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Amazon Considering Japanese E-Books for Kindle, Kodansha Says

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April 22 (Bloomberg) -- Amazon.com Inc. held talks with Kodansha Ltd. to provide electronic versions of Japanese-language books for its Kindle digital reader, Yoshinobu Noma, chief operating officer of Japan’s biggest publisher, said.

The online retailer, based in Seattle, has held preliminary talks several times since the beginning of the year with closely held Kodansha, Noma said in an interview. “They haven’t decided yet if they are doing the same business in Japan, but they’re considering it.”

Amazon.com doesn’t currently offer the Kindle in Japan, a market where e-book sales are estimated by Nomura Holdings Inc. to be more than four times those of the U.S. Buyers are redirected to the Amazon’s U.S. site since no Japanese-language titles are available. Japanese sales of paper books and magazines fell 4.1 percent to a 21-year low in 2009, shrinking 27 percent since its 1996 peak, according to the Research Institute for Publications.

“As of now, I don’t think Amazon will succeed in Japan,” said Jun Hasebe, a Tokyo-based analyst at Daiwa Securities Group Inc. “Japanese publishers are wary because they are afraid of making less money from e-books,” after the precedent of declining earnings for the country’s music labels once people started buying digital content from Apple Inc.’s iTunes online music store, he said.

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.

E-Readers Scrapped

The Japanese e-book market -- worth 46.4 billion yen ($505 million) in the 12 months ended March 31, 2009, is dominated by readership of comics on mobile phones, according to Nomura. Sony Corp. and Panasonic Corp., Japan’s two biggest consumer electronics makers, scrapped their e-reader business in the country in 2007 and 2008 respectively.

“We are exchanging opinions about Kindles with many publishing companies,” said Misao Konishi, a Tokyo-based spokeswoman for Amazon.com. She declined to name companies.

The maker of the Kindle and Barnes & Noble Inc., which offers the Nook e-reader, are giving publishers control over pricing to stave off competition from Apple, three publishing officials said this month. More than 7 million iPads may be sold globally in the first year, according to researcher iSuppli Corp.

Apple, which launched its iPad tablet in the U.S. this month, hasn’t approached Kodansha about selling e-books for its touch-screen tablet computer, said Noma, 41, who is also chairman of the Electronic Book Publishers’ Association of Japan, a trade group started last month to coordinate publishers’ responses to the e-reader format.

To contact the reporter on this story: Chana Schoenberger in Tokyo at cschoenberg@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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