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14 : The Global eBook Market: Current Conditions & Future Projections Digital reading devices were a highly popular gift at the end of 2011, followed by a widely recorded surge in subsequent ebook downloads in January and February 2012, according to strong anecdotal evidence from distributors (no by monthly gures have been made public). Tablets also have broadened their presence (by 142 percent across Western Europe in the rst half of 2012, according to GfK), and can be expected to be used for reading in the most media-savvy consumer seg- ments. Moreover, retail prices for many devices have come down signi cantly since the end of 2011, with E Ink devices dropping below €60 (e.g., at Weltbild, which is arguably Germany’s second-largest online platform for books, behind Amazon.de, which promotes the Kindle from €79), and with the range of tablet devices o ered broadening rapidly. Summer 2012 has seen the advent of Android platforms on a larger scale (including Google’s Nexus 7), and in the fall, Kobo will introduce its next generation of devices, as will Amazon (notably its Fire), bringing the barrier of entry for tablets clearly under the threshold of €200. Market Close-ups Germany The overall German book market declined by about 2.3 percent from January to August 2012 (and was down 2.6 percent in 2011, after a drop of 3.3 percent in 2010). eBook sales are expected to account for a mere 2 percent in 2012 (up from 1 percent in 2011). Nevertheless, Germany can be still seen as a haven of stability and calm when compared to many other international book markets (Branchenmonitor Buch, September 2012 Media Control, quoted in buchreport, September 11, 2012). A widening gap has opened regarding how to best stabilize the German book market as it stands today, and prepare it for major shifts driven by a variety of forces, including changes in consumer habits and new entrants to the market. The perception of what ebooks currently represent for German readers depends on who’s answer- ing the question. Germany Key indicators Values Sources, comments Book market size (p+e, at consumer prices) €9,601 m* Source: Börsenverein (Publishers and Booksellers’ Association), 2012 Titles published per year (new and successive editions) 96,273 Source: Börsenverein (Publishers and Booksellers’ Association), 2012 New titles per 1 m inhabitants 1,138 Ebook titles (available from publishers) ca. 80,000 EPUB 115,000 PDF Source: LIbri.de Market share of ebooks 2% (2011) Estimate (2011): 1% Key market parameters Fixed book price for printed books VAT 7% for print, 19% for ebooks Börsenverein lobbying for extending xed pricing to ebooks. *m = million

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14 : The Global eBook Market: Current Conditions & Future Projections Digital reading devices were a highly popular gift at the end of 2011, followed by a widely recorded surge in subsequent ebook downloads in January and February 2012, according to strong anecdotal evidence from distributors (no by monthly gures have been made public). Tablets also have broadened their presence (by 142 percent across Western Europe in the rst half of 2012, according to GfK), and can be expected to be used for reading in the most media-savvy consumer seg- ments. Moreover, retail prices for many devices have come down signi cantly since the end of 2011, with E Ink devices dropping below €60 (e.g., at Weltbild, which is arguably Germany’s second-largest online platform for books, behind Amazon.de, which promotes the Kindle from €79), and with the range of tablet devices o ered broadening rapidly. Summer 2012 has seen the advent of Android platforms on a larger scale (including Google’s Nexus 7), and in the fall, Kobo will introduce its next generation of devices, as will Amazon (notably its Fire), bringing the barrier of entry for tablets clearly under the threshold of €200. Market Close-ups Germany The overall German book market declined by about 2.3 percent from January to August 2012 (and was down 2.6 percent in 2011, after a drop of 3.3 percent in 2010). eBook sales are expected to account for a mere 2 percent in 2012 (up from 1 percent in 2011). Nevertheless, Germany can be still seen as a haven of stability and calm when compared to many other international book markets (Branchenmonitor Buch, September 2012 Media Control, quoted in buchreport, September 11, 2012). A widening gap has opened regarding how to best stabilize the German book market as it stands today, and prepare it for major shifts driven by a variety of forces, including changes in consumer habits and new entrants to the market. The perception of what ebooks currently represent for German readers depends on who’s answer- ing the question. Germany Key indicators Values Sources, comments Book market size (p+e, at consumer prices) €9,601 m* Source: Börsenverein (Publishers and Booksellers’ Association), 2012 Titles published per year (new and successive editions) 96,273 Source: Börsenverein (Publishers and Booksellers’ Association), 2012 New titles per 1 m inhabitants 1,138 Ebook titles (available from publishers) ca. 80,000 EPUB 115,000 PDF Source: LIbri.de Market share of ebooks 2% (2011) Estimate (2011): 1% Key market parameters Fixed book price for printed books VAT 7% for print, 19% for ebooks Börsenverein lobbying for extending xed pricing to ebooks. *m = million

