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12 : The Global eBook Market: Current Conditions & Future Projections Pricing No regulation exists with regard to pricing. Although printed books are exempt from VAT, ebooks are subject to a 20 percent VAT surcharge, as are audiobooks, even when bundled with a printed book. This distinction is, as in other European countries, due to printed books being de ned as a product, while ebooks are considered to be a service for which the consumer acquires a license instead of merely making a purchase. Retail prices vary widely, from £1.50 to that of the printed book’s cover price. Bloomsbury also bene ted from the ourishing digital market and changes in consumer behavior. The com- pany reported an increase in ebook sales from $131,000 to $2.3 million in 2010, with ebooks sales running just under 10 percent of trade print sales. The success was mainly derived from Man Booker Prize–winning novelist Howard Jacobson and the international bestseller Eat, Pray, Love by Elizabeth Gilbert.

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12 : The Global eBook Market: Current Conditions & Future Projections Pricing No regulation exists with regard to pricing. Although printed books are exempt from VAT, ebooks are subject to a 20 percent VAT surcharge, as are audiobooks, even when bundled with a printed book. This distinction is, as in other European countries, due to printed books being de ned as a product, while ebooks are considered to be a service for which the consumer acquires a license instead of merely making a purchase. Retail prices vary widely, from £1.50 to that of the printed book’s cover price. Bloomsbury also bene ted from the ourishing digital market and changes in consumer behavior. The com- pany reported an increase in ebook sales from $131,000 to $2.3 million in 2010, with ebooks sales running just under 10 percent of trade print sales. The success was mainly derived from Man Booker Prize–winning novelist Howard Jacobson and the international bestseller Eat, Pray, Love by Elizabeth Gilbert.

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13 : The Global eBook Market: Current Conditions & Future Projections to devise new—or adjust old—business models, and to develop new organizational models. The PWC outlook highlights China, as it overtook Germany in 2011 and the UK in 2009, becoming the world’s third-largest entertainment and media market, after the US and Japan. With regard to publishing, China has arguably become the second-largest market, after the US, by 2011, overtaking Germany, which is ahead of Japan and the UK in that sector. A broad selection of emerging markets and even developing countries has been covered in the report “Digital publishing in developing countries,” authored by Octavio Kulesz and released in October 2010. The research, which is freely available for download in several formats and languages, focuses notably on Latin America, Sub-Saharan Africa, the Arab World, Russia, India, and China, and documents relevant local actors and initiatives across those continents, with detailed references, providing a hugely valuable resource, even as market details evolve quickly. A detailed account on how select ebook markets evolve was started by Bowker in May 2012 (see the press release with key ndings here). The Global eBook Monitor (GeM) is based on consumer surveys in 10 countries: Australia, Brazil, France, Germany, India, Japan, South Korea, Spain, the UK, and the US. It tracks ebook adoption and consumer attitudes. India and Australia, together with the UK and the US, are seen as leaders in ebook adoption, while consumers in France and Japan were the least likely to have purchased an ebook, at 5 and 8 percent, respectively. GeM has been widely pre- sented and discussed at major trade events and book fairs, and will be updated and extended to additional markets on a regular basis. Global Mapping Perspectives With respect to the ongoing globalization of the book publishing industry, few surveys have been published with a broad international approach. While professional and STM (science, technical, and medical) publishing has seen both systematic digitiza- tion of its value chain and global expansion for a decade, general trade houses have followed behind at a much slower pace. A few British houses (notably Penguin, but also Oxford and Cambridge University Presses and Harper Collins) have a longstanding tradition of signi - cant operations across several continents. After the acquisition of the largest US trade publisher, Random House, by German Bertelsmann in 1998, and similar moves by French Hachette and, at a smaller scale, Spanish Planeta, the new “emerging markets,” led by Brazil, Russia, India, and China (the so-called BRIC coun- tries), have seen o ces opened by Western publishers in recent years. But little of this has been the subject of systematic market research. The most prominent exception has been the PriceWaterhouseCooper annual “Global Entertainment and Media Outlook,” which includes an analysis and projection for the book sector, among other forms of media. The current edition of this outlook—for the years 2012 to 2016—builds on a theme that couldn’t be truer for the book sector: The “end of the digital beginning,” portraying in depth how “E&M companies reshape and retool for life in the new normal.” Digital, so the report says, is now “embedded in business-as-usual and moving to the heart of media companies worldwide.” Three perspectives are identi ed as key factors for successfully reshaping businesses in this new environment: to under- stand the “connected consumer” through data analytics,

