The evolution of ebook markets is shaped by complex forces, some local, some global, as shown in the introduction (see Part II).
In addition, publishers -but also authors, as well as the reading public, the consumers- shape the ebook markets through various choices and strategies. Several key drivers, and debates governing these choices are framing what, in fact, works and what doesn’t.
Each of these sets of parameters and combinations thereof will not only affect each market’s ebook evolution but also frame the interplay of domestic and global factors as they encourage either globalizing or more differentiating forces.
The aim of this chapter, though, is not to portray each of these factors in every detail for every single market but, rather, to develop an analytical framework to understand the driving forces, the resulting patterns, and the resulting impact of these forces as they are currently reshaping the business of publishing and the culture of authorship and reading.
By the end of 2012, with ebooks having become a normal part of the larger European book markets, a number of obvious questions are emerging. These questions must be answered to identify and asses the driving forces and consumer habits behind the evolution of the book markets and to compare the patterns of print and digital editions.
In the second half of 2012 and in early 2013, both e-readers and tablets gained popularity everywhere at a fast pace, resulting in an expected increase in book downloads.
A few spectacular blockbuster titles, notably the erotic trilogy Fifty Shades of Grey by E.L. James, received such widespread media coverage that they must also have been downloaded in great numbers. By January 2013, The New York Times reported 40,000 digital units sold in France alone — a number that must be compared to 900,000 printed volumes (The New York Times, January 16, 2013). This would give ebooks a share of 4.4% over print sales, which is clearly higher than the estimated 1 to 1.5% of the market share that ebooks were expected to account for in the overall book market in France by late 2012. However, the comparison also hints at the fact that, so far, ebooks are almost all fiction —and in some significant cases self-help and how-to books— with the strongest bestsellers accounting for the lion’s share.
The French translation of Fifty Shades of Grey cost a substantial €11.99, compared to £3.46 in the UK and $8.77 in the US. The German Kindle edition was sold at €9.99, the Italian at €6.99, and the Spanish at €9.49. In Sweden, readers paid a mark-up as if the book were strong liquor, given the hefty price tag of 137 kronor, or €15.80.
Going further into the details reveals rather more confusion and less clarity about the driving forces and policies behind such differences. Worse, any attempt to understand how ebooks sell across various European markets and editions is hindered by several obstacles, each highlighting diverse features of how these markets are shaped by different forces and contexts. Hence, the goal of this comparative analysis cannot be to bridge those differences and complexities but instead to identify some characteristics and to map certain patterns while being clear about all the remaining uncertainties.
First, aside from the UK and, to a certain degree in Germany, no authoritative ebook charts have been established at this point. Instead, we had to work with lists proposed by various leading online platforms and juxtapose overlaps as well as differences among them.
The simple question of asking what a bestseller is in ebooks and what it costs is leading to a set of complexities.
Across markets, two basic approaches take shape. One is promoted by Amazon on its localized sites for Germany, France, Italy, and Spain that provides the sales rank for ebooks by units sold, regardless of the retail price, as long as the book is not offered for free. Long novels at €14.99 and digital shorts at €0.89 live side by side. Self-published books, often priced aggressively at €0.99 or €2.99, occupy a significant number of top positions.
By contrast, in Germany, Börsenverein publishes monthly bestseller charts, and the top 10 fiction titles sell at an average price of €10.94, with no discounting being allowed, as the concept of fixed retail prices applies to ebooks, too (list for July 2013, the most recent available as of September 2013, compiled by Media Control on behalf of Börsenblatt.) At the German Amazon site, in September 2013, the average price for the 10 bestselling ebooks was €7.14, with six of the 10 ebooks priced at less than €4.00 and Amazon allows both self-published titles as well as digital books from traditional publishers’ releases. The top 10 fiction ebooks at Weltbild, the second most popular online site for books in Germany, average €13.19, due to the presence of high-priced titles by Dan Brown (Inferno at €19.99) and John Grisham (The Racketeer at €18.99), as similar to Börsenblatt’s list, selfpublished books are excluded, but a few ebooks from Weltbild’s own exclusive catalogue are included (e.g. Brenda Joyce books at €4.99). The gap in the average retail prices for ebooks widens considerably when the sample is extended. For ranks 11 to 20, at Amazon, the average price falls to €3.99, as the share of self-published books increases, while at Weltbild, with an average of €9.64, the drop in prices is less dramatic.
