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6 : The Global eBook Market: Current Conditions & Future Projections percent, as did the number of new print titles, from 328,259 million in 2010 to a projected 347,178 million in 2011 (Bowker, June 5, 2012). The increase of ebook sales “was the major story in 2011” in the trade segment, sales of ebooks rose to $2.07 billion from $869 million, as units increased 210 percent to 388 million. In adult ction, ebook revenues increased by 117 percent to $1.27 billion, representing 30 percent of segment sales (Publishers Weekly [PW], June 18, 2012). Online retailers reported growth of 35 percent, and direct-to-consumer sales grew by 57 percent, while sales through brick-and-mortar stores fell by 12.6 percent. After the collapse of the bookstore chain Borders in 2011, Amazon “appears to have been the big winner,” with a share of 29 percent of overall spending on books in the rst quarter of 2012 Barnes & Nobles’s share of the book market rose from 19 to 20 percent. (Bowker Market Research’s PubTrack Consumer Survey, quoted in PW, July 27, 2012). In ction, the share of ebooks was 34 percent in units and 31 percent in value in the rst quarter of 2012, according to the AAP (StatShots) for the rst time, ebooks—which on average sell at a signi cantly lower retail price than printed copies of the same work—at English-Language and Other eBook Markets The following overview provides key data for the two leading English markets, those of the US and the UK, as a benchmark for the more in-depth representation of trends and developments in places where English is not the rst language of the average reader. United States The US publishing industry and the US public have embraced new reading formats like no other nation. For readers, ebooks came as a natural and permanent choice in addition to printed books. Publishers have e ectively responded to consumers’ fast-growing acceptance of new reading devices by constantly rede ning and expanding new concepts for books. “The eBook phenomenon continued in 2012 with eBooks ranking, for the rst time, as the year’s #1 indi- vidual format for Adult Fiction” was the headline in the BookStats report on US publishing in 2011, issued jointly by the Association of American Publishers (AAP) and the Book Industry Study Group (BISG) in July 2012. The $27.2 billion 2011 US book market declined by 2.5 percent from $27.94 billion in 2010, while unit sales grew by 3.4 United States (2010-2011 Book Market) Key indicators Values Sources, comments Book market size (p+e,* at consumer prices) Publishers’ net sale revenues: $27.2 billion Source: AAP/BISG data for 2011 New titles per 1 million inhabitants 939 Ebook titles (available from publishers) 950,000 Amazon claims at end of 2Q2011 to have 950,000 ebook titles in their catalog, the vast majority of which are in English Market share of ebooks 25% of all trade sales AAP/BISG data for May 2012. Reported at Publishers’ Lunch (September 6, 2012). Key market parameters No price regulation * p+e = printed and electronic

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6 : The Global eBook Market: Current Conditions & Future Projections percent, as did the number of new print titles, from 328,259 million in 2010 to a projected 347,178 million in 2011 (Bowker, June 5, 2012). The increase of ebook sales “was the major story in 2011” in the trade segment, sales of ebooks rose to $2.07 billion from $869 million, as units increased 210 percent to 388 million. In adult ction, ebook revenues increased by 117 percent to $1.27 billion, representing 30 percent of segment sales (Publishers Weekly [PW], June 18, 2012). Online retailers reported growth of 35 percent, and direct-to-consumer sales grew by 57 percent, while sales through brick-and-mortar stores fell by 12.6 percent. After the collapse of the bookstore chain Borders in 2011, Amazon “appears to have been the big winner,” with a share of 29 percent of overall spending on books in the rst quarter of 2012 Barnes & Nobles’s share of the book market rose from 19 to 20 percent. (Bowker Market Research’s PubTrack Consumer Survey, quoted in PW, July 27, 2012). In ction, the share of ebooks was 34 percent in units and 31 percent in value in the rst quarter of 2012, according to the AAP (StatShots) for the rst time, ebooks—which on average sell at a signi cantly lower retail price than printed copies of the same work—at English-Language and Other eBook Markets The following overview provides key data for the two leading English markets, those of the US and the UK, as a benchmark for the more in-depth representation of trends and developments in places where English is not the rst language of the average reader. United States The US publishing industry and the US public have embraced new reading formats like no other nation. For readers, ebooks came as a natural and permanent choice in addition to printed books. Publishers have e ectively responded to consumers’ fast-growing acceptance of new reading devices by constantly rede ning and expanding new concepts for books. “The eBook phenomenon continued in 2012 with eBooks ranking, for the rst time, as the year’s #1 indi- vidual format for Adult Fiction” was the headline in the BookStats report on US publishing in 2011, issued jointly by the Association of American Publishers (AAP) and the Book Industry Study Group (BISG) in July 2012. The $27.2 billion 2011 US book market declined by 2.5 percent from $27.94 billion in 2010, while unit sales grew by 3.4 United States (2010-2011 Book Market) Key indicators Values Sources, comments Book market size (p+e,* at consumer prices) Publishers’ net sale revenues: $27.2 billion Source: AAP/BISG data for 2011 New titles per 1 million inhabitants 939 Ebook titles (available from publishers) 950,000 Amazon claims at end of 2Q2011 to have 950,000 ebook titles in their catalog, the vast majority of which are in English Market share of ebooks 25% of all trade sales AAP/BISG data for May 2012. Reported at Publishers’ Lunch (September 6, 2012). Key market parameters No price regulation * p+e = printed and electronic

