Global eBook 2016 A report on market trends and developments Written by Rüdiger Wischenbart, together with Carlo Carrenho (Brazil), Dayou Chen (China), Javier Celaya (Spain), Yanhong Kong (China), Miha Kovac (Central and East Europe), and Vinutha Mallya (India). Additional research by Julia Coufal and Jennifer Krenn. Sponsors Media Partners Bogmarkedet (Denmark), Book Dao (China), BookExpo America (USA), Book Industry Magazine (Russia), buchreport (Germany), Dosdoce.com (Spain), Frankfurt Book Fair (Germany), Informazioni Editoriali (Italy), Livres Hebdo (France), London Book Fair (UK), Svensk Bokhandel (Sweden), Publish News (Brazil), Publishers Weekly (USA), The Bookseller (UK), Publishing Perspectives (USA) Global eBook 2016 A report on market trends and developments Written by Rüdiger Wischenbart, together with Carlo Carrenho (Brazil), Dayou Chen (China), Javier Celaya (Spain), Yanhong Kong (China), Miha Kovac (Central and East Europe), and Vinutha Mallya (India). Additional research by Julia Coufal and Jennifer Krenn. Published by Rüdiger Wischenbart Content and Consulting, Vienna ISBN: 978-3-903074-07-1 © Rüdiger Wischenbart Content and Consulting. © All Rights Reserved Cover design by Bladebit, Vienna This book was created with Booktype. For more information, please visit: www.booktype.pro Global eBook 2016 Table of Contents Executive summary .................................................................................................................................... 1 Part 1: Publishing – print and digital – in the global context ................................................................. 4 Publishing in global context ....................................................................................................................... 5 Key trends across selected markets ......................................................................................................... 14 Contributed article Klopotek ..................................................................................................................... 20 Part 2: English language markets ............................................................................................................. 22 English language ebook markets ............................................................................................................. 23 United States ............................................................................................................................................ 25 United Kingdom ........................................................................................................................................ 30 Part 3: Europe .............................................................................................................................................. 34 Europe ...................................................................................................................................................... 35 Germany .................................................................................................................................................. 37 Austria ...................................................................................................................................................... 46 Contributed article Tolino ......................................................................................................................... 47 France ...................................................................................................................................................... 50 Spain ........................................................................................................................................................ 60 Italy .......................................................................................................................................................... 65 The Netherlands ....................................................................................................................................... 69 Scandinavia .............................................................................................................................................. 71 Central and Eastern Europe ..................................................................................................................... 76 Part 4: Emerging Markets .......................................................................................................................... 84 Emerging markets .................................................................................................................................... 85 Brazil ........................................................................................................................................................ 87 Is the book industry entering into a new exploitation chain? Contributed article by Bookwire ................ 99 China ...................................................................................................................................................... 102 India ....................................................................................................................................................... 107 Russia ..................................................................................................................................................... 122 Part 5: Key drivers ..................................................................................................................................... 126 Key drivers and debates ......................................................................................................................... 127 The expansion of global and regional platforms: Amazon, Apple, Kobo and Tolino ............................... 129 Measuring ebook markets in Europe: Data snapshots, case studies and trending charts ...................... 141 The cost of ebooks, and the re-framing of book markets: Legal battles in the US; contradictory pricing strategies in Europe ........................................................................................................................ 146 Piracy: Nuisance, threat or opportunity? ................................................................................................ 160 Self-publishing ........................................................................................................................................ 174 Subscription platforms ........................................................................................................................... 176 How digitalization created a licensing opportunity. Contributed article by Copyright Clearance Center ......................................................................................................................................................... 