A strong competitive pressure builds, as Amazon in particular is seamlessly including low-priced ebooks with titles from publishers whose outspoken policy it is in markets such as Germany to keep prices for ebooks close to the level of printed editions. It is foreseeable, that over time, even in markets where book prices are fixed by law, as is the case in Germany and in France, publishers will see their pricing strategies seriously challenged by Amazon’s policy.
Country | Top 10 Amazon Kindle | Top10 leading domestic platform |
Germany | 7.14 | 13.99 |
France | 5.08 | 9.79 |
Spain | 6.88 | 6.74 |
Italy | 6.99 | 6.19 |
UK | 3.15 (£ 2.65) | not collected |
The disparity in average price levels between Amazon and their competitors among local online platforms shows considerable variations between markets and seems to highlight, for each country, how strongly local publishers currently seem to fight to keep ebook prices up.
This can be illustrated even more clearly in a comparison between the prices of current bestsellers in print, and their respective digital editions and the evolution of those price levels over the past two years.
In Germany, for instance, efforts by publishers to keep ebook prices close to those of print editions seem to be successful thus far. The average price difference between print and digital edition between late summer 2011 and 2013 reflects the customers’ readiness to buy expensive ebooks in Germany and in Sweden, where the average price of the top 10 in fiction reaching the staggering level of just under €17.00, while the respective print editions are priced at €20.52 in Germany and €21.34 in Sweden. Obviously such a strategy comes at a risk, as average prices for ebooks continue to slide in all markets, including in Germany (in 2012 at €8.61, according to Media Control), and in France, where 54% of all ebook titles are sold at €10 or less. ( Livres Hebdo, 23 August 2013)
By contrast, ebooks in heavily discounting UK bookshops and in crisis-stricken Italy and Spain cost only half of German or Swedish bestseller prices. The fact that Spain has a fixed book price system, the UK stiff competition over pricing, and Italy´s position somewhere in the middle do not seem to play a major role in differentiating these markets.
Similarly, discounts for ebook versions of titles that are the top sellers in print show remarkable variations. A reader in Germany can only save some 17%, on average, in the top segment, while his Spanish peer pays only half by choosing an ebook over print -which may contribute to the strong recent dynamics in the Spanish ebook sector. France is positioned between these extremes.
These differences not only highlight the very broad range of prices and discounts among ebook frontlist titles but also emphasize that ebooks, even in the early stages of their emergence, as in Germany, have a strong tendency to dissolve the notion of books as one integrated, homogeneous market segment.
By looking at top-selling titles around Christmas 2012, we can observe that print and ebook charts are drifting apart, as if they reflect two different continents of reading preferences.
Aside from current erotica, in a mix of Fifty Shades of Grey, Silvia Day’s Crossfire series, and scores of subsequently self-published titles, only a few books from January’s print bestseller lists tended to figure on the ebook charts, notably Ken Follett’s Century, J.K. Rowling’s Casual Vacancy, Life of Pi by Yann Martel, which hit European movie theaters around Christmas, and some top-of-the-line Nordic crime novels by Danish Jussi Adler-Olsen and Jo Nesbø. The strongest print books per country, such as Jonas Jonassen’s Hundred Year Old Man in Germany and the UK, the works of local crime writer Andrea Camilleri in Italy, and María Dueñas´ with Misión Olvido in Spain (priced at €12.34!) are sure to be found side by side with ebook editions in the top ranks.
