Author Archives: ari

Globally, ebook markets to continue steady growth during the next few years

2016-10-22

In North America, where Amazon kicked off the modern ebook business in 2007, some book industry experts today are lamenting the recent decline of ebook revenues. Ebook markets outside the US, however, have a different situation and possibly also outlook for the future. PWC, a consultancy, forecasts that globally ebook sales continue to grow steadily, whereas print book revenues continue their gradual fall. PWC’s forecast is projected until 2020.

pwc, book publishing forecast 2020Annual growth rate for ebooks 10.4% and for print books -0.4% until 2020 according to PWC.
In regions like Europe, Asia and the Pacific, the adoption of ebooks have been a lot slower than in the US. For instance, in many European countries the market share of ebooks from the total book market is at 1 – 5% level. There is room for growth. Plenty of it. Sales channels are still being established (for instance, grocery store Aldi in Germany and subscription service Storytel in Scandinavia), tax laws are being amended (in order to treat ebooks equally with print books), self-publishing services are being set up, and people are realizing that large screen smartphones are reading devices.

Do you remember when the Internet bubble burst in 2001? It had been a wild run since the IPO of Netscape in 1995. For some pundits, 2001 was the end of the Internet business and tech business. Well, what happened? Today, they are shaping our world in all fields of life: transportation, entertainment, shopping, working, relationships, you name it.

The fact is that the world is taking its first baby steps in the new era of digital media that today also features electronic books. Today’s ebooks are more or less direct conversions of print books into electronic format – sometimes not even conversions if an ebook is delivered as an PDF file. Multimedia and augmented reality are some of the technologies that may get smartphone-generations to read commercial ebooks just like they read fan fiction, messages or watch online videos. Books will develop with technology, but the concept of book is so strong that it will remain.

So, yes, PWC’s cautious forecast for global annual ebook revenue growth of 10.4% is way more likely to happen than the decline of revenues in the US would turn into a long term trend.

pwc book publishing market forecast

Finally, European Union agrees that ebooks are books

2016-09-19

It is the content that matters. A book is a book regardless of the method you use to read it. A book printed on paper conveys the same ideas, information, excitement and messages as an electronic book enjoyed on a tablet, ereader or smartphone. Now, the European Union agrees with this concept. It means that the VAT for ebooks can be the same as it is for printed books.
kindle page flip video
So far, the VAT for ebooks in EU countries has been higher than for printed books. In some countries paper books don’t have VAT at all, but ebooks may have 15-24% VAT. It is a significant price difference.

France rebelled against the different VAT levels for books and ebooks already in 2013, but EU told France and later Luxembourg that they have to follow the rules. Ebooks were considered electronically supplied services rather than media products because ebooks are being delivered electronically, and there is no physical product. The great project to standardize VAT levels in EU had already started, and media products were part of it. France, Luxembourg and other countries were told to wait for the big VAT reform.

Now, Financial Times reports that Pierre Moscovici, the EU tax commissioner, agreed that ebooks are books. The commission will propose legislation to address the problem during October 2016. National governments will have to approve the initiative after that, but it is difficult to see why any government would want to stop it.

The next interesting story will be the level of VAT for ebooks. Will it be as low as it is for printed books, or will the VAT for paper books be raised to the same higher level than it is for ebooks?