181 DRM: Protected vs. free .......................................................................................................................... 183 Outlook and projections ......................................................................................................................... 185 Part 6: eBook Yellow Pages ..................................................................................................................... 186 eBook Yellow Pages ................................................................................................................................ 187 Ebook publishers .................................................................................................................................... 188 Aggregators, distributors and other service providers ........................................................................... 192 Educational organisations ...................................................................................................................... 215 Online reading platforms ........................................................................................................................ 216 Advertising in the eBook Yellow Pages ................................................................................................... 217 Part 7: End matter ..................................................................................................................................... 218 Appendix ................................................................................................................................................ 219 Index of Yellow Pages ............................................................................................................................. 221 Global eBook 2016 Main topics and structure of the Global eBook report (2016) This report provides an overview of internationally evolving ebook markets, with a unique set of data from a wide array of the best available sources, a thorough analysis and a synopsis of key global developments, and a broad set of detailed references to both global and local actors, forming a resource for anyone interested in the globalization of digital (book) content production and dissemination. The 2016 edition of the Global eBook report portrays international consumer book publishing at a critical moment. Over the past few years, a traditionally conservative industry, occupying a core position in the creative sector of today's knowledge societies, had to confront mostly declining physical sales, while the emerging digital business had caught on with force only in the English language markets, notably in the United States and in the United Kingdom, and even here was only occasionally able to compensate for the loss in print books. Since 2013, digital has shown hardly any further expansion, at least for the traditional publishing sector. Some indicators however point to a parallel shift towards global players, primarily Amazon, and to non- traditionally (independently or self-) published authors. In most of continental Europe, ebooks have stalled even earlier, while the slide in physical sales was even more radical, particularly driven by the fallout of the economic crisis of 2008. Particularly markets like Spain or Italy have been hit hardest. 2015, remarkably, has seen a process of stabilization in many markets, with independent publishers and retailers gaining ground again. Also ebooks, while often stagnant overall, have been able to occupy significant niches. In most of the emerging economies, such as China, Brazil, India, or Russia, the broadly admired surge of book markets has slowed down (in China, for instance), or become flat (in Brazil), or even has been reversed for several years (in Russia). Altogether, what we currently see is most probably the "end of the digital beginning", and the beginning transition into the next, perhaps even more challenging phase, where writing, publishing and reading morph into fluid settings, where any content, in any format, is available for almost any user - yet without much stability both with regard to who is offering what, as well as how that offer is taken in by the many fickle audiences around the world. For the 2016 edition of the Global eBook report, the challenge was to subsequently broaden our perspective, by looking at both physical and digital developments, and so with more context than in previous years, with over 50 charts and tables summarizing and visualizing complex market developments. We chose to extend our data driven analysis in several directions: Portray current market developments on the backdrop of at least 4 to 6 years of history; Look at both print and digital in direct comparisons; Widen significantly the scope, and angles, of our data analysis, notably with the help of partners from distributors and various industry observers, to gain much more specific insights into several market segments; Include a broader analysis of piracy offerings, as they allow again a broader understanding of users's digital preferences and habits; and finally, Update all the bits and pieces on market comparisons, global players, and key debates, which we had incorporated already in past years. 1 Global eBook 2016 The findings of the Global eBook report allow us to assess, on the one hand, how the main drivers of digital change in the publishing industry impact on international markets in similar ways, as self-publishing, reading platforms and distribution infrastructures become available, and as publishers in all markets have become under enormous pressure of consolidation to ever larger entities. Remarkably, this opens at the same time new opportunities for both new entrants, and smaller, independent players as well. "Ebooks" are not one thing, or format, or concept - but rather a shortcut for a wide array of options to do things differently. The Global eBook report 2016 consists of 4 main sections Publishing - print and digital - in the global context: Book publishing by key statistics in comparison to other media industries (e.g. music, filmed entertainment, games); An overview of the largest book publishing markets, plus an analysis by sector (trade, educational and STM); Comparative chapters on digital developments at the largest corporations and on the recent consolidation in the publishing industry Market close ups, detailing key figures and key developments: English language markets (US, UK); Selected European markets, notably Germany, Austria, France, (Wallonian) Belgium, Spain, Italy, the Netherlands, Sweden, Denmark, and an overview on Central and Eastern Europe; Emerging markets, notably Brazil, China, India, and Russia; Thematic chapters on key drivers and debates shaping the ebook markets: The expansion of global platforms, notably detailing developments at