4 : The Global eBook Market: Current Conditions & Future Projections Paradoxically, the global expansion of ebook plat- forms such as Amazon, Apple, Barnes & Noble, Google, or Kobo resulted at rst in a new fragmentation even within a basically integrated economical space such as the EU. Although this fragmentation may lessen over time, it highlights a deeper problem that results from contradictory policies between member states of the EU, and the European Commission, which is calling on publishers, retail platforms and also national govern- ments to embrace more boldly digital change, and help creating a single market for ebooks. (See this blog entry by Commissioner Neelie Kroes on the matter, and launching an ebook round table in June 2012.) The global ebook market will not be a level playing eld for some time to come, and we can be fairly certain that it will be not become the open digital space that many wish for across the globe. Exclusions and inclusions will remain a governing pattern for a long time, and the repercussions will not always be funny, although there was one humorous moment for me in late 2011: The wish to acquire a digital copy of, ironically, a book on the global spread of English (Nicholas Ostler’s fabu- lous The Last Lingua Franca, published by Penguin in the UK) led to an unexpected odyssey. Buying an EPUB version (as opposed to one for Mobipocket/Kindle) of the book from online retailers in the UK (Waterstones or WHSmith) from a computer in Vienna, Austria, turned out to be impossible, as British retailers would not accept an overseas customer. They would, of course, have shipped a paper copy anywhere in the world without hesitation (with a few extra pounds charged for ship- ping). The same applied to the publisher, Penguin, despite that house being at the forefront of both the globalization and the digitization of books. In the end, the purchase was possible through Kobo, a (then) new Canadian venture, which had started to become an international player exactly by venturing into this odd mix of challenges and future opportunities. den Diebstahl geistigen Eigentums!”), and found many more who followed their call. In Russia, the government released o cial statistics that at least 90 percent of available Russian ebooks come from pirates under such circumstances, a solid ebook market can hardly take shape. But how to outsmart piracy, if policing the Web is not the solution, legally or practically? A war on piracy can claim to pursue a certain ethical ambition the localiza- tion of ebooks confronts much more mundane obstacles as well. One such hurdle—and a really tough nut to crack—is tax: sales tax in the US or value added tax (VAT) in Europe. The tax issue has already been raised in many American states with regard to a genuinely American brand: Amazon.com. (For a detailed account, see the Wikipedia page here.) In Europe, the VAT is redesigning the map of retail, placing the tiny state of Luxembourg at center stage. Luxembourg is the site of European head- quarters for Amazon, Apple, Kobo, and Barnes & Noble. (Of the major European ebook sellers, only Google is based elsewhere—in Ireland—for historic reasons.) Having already created an attractive business environ- ment, notably with regard to corporate taxes, Luxembourg decided in late 2011 to unilaterally lower the VAT on ebooks to 3 percent (from 15 percent), which obviously gives it a signi cant edge over many other European markets, including the UK (where VAT on ebooks is 20 percent), or Germany (19 percent). So far, European trade authorities consider ebooks to be soft- ware that is licensed to consumers rather than a product that can be purchased like a book. As a result, preferen- tial VAT rates for books (0 percent in the UK 7 percent in Germany) do not apply for an identical title’s digital edition. Despite such views in the European Commission, France and Spain have recently passed national laws (or simply tolerate practices) that consider ebooks to be books see the country-speci c sections later in this material for details. (See also The Bookseller, December 18, 2011)
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4 : The Global eBook Market: Current Conditions & Future Projections Paradoxically, the global expansion of ebook plat- forms such as Amazon, Apple, Barnes & Noble, Google, or Kobo resulted at rst in a new fragmentation even within a basically integrated economical space such as the EU. Although this fragmentation may lessen over time, it highlights a deeper problem that results from contradictory policies between member states of the EU, and the European Commission, which is calling on publishers, retail platforms and also national govern- ments to embrace more boldly digital change, and help creating a single market for ebooks. (See this blog entry by Commissioner Neelie Kroes on the matter, and launching an ebook round table in June 2012.) The global ebook market will not be a level playing eld for some time to come, and we can be fairly certain that it will be not become the open digital space that many wish for across the globe. Exclusions and inclusions will remain a governing pattern for a long time, and the repercussions will not always be funny, although there was one humorous moment for me in late 2011: The wish to acquire a digital copy of, ironically, a book on the global spread of English (Nicholas Ostler’s fabu- lous The Last Lingua Franca, published by Penguin in the UK) led to an unexpected odyssey. Buying an EPUB version (as opposed to one for Mobipocket/Kindle) of the book from online retailers in the UK (Waterstones or WHSmith) from a computer in Vienna, Austria, turned out to be impossible, as British retailers would not accept an overseas customer. They would, of course, have shipped a paper copy anywhere in the world without hesitation (with a few extra pounds charged for ship- ping). The same applied to the publisher, Penguin, despite that house being at the forefront of both the globalization and the digitization of books. In the end, the purchase was possible through Kobo, a (then) new Canadian venture, which had started to become an international player exactly by venturing into this odd mix of challenges and future opportunities. den Diebstahl geistigen Eigentums!”), and found many more who followed their call. In Russia, the government released o cial statistics that at least 90 percent of available Russian ebooks come from pirates under such circumstances, a solid ebook market can hardly take shape. But how to outsmart piracy, if policing the Web is not the solution, legally or practically? A war on piracy can claim to pursue a certain ethical ambition the localiza- tion of ebooks confronts much more mundane obstacles as well. One such hurdle—and a really tough nut to crack—is tax: sales tax in the US or value added tax (VAT) in Europe. The tax issue has already been raised in many American states with regard to a genuinely American brand: Amazon.com. (For a detailed account, see the Wikipedia page here.) In Europe, the VAT is redesigning the map of retail, placing the tiny state of Luxembourg at center stage. Luxembourg is the site of European head- quarters for Amazon, Apple, Kobo, and Barnes & Noble. (Of the major European ebook sellers, only Google is based elsewhere—in Ireland—for historic reasons.) Having already created an attractive business environ- ment, notably with regard to corporate taxes, Luxembourg decided in late 2011 to unilaterally lower the VAT on ebooks to 3 percent (from 15 percent), which obviously gives it a signi cant edge over many other European markets, including the UK (where VAT on ebooks is 20 percent), or Germany (19 percent). So far, European trade authorities consider ebooks to be soft- ware that is licensed to consumers rather than a product that can be purchased like a book. As a result, preferen- tial VAT rates for books (0 percent in the UK 7 percent in Germany) do not apply for an identical title’s digital edition. Despite such views in the European Commission, France and Spain have recently passed national laws (or simply tolerate practices) that consider ebooks to be books see the country-speci c sections later in this material for details. (See also The Bookseller, December 18, 2011)

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