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13 : The Global eBook Market: Current Conditions & Future Projections to devise new—or adjust old—business models, and to develop new organizational models. The PWC outlook highlights China, as it overtook Germany in 2011 and the UK in 2009, becoming the world’s third-largest entertainment and media market, after the US and Japan. With regard to publishing, China has arguably become the second-largest market, after the US, by 2011, overtaking Germany, which is ahead of Japan and the UK in that sector. A broad selection of emerging markets and even developing countries has been covered in the report “Digital publishing in developing countries,” authored by Octavio Kulesz and released in October 2010. The research, which is freely available for download in several formats and languages, focuses notably on Latin America, Sub-Saharan Africa, the Arab World, Russia, India, and China, and documents relevant local actors and initiatives across those continents, with detailed references, providing a hugely valuable resource, even as market details evolve quickly. A detailed account on how select ebook markets evolve was started by Bowker in May 2012 (see the press release with key ndings here). The Global eBook Monitor (GeM) is based on consumer surveys in 10 countries: Australia, Brazil, France, Germany, India, Japan, South Korea, Spain, the UK, and the US. It tracks ebook adoption and consumer attitudes. India and Australia, together with the UK and the US, are seen as leaders in ebook adoption, while consumers in France and Japan were the least likely to have purchased an ebook, at 5 and 8 percent, respectively. GeM has been widely pre- sented and discussed at major trade events and book fairs, and will be updated and extended to additional markets on a regular basis. Global Mapping Perspectives With respect to the ongoing globalization of the book publishing industry, few surveys have been published with a broad international approach. While professional and STM (science, technical, and medical) publishing has seen both systematic digitiza- tion of its value chain and global expansion for a decade, general trade houses have followed behind at a much slower pace. A few British houses (notably Penguin, but also Oxford and Cambridge University Presses and Harper Collins) have a longstanding tradition of signi - cant operations across several continents. After the acquisition of the largest US trade publisher, Random House, by German Bertelsmann in 1998, and similar moves by French Hachette and, at a smaller scale, Spanish Planeta, the new “emerging markets,” led by Brazil, Russia, India, and China (the so-called BRIC coun- tries), have seen o ces opened by Western publishers in recent years. But little of this has been the subject of systematic market research. The most prominent exception has been the PriceWaterhouseCooper annual “Global Entertainment and Media Outlook,” which includes an analysis and projection for the book sector, among other forms of media. The current edition of this outlook—for the years 2012 to 2016—builds on a theme that couldn’t be truer for the book sector: The “end of the digital beginning,” portraying in depth how “E&M companies reshape and retool for life in the new normal.” Digital, so the report says, is now “embedded in business-as-usual and moving to the heart of media companies worldwide.” Three perspectives are identi ed as key factors for successfully reshaping businesses in this new environment: to under- stand the “connected consumer” through data analytics,

11 : The Global eBook Market: Current Conditions & Future Projections Earlier Developments In its annual report for 2010, the PA disclosed growing digital sales gures, demonstrating the acceleration of the digital market in the UK. The overall size of the digital market stood at £180 million (British pounds), having increased by 38 percent from 2009. Most striking was the rapid growth of total consumer digital sales, which increased by 318 percent from £4 million to £16 million between 2009 and 2010. This gure includes consumer ebooks, downloads, and audiobooks. Consumer sales of ebooks and downloads account for 11 percent (from 2 percent in 2009) of the British book market. The eld leaders are still academic and professional publishers, whose sales doubled over three years, amounting to 72 percent of all digital sales. According to the PA, academic publishers were involved in digital publication before trade publishers, mainly because many of the bigger scholarly journal publishers are also the largest academic and professional publish- ers. The trade side started to take o only after the open- ing of a localized UK Kindle store in August 2010 and with the arrival of the Apple iPad in the UK. (Source: Communication from the PA for this study.) In Europe, the UK ebook market comes closest to that of the US in size and growth because of its vibrant per- formance in digital publishing. According to the PA, about 1 million ebooks are available. (It is important to note that some of these are US-listed titles for which there are actually no UK rights.) At the forefront in digital publishing are academic publishers Taylor and Francis, Springer, Pearson, Penguin, and Bloomsbury. In spring 2011, Penguin reported a growth of 180 percent in global ebook sales against early 2010, constituting 14 percent of overall sales across the Penguin Group (21 percent in the US, and 8 percent in the UK) by late summer of 2011. Penguin o ers nearly 6,500 ebook titles on their website (source: Penguin company information). Independent publisher Blackwell’s stores, 6 Foyles stores, and 700 Argo stores, as well as online in October 2012. In April 2012, Sony entered the eld of content o erings by opening its Reader Store UK with digital editions of old and new ction and non ction books. Retailers in the traditional book sphere also secured their part of the pie: Tesco acquired the ebook platform MobCast with 130,000 ebook titles from British publishers (buchreport, September 5, 2009). With numerous new dedicated ereaders under £70 to multifunctional tablets of various brands and operating systems—and a new strong push in early fall of 2012 before the end-of-year holidays—the underlying sales trend points to a shift from dedicated black-and-white gadgets to full-color tablets. At this point, though, dedi- cated ereaders still occupy a signi cant market share. One-third of Britons owned an ereader as of early 2012, and 40 percent of readers of ebooks do so on a Kindle. But tablets have more than doubled their market share to approximately 12 percent among readers of ebooks (The Bookseller, May 15, 2012 for the evolution of devices, see The Bookseller, September 10, 2012). Midyear 2012 revenue reports from major publishers paint an inconclusive picture of how the developments for print and ebooks have a ected the bottom line. Still, pro tability from ebooks is still su ering from the 20 percent VAT on ebooks versus 0 percent VAT for print books the Publishers Association (PA) continues to lobby the government to repair this hurdle (The Bookseller, March 21, 2012), and 5000 consumers have signed a petition to slash the tax for ebooks to 0 percent (The Guardian, March 21, 2012). In e orts to streamline and innovate the ebook experience, some platforms have started to experiment with DRM-free downloads—notably J. K. Rowling, on her own website, Pottermore, which is dedicated to her Harry Potter series. Pearson has announced a subscrip- tion mode in cooperation with PaperC for a limited title list).