Amazon, Apple, Rakuten Kobo, as well as a summary of Germany's Tolino reaching out into other European markets; A significantly expanded chapter, drawing on new data sources, to shed some light on ebook developments by subsectors, by pricing segments and pricing strategies, and by comparing all this across selected European markets; A comparison of piracy platforms in Germany, France, Spain, Italy and Poland, to better understand users' preferences and changing consumption habits; Summaries of further important debates (on self-publishing, subscription platforms, DRM, and on regulation). Global eBook Yellow Pages: A listing of over 350 companies dedicated to ebooks, consisting of publishers, service organisations, distributors and aggregators, with short company descriptions and links. Extensive references to key industry sources provide direct access and links for further reading. We strongly encourage critical feedback and -even more enthusiastically- the input of information and data to improve the foundations of this analysis. About the Global eBook report 2 Global eBook 2016 The Global eBook report has been initiated in fall 2011 by the Tools of Change conferences and O'Reilly Media, and has been updated on a regular basis. Since fall 2013, the report is published by Rüdiger Wischenbart Content and Consulting (RWCC), who had developed the format and authored the reports from the beginning. Enable the Global eBook report to expand: Become a sponsor. To support the Global eBook report, we offer several - highly customizable - sponsorship opportunities. Applause to our current sponsors, Bookwire, Copyright Clearance Center, Klopotek, Publishers' Forum and Tolino! Our work has been supported also by generously allowing us to use the advanced web analytic tools of SimilarWeb, and to produce the report with BookType. We are furthermore grateful to our media partners for helping us to disseminate this report! If interested in becoming a sponsor, or to advertise in the Ebook Yellow Pages, please let us know by sending an email to ebookYP (at) wischenbart.com, or use the contact form at www.global-ebook.com. 3 Global eBook 2016 Part 1: Publishing – print and digital – in the global context 4 Global eBook 2016 Publishing - print and digital - in a global context "It’s the pace of change that caught our eye this year" We are social, 2016 A truly global overview and comparison of book publishing and other content and media industry confronts multiple obstacles, from lacking definitions of what is what, blurring distinctions between content generation and content distribution, borderlines between formats and channels, new giant actors re-defining entire industries, new platforms to access this diverse content (think 'mobile'). Consequently changing habits of billions of people, who may be affluent citizens of middle class neighborhoods, in urban agglomerations anywhere on the planet, or destitute populations who, nevertheless, through a connection of their mobile phones, have started to grasp possibilities, and techniques to access content - as information, knowledge, education or entertainment, anywhere in the world, any time. According to data compiled by the information and consultancy agency 'We are social', almost half of the world population (to be exact 46%, or 3.42 billion people) have access to the Internet today. Social media are used by some 2.31 billion people (equaling a global penetration of 31%), with 3.79 billion (or 51%) gaining access through a mobile device. In Nigeria, 82% of all web traffic is mobile, in India 66%, in Spain 32% - as compared to 28% in the UK, 27% in the US and 22% in Germany. Overall and worldwide, one third of all web traffic was mobile in 2015 (up from 17% in 2013, and 0.7% in 2009). These, and many more similar numbers highlight one simple story: What is going on today, is not controlled, and (exclusively) shaped anymore by those old stakeholders and gatekeepers that have been used to define content, media, or format. The publishers, media moguls, or old school network captains navigate in a sea that is not theirs alone anymore. Not at all. This must be clearly stated if, nevertheless, for the purpose of this report, we focus on books, publishing and reading, as if that rift had not really occurred already, and as if, to a degree at least, books were still that singular container and format that it had become over the past two and a half centuries. Looking specifically at this one industry here, and how it is transformed by digital and global, and by new ecosystems claiming to pretty much replace that old industry altogether, is justified and reasonable, in our understanding, for two modest reasons: Book writing, publishing, and reading turns out to be stubborn if not resisting to change at all, so at least insisting on having its own ways of transforming; and A close look at this one sector perhaps allows to identify some valid insights, as a case study, into the confusingly complex transformation of what happens more broadly between creators and their audiences, and the facilitating industries between them, today. Book publishing in the context of other content industries Book-publishing accounts for worldwide revenues of ca. €114 billion, according to an estimate which we conducted for the International Publishers' Association in 2013, based on numbers for 2012 (equaling $150 billion at the exchange rate between the euro and the dollar at that time). This value includes trade and educational publishing as well as professional or scientific publications, and is roughly consistent with other estimates, e.g. from PriceWaterhouseCoopers, of slightly $100bn, yet with a much more narrow definition of publishing, with only trade and educational book-publishing included. 5 Global eBook 2016 The recent decline in book markets in North America and Europe coincided with growth in emerging countries (notably China and India), so that the total global book market has remained flat at those levels. With the recent slump in emerging economies, this may now change. Book-publishing occupies a central role in today's global knowledge society, encompassing books as a format relevant for education, scientific research as well as entertainment and leisure reading, and hence it comes as hardly a surprise that the overall size of it surpasses most other content media,in particular music, games, or even filmed entertainment. Only the worldwide TV market is significantly larger than books. A comparison of selected content media industries. (Mostly data for 2013. Various sources, with mostly from sector trade organizations, compiled for this report) However, in the digital transformation, the various segments of the content and media industries evolve very differently. The McKinsey Global Media Report is tracking for some years now how the various sectors in media and content evolve, and compare. 6