How was Legimi created?
Mikołaj Małaczyński: Those are distant times. In 2009 we were a group of students passionate about technology and we met an investor, Speed Up Group fund, who was interested in possible cooperation. We wanted to do a project that would deal with aggregating press releases in the form of presentations on electronic paper. At the time, we also started working with a legal publisher who was looking for a tablet solution for their product, which was a database of legal code content. We made the leap to a simpler product.
At the same time, we benefited more, because it turned out that publishing houses are not very familiar with new technologies and we could be a good partner for them by implementing online bookstores for various entities, including Allegro, for which we created the “ebooksAllegro.pl” platform. In the meantime, we started to specialize in watermarked copy protection technology. These solutions began to sell abroad. We were operating in the B2B area, but we wanted to target our offer at retail clients and this is how Legimi came into being. That’s what our first 5 years looked like.
By 2020, you had sold over a million books. So why is there talk of low readership among Poles?
This is a good question. We still have a lot of competition from other media. The pandemic kept us at home and we used various forms of entertainment, but it is these, multimedia activities that absorb our attention much easier than a less interactive form, which is a book. A million titles sold is certainly fantastic news, first and foremost for the creators, as we settle with them on cover prices. We reject the notion that Legimi is a typical streaming service. Nevertheless, it is a small value on the market scale. Electronic books still have a long way to go. Above all, it would be good for them to get under the roof and start to be seen as an easily accessible solution.
For 2019. Nielsen reports that 100 million books were sold. E-books, are a small percentage of the market, about 5-7%. In categories like fantasy and crime fiction, we are already recording double-digit sales shares.
We are immersed in the picture culture for good, can reading come back into fashion?
I don’t think it’s necessary to oppose reading to the image culture. When it comes to reading, we are interested in storytelling, which is telling a story by reading or listening to an audiobook. We have this mix that we call synchrobook, which is a combination of audiobook and e-book, you can switch between one format and the other. The demand for storytelling has been constant since the time of Homer. So whether the narrative medium is text, or a form of listening, or a video version, it ends up being the same story. The video version is more engaging because it stimulates sight and hearing. But when it comes to choosing the content, in Legimi customers most often choose the text version, and in the second place the listening version. We have 80,000 items and there are more coming all the time.
Is Legimi present outside Poland?
Yes, we are present in Germany. Our activity is based on two areas: Legimi’s German version, and the Readfy app, a system we bought through acquisition. It is a similar application, but it works in the freemium model with ads.
It is a more complex market, mainly due to the presence of Amazon. There are more players from the international environment, but at the same time it is a much more absorbent market and people have more money, so the average price of a book is three times higher than in Poland. The reading rate is 80%.
What are disruptive innovations?
These are disruptive innovations, which disrupt the existing order of functioning of a certain area. When we started, the a la carte model was popular and derived mainly from the limitations of printed books. Consumers who were driven by price can now focus on content. These innovations are made de facto by consumers. Legimi operates on a customer development model. It is the clients who shape our products through their behavior, which we observe. And that, in a nutshell, is what disruptive innovation is all about.
What are you currently working on?
We are working on a recommendation system based on artificial intelligence with the support of NCBiR. The project involves analyzing the mine of data we have already collected over many years of operation and applying it to even better recommendations for the reader. There is an overabundance of books for the reader and it is impossible to read all the reviews and recommendations, so the recommendation system will be the thing that allows the reader to stay with us even longer. In practice, this will mean that with each book that is read, the system will be more and more accurate in suggesting books that will interest the reader, but it will also be able to suggest other categories that have not yet been visited.
Is the Polish reading market difficult when compared to the German one?
It would be difficult if it were disorganized. Award-winning books appear quickly in our country. The market is dynamic, modern, prolific, and open to innovation. The German market is also well-ordered, and I think both markets compare quite well to each other.
Book, e-book, or audiobook? What is the most common way you encounter reading?
I read any format. When it comes to content, I am a believer in non-fiction. I also have quite a few books in print because they didn’t make it to the electronic version.
What should we keep in mind when buying e-books?
A paper book can be sold on the secondary market, but an e-book can’t. This is a strange exception to copyright law, because in the case of a printed book, there is a concept of exhaustion of copyright, meaning that the person who bought the book can manage it as an owner, and in the case of an e-book, it is still a lease. In the case of an e-book, we are dealing with a lease, and the lessor has the casting vote on whether he or she agrees to further dissemination and in what fields of exploitation. These are very complicated issues and not many understand them.