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11 : The Global eBook Market: Current Conditions & Future Projections Earlier Developments In its annual report for 2010, the PA disclosed growing digital sales gures, demonstrating the acceleration of the digital market in the UK. The overall size of the digital market stood at £180 million (British pounds), having increased by 38 percent from 2009. Most striking was the rapid growth of total consumer digital sales, which increased by 318 percent from £4 million to £16 million between 2009 and 2010. This gure includes consumer ebooks, downloads, and audiobooks. Consumer sales of ebooks and downloads account for 11 percent (from 2 percent in 2009) of the British book market. The eld leaders are still academic and professional publishers, whose sales doubled over three years, amounting to 72 percent of all digital sales. According to the PA, academic publishers were involved in digital publication before trade publishers, mainly because many of the bigger scholarly journal publishers are also the largest academic and professional publish- ers. The trade side started to take o only after the open- ing of a localized UK Kindle store in August 2010 and with the arrival of the Apple iPad in the UK. (Source: Communication from the PA for this study.) In Europe, the UK ebook market comes closest to that of the US in size and growth because of its vibrant per- formance in digital publishing. According to the PA, about 1 million ebooks are available. (It is important to note that some of these are US-listed titles for which there are actually no UK rights.) At the forefront in digital publishing are academic publishers Taylor and Francis, Springer, Pearson, Penguin, and Bloomsbury. In spring 2011, Penguin reported a growth of 180 percent in global ebook sales against early 2010, constituting 14 percent of overall sales across the Penguin Group (21 percent in the US, and 8 percent in the UK) by late summer of 2011. Penguin o ers nearly 6,500 ebook titles on their website (source: Penguin company information). Independent publisher Blackwell’s stores, 6 Foyles stores, and 700 Argo stores, as well as online in October 2012. In April 2012, Sony entered the eld of content o erings by opening its Reader Store UK with digital editions of old and new ction and non ction books. Retailers in the traditional book sphere also secured their part of the pie: Tesco acquired the ebook platform MobCast with 130,000 ebook titles from British publishers (buchreport, September 5, 2009). With numerous new dedicated ereaders under £70 to multifunctional tablets of various brands and operating systems—and a new strong push in early fall of 2012 before the end-of-year holidays—the underlying sales trend points to a shift from dedicated black-and-white gadgets to full-color tablets. At this point, though, dedi- cated ereaders still occupy a signi cant market share. One-third of Britons owned an ereader as of early 2012, and 40 percent of readers of ebooks do so on a Kindle. But tablets have more than doubled their market share to approximately 12 percent among readers of ebooks (The Bookseller, May 15, 2012 for the evolution of devices, see The Bookseller, September 10, 2012). Midyear 2012 revenue reports from major publishers paint an inconclusive picture of how the developments for print and ebooks have a ected the bottom line. Still, pro tability from ebooks is still su ering from the 20 percent VAT on ebooks versus 0 percent VAT for print books the Publishers Association (PA) continues to lobby the government to repair this hurdle (The Bookseller, March 21, 2012), and 5000 consumers have signed a petition to slash the tax for ebooks to 0 percent (The Guardian, March 21, 2012). In e orts to streamline and innovate the ebook experience, some platforms have started to experiment with DRM-free downloads—notably J. K. Rowling, on her own website, Pottermore, which is dedicated to her Harry Potter series. Pearson has announced a subscrip- tion mode in cooperation with PaperC for a limited title list).

Page 6English-Language and Other eBook Markets click to expand contents

Page 14Market Close-ups click to expand contents

Page 53Key Drivers and Debates click to expand contents

Page 66eBook Piracy in Europe: The Example and Debate in Germany, and Related Findings click to expand contents

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