Stephen Miles, executive vice-president of overseas operations for Toronto-based Harlequin Enterprises travels one week out of every month, visiting two or three countries on each trip. “When I watch the movie Lost In Translation, I tell my kids, ‘That’s my job,'” says Miles. The task of exporting romance novels around the world involves preserving the characteristics of Harlequin’s product that make it universally appealing — the classic love story — and adapting aspects of the business that change depending on the market, such as how the content is formatted and distributed. But in spite of the need to strike this balance, Miles insists that it is not a complex business.
Arriving in Japan, Miles says, it didn’t take a rocket scientist to realize Torstar-owned Harlequin needed to change its format to penetrate the Japanese market — more than 50% of adult fiction in Japan is read in a comic-book form called manga. Manga, which translates literally to “whimsical pictures,” is a Japanese genre of comics that is read by people of all ages. The 1990s anime TV series Sailor Moon became well-known in the West as an animated version of a modern romance manga by Naoko Takeuchi. According to a Tokyo-based research company, Impress R&D, the Japanese manga industry took in $380 million in revenue in the last fiscal year.
“If you go into a bookstore in Japan — and they’re on every street corner — half the store is comics,” says Miles. “It made sense for us to publish our books in comic form.”
But Harlequin decided to stick with what they know — the text business — and license their stories to a Japanese comic-book publisher to see what they could learn from the market. Its partner, Ohzora Publishing, took English-language Harlequin romances, had them translated into Japanese and contracted an artist to illustrate them in manga style.
The manga business was successful under Ohzora, and in 2006 when Harlequin launched e-books in Japan, the decision followed naturally to distribute digital comics as well. According to Miles, Harlequin took over publishing manga because Ohzora was unwilling to invest in and grow the business.
Harlequin saw a big opportunity in digital manga, and was quick to recognize that mobile phone technology was an important trend in Japan, where data transfer is fast and cheap, thanks to a one gigabyte-per-second fibre-based network. The transfer of manga illustrations is fairly data-intensive, but because the mobile Internet is so advanced in Japan, comics can be read easily on a cellphone. Additionally, Japanese characters make it possible to read more text on a small screen than other languages. To facilitate this new way of distributing content, Harlequin partnered with SoftBank Creative, the third-largest mobile company in Japan.
Today, Japan is the largest market in Harlequin’s overseas business. Digital manga sales were more than $10 million in 2009, up more than 100% from 2008. Nearly all of these sales were in Japan, but according to Miles there is a large market for digital manga all over Asia. Harlequin is expanding its business with its partner SoftBank — last year they moved into Korea, and currently they are working on expanding in China. This year they will tackle Taiwan, France and the U.S.
The potential for growth is not as big in western countries, where manga is, at most, a niche market. Harlequin is focusing on growing its e-books business in the West, where mobile phone technology is less advanced and e-readers are becoming more popular. Presently, it is launching its electronic front list in the United Kingdom, France and Australia.
Although Harlequin has been quick to adapt to different markets and changes in distribution models, the main reason the company has been successful is the romance novel’s enduring appeal to women. Harlequin is the only publisher that targets women exclusively, which Miles says enables it to do highly focused research. “We know a lot about our customers,” he says. Sticking to their core business also enabled it to fare better than other fiction publishers during the recession. It provides women with an inexpensive escape. “Boy meets girl and they stay in love forever,” says Miles. “It’s a simple model but it works.” And the most important element in the romance novel business, of course, is “they’re all really happy endings.”