the Japanese electronics industry, no longer tries to sell its Sony Reader within its native shores.

Whereas in America reading on PDAs and cell phones was largely an early adopters’ sideline while it took a really good book-sized reader to make the market take off, it worked exactly the other way in Japan: the keitai shosetsu, or “cell phone novel,” became a new and popular literary form while nobody wanted to lug a book-sized tablet around.

Perhaps because Japanese words are made up of so many fewer characters than English words, the Japanese find cell-phone-sized reading much less cramped. Though the article does also note that cell phone manga are popular, too. Perhaps the Western comic producers who are wondering how to translate their comics to smaller iPhone screens could learn from the manga industry.

Regardless, Nomura Holdings estimates that e-book sales in Japan are four times higher than in America, so it’s clearly a market that Amazon would like to crack. But they are going to need to find a way to overcome Japanese reluctance to read on anything larger than a cell phone if they have any hope of doing that.

Another obstacle might be the differences between the Japanese and American publishing industries.

One thing that puzzles me about the article is this:

Unlike the U.S., Japanese bookstores don’t have the incentive to compete on price because they can return unsold books to publishers, according to Takayoshi Koike, a Tokyo-based analyst at Deutsche Bank AG. The system under which publishers set retail prices and prevent discounting, hinders the ability to offer electronic titles cheaper than paper books, Nomura said in a Nov. 17 report.

How does that work exactly? American bookstores can return unsold books to the publisher, too, but they do not seem to have that problem.

Funny thing: a “system under which publishers set retail prices and prevent discounting” sounds an awful lot like the agency pricing model that publishers have lately imposed on e-book retailers. But since that system is only in effect for e-books, it would seem we might avoid some of the disadvantages of the Japanese model.


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