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5 : The Global eBook Market: Current Conditions & Future Projections The ambition is not and cannot be to track every ebook market development worldwide. We are very much aware of the incompleteness of the report in both geographical and thematic regards. Japan, Korea, and India are missing from this study, as is a chapter on education, to name just a few blind spots. But much more fundamentally, we cannot yet refer to any useful global map of the ebook business, although one is forthcoming. This report is thus very much a global survey based on the available material. Despite all the previously listed limitations, the ambition is to serve the industry as well as all nonpro t stakeholders as a reference. In return, we strongly encourage feedback and—even more enthusi- astically—the input of information and data to improve the foundations of this analysis. The goal of this study—and particularly of this Autumn 2012 update, after its initial presentation at the TOC Frankfurt conference in October 2011—is to pursue a mapping process of international ebook markets and to provide details and insights for a better understand- ing of those challenges and opportunities. This study primarily dwells on data, reporting, and research done by others, adding original research only on some key aspects (such as ebook pricing issues in Europe). Its aim is to summarize, to condense, and—with a certain ambition to compare trends and develop- ments—to frame the status quo and strategic perspec- tives with regard to global ebook markets. (It is signi cant that the plural “markets” is used here, as compared to the initial 2011 study.) To some extent, descriptions of earlier developments, reaching back to 2011 and even 2010, have been kept in the text as a reference and for historic context.

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5 : The Global eBook Market: Current Conditions & Future Projections The ambition is not and cannot be to track every ebook market development worldwide. We are very much aware of the incompleteness of the report in both geographical and thematic regards. Japan, Korea, and India are missing from this study, as is a chapter on education, to name just a few blind spots. But much more fundamentally, we cannot yet refer to any useful global map of the ebook business, although one is forthcoming. This report is thus very much a global survey based on the available material. Despite all the previously listed limitations, the ambition is to serve the industry as well as all nonpro t stakeholders as a reference. In return, we strongly encourage feedback and—even more enthusi- astically—the input of information and data to improve the foundations of this analysis. The goal of this study—and particularly of this Autumn 2012 update, after its initial presentation at the TOC Frankfurt conference in October 2011—is to pursue a mapping process of international ebook markets and to provide details and insights for a better understand- ing of those challenges and opportunities. This study primarily dwells on data, reporting, and research done by others, adding original research only on some key aspects (such as ebook pricing issues in Europe). Its aim is to summarize, to condense, and—with a certain ambition to compare trends and develop- ments—to frame the status quo and strategic perspec- tives with regard to global ebook markets. (It is signi cant that the plural “markets” is used here, as compared to the initial 2011 study.) To some extent, descriptions of earlier developments, reaching back to 2011 and even 2010, have been kept in the text as a reference and for historic context.

7 : The Global eBook Market: Current Conditions & Future Projections reworked version was rst self-published in early sum- mer 2012, it was published by major traditional publish- ing houses internationally and became a bestseller, rst in the US and then in countless translated editions around the globe for autumn 2012 and the end-of-year holiday season 2012. In the meantime, all sectors and elements in the value chain of publishing have been confronted with new players and new business practices, notably as the largest retail platforms assume more and more roles that had been previously taken care of by specialized actors. eBooks and reading devices are now host to hefty con- troversies with regard to market access, business prac- tices, and consumer attention. Amazon has launched and then scaled up its own publishing activities. Even libraries have found themselves becoming battle elds, as a controversy between public libraries and US pub- lishers took shape over lending rights for ebooks when several major groups, including Simon & Schuster, Hachette, and Penguin, decided to withhold titles from library loans (The Bookseller, February 16, 2012). In April 2012, a ling by the US Department of Justice (DoJ) in New York against ve large publishers and Apple de ned what may become the key battle over the terms and conditions for the ebook economy in the US and beyond. After a stando between Macmillan and Amazon in early 2011, the DoJ alleged that a scheme known as the Agency Pricing model, in which publishers set retail prices for their ebooks, came from an “ongoing conspiracy and agreement” between defendants, caus- ing “e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid” (quoted in Publishers Lunch, April 11, 2012). Three of the publishers—HarperCollins, Hachette, and Simon & Schuster—settled with the DoJ by promis- ing for two years not to “restrict, limit, or impede an e-book retailer’s ability to set, alter, or reduce the retail price of any e-book or to o er price discounts or any other form of promotions to encourage consumers to purchase one or more e-books,” Macmillan and Penguin $282.3 million brought in larger revenues than hardcover sales at $229.6 million, sparking comments such as: “It’s the end of books as you knew them” (ZDNet, June 18, 2012). The change was mirrored in purchases and owner- ship of devices as well as in reading habits. By spring 2012, ebooks became mainstream: 21 percent of adults had read an ebook in the past year, versus the 17 percent who reported doing so in December 2011. This shift is part of a broader “shift from printed to digital material,” according to Pew Research, as 43 percent of Americans ages 16 or older had read either a book or “other long-form content” in digital format (Pew Research Center Publications, April 4, 2012). The 2011 end-of-year holiday season saw a signi - cant spike in sales of devices. The share of US adults owning a tablet nearly doubled, from 10 to 19 percent, equaling the ownership of ereaders, which was also at 19 percent, with a stronger adoption by women than men (Pew Internet, January 23, 2012). However, another survey only a few months later pointed toward tablets actually outperforming ereaders as the preferred ebook reading device (Bowker, with BISG, April 30, 2012). The work of authors has also undergone structural change on a broad scale, as self-publishing has become the path to market for an increasing number of books. Based on ISBN statistics, Bowker has counted 211,269 self-published titles for 2011 (compared to 133,036 in 2010), with ction accounting for 45 percent of the titles. The average retail price is $6.94 for self-published ction. eBooks represented 41 percent of self-published units, yet a mere 11 percent of sales, as the average self-pub- lished ebook sold for $3.18 in comparison, trade paper- backs had an average price of $12.68 and hardcovers averaged $14.40 (PW, June 4, 2012). Bowker has announced the creation of a self-publish- ing bestseller list the segment was represented strongly in overall charts, a development that became a game- changer with Fifty Shades of Grey, a three-volume novel by E. L. James, which (as mentioned earlier) was origi- nally written as fan ction for the Twilight series. The

