publishers’ agreement with Apple a “conspiracy”. The ultimateresult of this lawsuit, say the critics —and not all ofthem are publishers— will be a “government-assisted monopoly”(Jenn Webb in a TOC blog post), as it would helpAmazon to single-handedly dominate an industry, allowingit ultimately to define retail prices of ebooks instead ofpublishers and thus further expand its massive marketshare. The European Commission has a similar investigationunderway.The complex legal argument, though, is not the most relevantaspect for our perspective here. It is the political dimensioninstead, and the fact that Amazon —and a fewother companies, mostly from the US, that are rolling outtheir ebook services on a truly global scale— are of an entirelydifferent scale and scope from what used to reignover publishing in the old days.Pearson, the leader in global book publishing, had annualrevenues of $9.2 billion in 2012. NewsCorp, one of the leadingglobal media companies and the parent of HarperCollins,recorded a turnover of $34 billion in 2012. This hasNewsCorp playing in the same ballpark as Amazon (with$61 billion in 2012). By comparison, Apple has recordedrevenues of $156 billion (Sept. 2012) and an operating incomeof over $55 billion. Google had revenues of $50 billionand an operating profit of over $13 billion.The discrepancies in size fueled the biggest merger in thehistory of book publishing, when Random House and Penguin(a division of Pearson) decided to combine their activitiesin a new company, Penguin Random House, whichbecame effective July 1, 2013. Together, they will generaterevenues of ca. $3.9 billion from an output of ca. 15,000new titles annually (see The Bookseller, 1 July 2013). However,even the now largest trade publisher is clearly centeredon books.In the current battle over emerging ebook and digital publishingmarkets, we must understand a variety of dynamicsbetween players of not entirely different scales but alsocontrasting agendas. For Penguin Random House and forHachette Livres (with revenues from publishing at $2.8 billion),turning front- and backlist titles into ebooks and expandingtheir access to international markets on a globalscale is an imminent priority.For companies such as Apple or Google, the digital transitionand global outlook in book publishing will be onlypart of a much broader picture, as they distribute all kindsof digital media content, not just books.Even though revenue from books is a central element atAmazon, retailing books is one among several of a broadeningset of services, and this is similarly true for scores ofdomestic ventures in emerging markets where those globalplayers are currently expanding with their book andpublishing related offers. Obviously, this opens muchroom for friction and competition.Only a few book markets are large enough -notably theUnited States, the United Kingdom, Germany, France, orthe Spanish language market, as well as China- to formcenters of gravity in their own right for distinct domesticdevelopments. These markets reflect their own nationalcultural traditions and identities, resulting in strong nationalframing conditions. Such markets foster the emergenceand, more importantly, sustenance of strong domesticplayers for both publishing and retail and for servicesand innovation.Examples include the emphasis on the national book culturein Germany or France, with an almost unanimous consensusin the professional book communities there on thevalue of the book and reading and, as a result, calls for priceregulation as well as strong defense of their book culturesagainst what is defined as external interference.Google —via its digitization efforts with libraries and thescanning of copyrighted works— had become an earlycatalyst for such confrontations, getting local stakeholdersout rallying in defense of the American company’s claimto “organize the knowledge of the world,” at least in Germanyand France, and in the US, over the past several years.This communal action has resulted in the identification ofthe digitization of books most broadly as an assault onbook culture and on fair compensation for intellectualproperty. After the downfall of the music industry and theimpact of piracy on the music business, lobbying by professionalorganizations of the publishing industry couldfind broad support for its claims.Digital has been broadly identified with illegal or at leastunfair use of the cultural stock, first in Germany and Franceand then over time in many parts of continental Europe.In the context of an ever-broader concern about digitalinformation technologies, surveillance, and the loss of privacy,ebooks hit continental Europe at a moment whendigital or e reading is often considered a threat to citizens’freedom and Europe’s difficult standing in a globalizingworld.In such a context, books are swiftly perceived as a strongsymbol of resistance, rooted in a genuine European tradi-6 The Global eBook Report
tion of enlightenment (through books and universal readingand education). At least such is the current argumentof the cultural establishment in most European countries,which must not, however, be confused with readers —themajority of whom are well-educated and media-savvy urbanites—who are largely open to the offerings of the Web,including ereaders and ebooks. It is the same cultural elitethough that is preoccupied with losing local cultural identity.Google’s digitization projects have been confronted bycoordinated legal action in several European countries,which has had (particularly in France) strong political supportfrom government institutions. Examples are theFrench-sponsored national and European digitizationprojects (e.g., Gallica and Europeana) and the German digitaldistribution platform Libreka, as well as legal chargesagainst Google. Interestingly, in several of the largest continentalEuropean book markets (but not in the UK), thecreation of a digital infrastructure has led to the formingof consortia, of which several have managed to take up aposition as either the primary or the secondary leader inthe digital service environment. Such is the case in France,Germany, Spain, Italy, and Sweden.Although 2012 and 2013 have seen at least some of thoseflames put out in scores of settlements, in Europe, notablyin France and in Germany, while Amazon is now perceived,at least by traditional representatives of the book business,as the main threat in a landscape shaped primarily by midsizedor even small family-run