By late summer of 2013, the rift seems to have widened. Only a very few authors have managed to be represented in both the top 10 for printed fiction in the analyzed major European book markets and the respective Amazon chart, or at least in those of domestic platforms such as Weltbild in Germany (two women crime authors, German Rita Falk and British Jojo Moyes) or Casa del libro in Spain.
A rather complex picture evolves when looking at the publishing houses behind the top-selling titles. Ebooks are currently seen by many, especially in the largest publishing houses, as an additional channel to push top-selling titles into the market. It is no surprise to see these globally acting groups, such as Random House or Hachette (coincidentally the publishers of Fifty Shades of Grey in English, German, and French) having a strong presence in the charts.
Data for the top 20 ebook bestsellers in 2012 from nine European countries and the US (provided by Kobo for this report’s February 2013 update), may not be representative of all these markets, given the online retailer’s different market share for each market. However, it provides a valuable basis for some informative observations and comparisons (the data cover Denmark, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, the UK, and the US).
Across these 200 ebook title entries in ten markets of different sizes and primary languages, 57 can be attributed to various imprints of Random House, of which 35 are editions of E.L. James’ Fifty Shades of Grey trilogy, in their US, UK, and German editions.
Scholastic comes in second, with 20 entries, all but two of which are variants of the US edition of Suzanne Collins’ Hunger Games trilogy, which the New York-based house successfully sold, in English, across the Scandinavian markets of Denmark, Sweden, and Norway.
George R.R. Martin comes in third with A Dance with Dragons, again part of a series, which sold well across all European markets in print but was represented in the Kobo ebook charts only in the English-language edition across Scandinavia as well as in Spain. The book is followed by Ken Follett’s Giants, with 10 entries, in English, German, and Italian translations.
Examining some of these ebook markets more closely, it turns out that, in Germany, France, and Italy, the respective market leaders in print book publishing can greatly expand their impact on the ebook charts. In Germany, seven of the top 20 hits for 2012 came from Random House (notably Fifty Shades of Grey, but also books from domestic authors, such as young adult writer Charlotte Link). In the French top segment, Hachette holds 9 out of 20 positions, while Mondadori holds 12 out of the 20 top ebook titles.
Remarkably, in each market, there is also a strong number two, with Luebbe in Germany (an independent publisher that aggressively and successfully positioned its ebooks in the emerging market) matching Random House with 7 of the 20 top ebooks in 2012. In France, the gap is much wider, as Editis (owned by the Spanish Planeta) and the independent Actes Sud (the publisher of Stieg Larsson) each has three titles in the highest ranks.
The outcome for Spain, with regard to Kobo’s charts, is more difficult to assess. Twelve of the top 20 positions are held by ebooks in the English language, with the authors including James Patterson, Karin Slaughter, Ken Follett, and Sylvia Day, aside from the expected E.L. James and Suzanne Collins. Perhaps, a certain bias comes into play, as the localized Spanish platform of Amazon might cater more broadly to the Spanish audience.
In all of Scandinavia, Kobo’s 20 bestselling ebooks are in the English language, while in the Netherlands, domestic writers prevail. It must be assumed that these sales patterns reflect the size of the available catalog in each of these languages.
As for the UK, The Bookseller compiled and compared print and ebook charts by volume for 2012, resulting in a detailed overview of the top 50 titles. For the first ten months of the year, ebooks accounted for some 13% to 14% of all book sales in terms of units, but given their significantly lower retail prices, they accounted for a more modest 6% to 7% of revenues. The really interesting findings from the chart come not from the very top segment, which is, as expected, dominated by the Fifty Shades of Grey (with ebook volumes between 1.6 and 1 million units) and Hunger Games (between 300,000 and 400,000 units), but from the following ranks. J.K. Rowling sold a comparatively low 59,413 digital copies (and slightly fewer than 400,000 in print) in the 52 weeks to 29 December. How much ebook sales differ by genre and by reader age is well illustrated by romantic fiction author Jojo Moyes, whose new book, Me Before You (ranked 22 in print), sold 279,349 copies in print against a stunning 207,000 in digital. By contrast, 266,177 print copies of the autobiography of rock legend Rod Stewart, ranked 23 in print, were shipped to fans, compared to 19,057 in digital (“Bestselling books of 2012,” The Bookseller, January 11, 2013).