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7 : The Global eBook Market: Current Conditions & Future Projections reworked version was rst self-published in early sum- mer 2012, it was published by major traditional publish- ing houses internationally and became a bestseller, rst in the US and then in countless translated editions around the globe for autumn 2012 and the end-of-year holiday season 2012. In the meantime, all sectors and elements in the value chain of publishing have been confronted with new players and new business practices, notably as the largest retail platforms assume more and more roles that had been previously taken care of by specialized actors. eBooks and reading devices are now host to hefty con- troversies with regard to market access, business prac- tices, and consumer attention. Amazon has launched and then scaled up its own publishing activities. Even libraries have found themselves becoming battle elds, as a controversy between public libraries and US pub- lishers took shape over lending rights for ebooks when several major groups, including Simon & Schuster, Hachette, and Penguin, decided to withhold titles from library loans (The Bookseller, February 16, 2012). In April 2012, a ling by the US Department of Justice (DoJ) in New York against ve large publishers and Apple de ned what may become the key battle over the terms and conditions for the ebook economy in the US and beyond. After a stando between Macmillan and Amazon in early 2011, the DoJ alleged that a scheme known as the Agency Pricing model, in which publishers set retail prices for their ebooks, came from an “ongoing conspiracy and agreement” between defendants, caus- ing “e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid” (quoted in Publishers Lunch, April 11, 2012). Three of the publishers—HarperCollins, Hachette, and Simon & Schuster—settled with the DoJ by promis- ing for two years not to “restrict, limit, or impede an e-book retailer’s ability to set, alter, or reduce the retail price of any e-book or to o er price discounts or any other form of promotions to encourage consumers to purchase one or more e-books,” Macmillan and Penguin $282.3 million brought in larger revenues than hardcover sales at $229.6 million, sparking comments such as: “It’s the end of books as you knew them” (ZDNet, June 18, 2012). The change was mirrored in purchases and owner- ship of devices as well as in reading habits. By spring 2012, ebooks became mainstream: 21 percent of adults had read an ebook in the past year, versus the 17 percent who reported doing so in December 2011. This shift is part of a broader “shift from printed to digital material,” according to Pew Research, as 43 percent of Americans ages 16 or older had read either a book or “other long-form content” in digital format (Pew Research Center Publications, April 4, 2012). The 2011 end-of-year holiday season saw a signi - cant spike in sales of devices. The share of US adults owning a tablet nearly doubled, from 10 to 19 percent, equaling the ownership of ereaders, which was also at 19 percent, with a stronger adoption by women than men (Pew Internet, January 23, 2012). However, another survey only a few months later pointed toward tablets actually outperforming ereaders as the preferred ebook reading device (Bowker, with BISG, April 30, 2012). The work of authors has also undergone structural change on a broad scale, as self-publishing has become the path to market for an increasing number of books. Based on ISBN statistics, Bowker has counted 211,269 self-published titles for 2011 (compared to 133,036 in 2010), with ction accounting for 45 percent of the titles. The average retail price is $6.94 for self-published ction. eBooks represented 41 percent of self-published units, yet a mere 11 percent of sales, as the average self-pub- lished ebook sold for $3.18 in comparison, trade paper- backs had an average price of $12.68 and hardcovers averaged $14.40 (PW, June 4, 2012). Bowker has announced the creation of a self-publish- ing bestseller list the segment was represented strongly in overall charts, a development that became a game- changer with Fifty Shades of Grey, a three-volume novel by E. L. James, which (as mentioned earlier) was origi- nally written as fan ction for the Twilight series. The

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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