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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,

15 : The Global eBook Market: Current Conditions & Future Projections non ction, see here), one by wholesaler Libri.de (checked on September 15, 2012), and several charts at Amazon.de for German commercial and free books and for foreign-language books. Libri.de and Amazon.de do not have separate lists by genre. The MCGfK top 20 ction chart seems to track EPUB-formatted titles (but with no indication given to either formats or the panel behind the chart). It is, however, largely consistent with the respective print bestseller list for July, except that some titles are obviously driven by a particular reader community (as with the Hunger Games trilogy, which recently returned to headlines via the movie adaptation) or by an ebook special (as with a volume from the popu- lar German Perry Rhodan science ction series at rank 16, published by Luebbe and priced at €2.99). The average retail price for the MCGfK list is €9.40—almost the same as that at Weltbild.de, where the average price is €9.47. But Weltbild more aggressively juxtaposes each ebook title with its equivalent price in the print edition, show- ing what a consumer is saving over the digital edition. The EPUB chart at Libri.de is similar to that of MCGfK but does not include any ebooks less than €7.99. The average price is €11.85. An entirely di erent pricing policy is re ected at Amazon.de. Here, there is a separate lists of “free ebooks” posted next to the list of commer- cialized ebooks, which—more importantly—has numer- ous titles at just €0.99 or €2.69 intermingled with Kindle editions from frontlist novels, such as Hunger Games (€12.99), crime star Jussi Adler Olsen (€15.99), and Ken Follett’s Winter of the World (€22.99). It must be emphasized that all of these listed ebooks strictly respect Germany’s xed retail price, so no direct competition on pricing of any one title is shaping those charts yet signi cantly opposing perspectives with regard to marketing are re ected. Overall, the Amazon approach is clearly aiming for a price level as well as a pricing strategy of ebooks that is fundamentally di erent from that of traditional print titles and their marketers, who wish to keep ebooks within the pricing grid of printed books. The situation is also evolving rapidly with regard to the number of titles o ered. The rst half of 2012 has seen ebook sales worth some €7.83 million (plus an additional 3.24 million free downloads, or 41 percent), equal roughly to all sales in 2011 (Media Control, buchre- port September 11, 2012). An Analysis of eBook Bestsellers in Germany Two works of ction in particular may have helped bring ebooks to a wide reading audience: Susanne Collins’s Hunger Games trilogy, which hit German movie screens in early 2012, and E. L. James’s Fifty Shades of Grey, the wildly popular fan- ction and self-publishing phenom- enon from Random House. The boost for ebooks comes primarily from the three market leaders in German publishing—Random House, the Holtzbrinck group, and Bonnier (with their Ullstein and Piper imprints)—and a few midsized publishing houses such as Oetinger (publishers of the Hunger Games trilogy, or Lübbe—with 1500 ebook titles avail- able—which succeeded in spearheading the market in genre ction, notably with digital editions of their decade-old Perry Rhodan science ction series). Romance and fantasy books also constitute a signi cant share of ebooks, allowing some small niche players to broaden their presence on the market. A number of publishing companies have started to adjust their in- house organization by creating special departments for ebooks, entertainment (Lübbe), or e-publishing (Aufbau, Gräfe, and Unzer). eBooks also served as a platform for self-published authors to gain a wide audience Amazon announced its rst title (authored by Jonas Winner) to have sold over 100,000 copies in the German Kindle Store, and new bestselling titles continue to emerge from its Kindle Direct Publishing author service. A close-up look at current ebook bestseller lists allows for a more in-depth understanding of develop- ments and patterns. Three bestseller lists are relevant here: one produced by Media Control GfK for July 2012 (referred to as MCGfK, with split charts for ction and