businesses.In particularly, smaller markets find themselves in a challengingsituation. Many have rooted their cultural and nationalidentity in a cultural singularity, which is usuallyanchored in literature and books. However, those samelocal elites who represent such a strong local identity, andwho are strong readers also tend to be among the first toembrace reading in English, as they are fluent in foreignlanguages, open to other cultures, and travel widely. Slovenia,Sweden, and Denmark are examples of such markets.New paradigms and newchallengesThe conflicts triggered by the global actors are not limitedto culture. In the late autumn of 2012, a new battle receivedpublicity across Europe, and this time it was about moneyand power.Global players versus local taxation“It’s time to boycott Amazon, ethical consumer” was writtenin bold letters on a UK-based website. The activist callfor action, however, is just one element in a broad debateon how Amazon, Google, and the global coffee brewerStarbucks use complexities and differences among Europeancountries and their respective financial regulationsto reduce their spending on local taxes on a grand scale.“We’re not accusing you of being illegal, we’re accusingyou of being immoral,” was the accusation uttered at ahearing of the British Parliament in November 2012, whenit turned out that, for instance, Amazon’s European headoffice, Amazon EU S.a.r.l., based in Luxembourg, had declareda profit of €20 million after revenues of €9.1 billion,while its British arm, Amazon UK Ltd., had paid £1.8 millionin corporate taxes on over £200 million in turnover in 2011.Google had reported £2.5 billion in UK sales in 2011 buttax of just £3.4 million (The Register, November 13, 2012).Reports started to shed light on how Amazon, in “highlycomplex transaction(s),” since 2005 had rearranged theircompany structure in various European markets, notablythrough establishing its headquarters in tax-friendly Luxembourg,giving it a significant competitive advantageover companies that operated mostly out of and in onemarket. (For details, see a Reuters´ “Special Report: Amazon’sbillion dollar tax shield”, December 6, 2012, and “Howone word change lets Amazon pays less tax on its UK activities,”The Guardian, April 4, 2012).The outrage over Amazon quickly spilled over the Channelto France, where the online retailer on the one hand hadreceived significant financial public support for installinga distribution center in Burgundy and on the other handframed its local operations as those of a mere “service providingsociety”, while transferring and accounting profitsto its holdings in Luxembourg. As a result, not only didindependent booksellers rally against Amazon (Livres Hebdo,January 3, 2013), but French financial authoritieslaunched an inquiry (Livres Hebdo, November 14, 2012).During the first half of 2013, the fiscal debate picked upmomentum as well as massively extended its ambitionsand goals, with the French government debating modelsto tax digital global actors better. A report has been commissionedto explore ideas ranging from taxing the collectionof individual consumer data by firms such as Googleto international actions to redefine how transnationalcompanies and their revenues can be localized (“Fiscalitédu numérique: vers une taxation des données,” Les Echos,The Global eBook Report 7
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- Page 31 and 32: GermanyKey Indicators Values Source
- Page 33 and 34: than 10% of all online sales by the
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- Page 41 and 42: SpainKey Indicators Values Sources,
- Page 43 and 44: focusing on both Spain and Latin Am
- Page 45 and 46: The emerging ebook market may confr
- Page 47 and 48: SwedenKey Indicators Values Sources
- Page 49 and 50: Netherlands2012 was a tough year fo
- Page 51 and 52: inging ebooks to the tenfold larger
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- Page 57 and 58: Source: Vesselin Todorov, Ciela Nor
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Emerging MarketsRussia70% of Russia
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(see details in “eBook piracy in
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The first research comparing the pe
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Revenue Service has been receiving
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on ebooks. It has not gained much t
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ChinaKey Indicators Values Sources,
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Key players in the digital environm
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The Government of India is leading
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Android-based devices in the countr
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and Mathematics books, Hindustan Bo
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When it first launched, most ebooks
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3. Source: Personal interview with
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The Expansion of GlobalPlatformsPub
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Amazon’s performance in 20122012
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strict or eliminate competition”
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settlement is expected to make avai
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Forces Shaping the eBookMarkets: Ke
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Average top 10 ebook prices in sele
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As for the UK, The Bookseller compi
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ation solutions have recently emerg
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In Germany, the by far the largest
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(SSRC, the American Assembly, Colum
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In its report of May 2011, by Le Mo
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Of those who admitted to downloadin
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1,200 titles (see this blogpost by
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The AcceleratedTransformation of th
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AcknowledgmentsThis report has been
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Mandarin, she has specialized in re