Still, with all the possible oddities caused by the limited data pool behind this analysis, it becomes clear that, at least in the early stages of an emerging ebook market, a small number of smash hits can exert incredible control.
However, the exceptions to this rule should not escape the observer.
In Germany, for instance, self-published author Jonas Winner managed to get two of his Berlin Gothic titles in the top 20 and in several markets, a few companies (some reposiitioned old houses and some newly created specifically for the digital challenges ahead) are succeeding in the tough game.
Some medium-sized houses opted early to have a role in digital publishing, such as Gallimard in France, Oetinger in Germany and Grupo editoriale Mauri Spagnol (GeMS) in Italy. In the Netherlands, De Arbeiderspers | A.W. Bruna Uitgevers developed a relevant (and in various regards innovative) role in the ebook sector for its old brand.
2012 has also seen the ascent of several new brands or old houses with a new, decidedly innovative emphasis on digital publishing, which is again reflected by the presence of their titles in the top segment. Examples include Bastei Lübbe in Germany, a publishing company founded in 1949, mostly known for their pulp literature in the subgenres of romance, crime, and the Wild West but recently transformed into one of the leading digital houses for various kinds of popular literature in digital formats —a conversion comparable to that of Canadian Harlequin.
In Spain, the literary press Ediciones B of Barcelona opted to create a new company in 2011, B de Books, a digital-only publisher that releases 300 ebooks (of which 250 are new releases) plus four apps per year, aggressively priced between €1.99 and a maximum of €9.99, without DRM.
The rejection of DRM aligns B de Books with the French Numeriklivre, another 100 percent digital publisher, specializing in romance, science fiction, fantasy, young adult literature, and essays.
For nonfiction, the French Marabout, founded in 1949 and a leader in gardening, practical advice, and self-help books, is committed greatly to extending its reach into digital markets.
All three companies have found a way to compete directly and successfully with the big houses for the nascent e-reading audiences in languages other than English, and it will be of high interest to follow the market presence of these and similar innovative ventures in the near future.
As recently as the summer of 2011, a headline such as the following could still appear: “German Self-Publishing, Where Innovation Meets Angst,” pointing to the country’s aversion to risk (Amanda DeMarco, Publishing Perspectives, August 4, 2011). A year later, an initially self-published title, Fifty Shades of Grey by E. L. James (albeit now in an edition published by Random House) was by far the defining book event of 2012 in Germany just as almost anywhere else, and a German self-published author made the headlines with Liebe, Sex und andere Katastrophen—Meine abenteuerliche Suche nach dem Mann fürs Leben (Love, Sex and Other Catastrophes—My Adventurous Quest for the Man of My Life), a book that blends well in the current flood of romance fiction. A mere 20,000 ebook copies sold at €3.49 were enough to generate broad media coverage exploring the new model for success. “Never had it been easier to publish a book” was the new gospel sung by mainstream media such as Der Spiegel (Mein Verlag und ich July 17, 2012).
The Angst article and the bestselling Love, Sex, and Other Catastrophes book originated at epubli, the print-on-demand and self-publishing platform of the Holtzbrinck group, Germany’s second-largest publishing venture, but not the market leader. This position is held by BoD (or Books on Demand), the service arm of Libri, Germany’s largest wholesaler by far, which has explored customized solutions to production for 10 years, claiming a market share of 80 percent in the print-on-demand segment with a backlist of 420,000 titles and some (10,000 new releases per year).
By early 2011, author Amanda Hocking had sold one and a half million copies of the self-published version of her debut work My Blood Approves, which was then picked up by traditional publishers for global sales (Livres Hebdo, April 25, 2012). In the summer of 2012, four self-published titles were on the New York Times bestseller list (The Guardian, August 3, 2012).