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15 : The Global eBook Market: Current Conditions & Future Projections non ction, see here), one by wholesaler Libri.de (checked on September 15, 2012), and several charts at Amazon.de for German commercial and free books and for foreign-language books. Libri.de and Amazon.de do not have separate lists by genre. The MCGfK top 20 ction chart seems to track EPUB-formatted titles (but with no indication given to either formats or the panel behind the chart). It is, however, largely consistent with the respective print bestseller list for July, except that some titles are obviously driven by a particular reader community (as with the Hunger Games trilogy, which recently returned to headlines via the movie adaptation) or by an ebook special (as with a volume from the popu- lar German Perry Rhodan science ction series at rank 16, published by Luebbe and priced at €2.99). The average retail price for the MCGfK list is €9.40—almost the same as that at Weltbild.de, where the average price is €9.47. But Weltbild more aggressively juxtaposes each ebook title with its equivalent price in the print edition, show- ing what a consumer is saving over the digital edition. The EPUB chart at Libri.de is similar to that of MCGfK but does not include any ebooks less than €7.99. The average price is €11.85. An entirely di erent pricing policy is re ected at Amazon.de. Here, there is a separate lists of “free ebooks” posted next to the list of commer- cialized ebooks, which—more importantly—has numer- ous titles at just €0.99 or €2.69 intermingled with Kindle editions from frontlist novels, such as Hunger Games (€12.99), crime star Jussi Adler Olsen (€15.99), and Ken Follett’s Winter of the World (€22.99). It must be emphasized that all of these listed ebooks strictly respect Germany’s xed retail price, so no direct competition on pricing of any one title is shaping those charts yet signi cantly opposing perspectives with regard to marketing are re ected. Overall, the Amazon approach is clearly aiming for a price level as well as a pricing strategy of ebooks that is fundamentally di erent from that of traditional print titles and their marketers, who wish to keep ebooks within the pricing grid of printed books. The situation is also evolving rapidly with regard to the number of titles o ered. The rst half of 2012 has seen ebook sales worth some €7.83 million (plus an additional 3.24 million free downloads, or 41 percent), equal roughly to all sales in 2011 (Media Control, buchre- port September 11, 2012). An Analysis of eBook Bestsellers in Germany Two works of ction in particular may have helped bring ebooks to a wide reading audience: Susanne Collins’s Hunger Games trilogy, which hit German movie screens in early 2012, and E. L. James’s Fifty Shades of Grey, the wildly popular fan- ction and self-publishing phenom- enon from Random House. The boost for ebooks comes primarily from the three market leaders in German publishing—Random House, the Holtzbrinck group, and Bonnier (with their Ullstein and Piper imprints)—and a few midsized publishing houses such as Oetinger (publishers of the Hunger Games trilogy, or Lübbe—with 1500 ebook titles avail- able—which succeeded in spearheading the market in genre ction, notably with digital editions of their decade-old Perry Rhodan science ction series). Romance and fantasy books also constitute a signi cant share of ebooks, allowing some small niche players to broaden their presence on the market. A number of publishing companies have started to adjust their in- house organization by creating special departments for ebooks, entertainment (Lübbe), or e-publishing (Aufbau, Gräfe, and Unzer). eBooks also served as a platform for self-published authors to gain a wide audience Amazon announced its rst title (authored by Jonas Winner) to have sold over 100,000 copies in the German Kindle Store, and new bestselling titles continue to emerge from its Kindle Direct Publishing author service. A close-up look at current ebook bestseller lists allows for a more in-depth understanding of develop- ments and patterns. Three bestseller lists are relevant here: one produced by Media Control GfK for July 2012 (referred to as MCGfK, with split charts for ction and

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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