However, self-published ebooks quickly came to prove how powerful the new concept of publishing was not just within the huge English language arena but allowing even authors from other countries and linguistic backgrounds to develop an international audience.
German Jonas Winner, an author for television, holding a PhD in game theory, and a talented promoter of his work, decided to release his 1200 novel Berlin Gothic as a series of seven ebooks through Amazon’s self-publishing platform, Kindle Direct Publishing and the attached service arm Amazon CreateSpace. Between September 2011 and February 2012, he sold 55,000 copies of the books or, on average, 1,000 every day, earning for each one 30 cents out of the retail price of €0.89.
Another line of service, Amazon Crossing, is technically not a platform for self-publishing, but the US giant’s own publishing division, though it offers another channel for authors to jumpstart their international career while bypassing the traditional gatekeepers of literary agencies. For German writer Oliver Plötzsch and his novel The Hangman’s Daughter, which was published by Ullstein, a conventional publisher in the German original, going through Amazon Crossing for the English edition meant all the difference from having a midlist title to having sold over one million copies in the US by the summer of 2013. (buchreport, 18 June 2013)
In 2009, BiblioBazaar, a US-based company in the new self-publishing segment, was already producing 272,930 titles (according to Bowker, quoted in Publishers Weekly, April 15, 2010). In 2011, BiblioBazaar alone (processed 773,857 ISBNs).
In 2012, Kelly Gallagher of Bowker Market Research proclaimed the “golden age of self-publishing,” with 211,269 titles published in 2011 (up from 133,036 in 2010), and by the summer of 2013, Bowker reported that 12% of the total ebook market and 20% of the genre segment, comprising science fiction, romance and humor, were self-published titles in 2012 (quoted in The Guardian, 11 June 2013).
However, self-publishing, notably with regard to ebooks, reaches far beyond the fulfillment of production services for individual authors. It has grown into a significant segment of the publishing industry altogether. Since 2010, global leaders from both the distribution and the publishing side of the business have launched or acquired major operations targeted at the quickly expanding segment.
By mid-2012, Amazon’s CreateSpace was seen as the segment’s market leader, publishing 57,602 titles, followed by AuthorSolutions with 41,605 (Publishers Weekly, June 4, 2012). Of these titles, 45% are fiction and 41% are also released as ebooks (Bowker, June 5, 2012).
Apple through its platform iBooks Author focuses primarily on illustrated works, enriched by embedded multimedia, as in the case of educational materials or cookbooks.
Kobo expanded its branded self-publishing service WritingLife, as did Barnes & Noble by rebranding its PubIt service as NookPress, and all these efforts seem to be rewarding for the platform operators, as reportedly, 25% of all Nook sales are self-published ebooks.
The market research firm Bowker has launched a dedicated resource for self-published authors, which includes “tools, advice, and resources for navigating the publishing process, serving a burgeoning market of authors who are bypassing the traditional publishing route to take total control of their book projects.” (Bowker press release, May 20, 2013)
Authors are, however, not targeted only by online book retail and distribution platforms. In addition, leading international publishing groups have stepped up their efforts to offer alternative propositions to their authors to their conventional title selection and editorial and marketing services.
The afore mentioned AuthorSolutions was acquired by Penguin in the summer of 2012 for $116 million (Publishers Lunch, July 19, 2012). With BookCountry, Penguin also runs a community platform for exchange between authors.
In addition to such platforms from the largest international actors and other US-based companies that broke the ground for digital self-publishing -such as Lulu- scores of more local and more specialized authoring and book creation solutions have recently emerged, and many combine the operation of book production and distribution, with the creation of book and reading communities.
US based Smashwords, claiming to be “the largest, global, indie, self-publishing digital outlet”, has announced plans to expand into other territories and languages. (Publishing Perspectives, April 10, 2013)
In Germany, the range of platforms and community in the self-publishing segment has formed a thriving sector so fast that it requires its own specialized portal for guidance, the Selfpublisher Bible. In a first survey, the bible’s Matthias Matting found in June 2013 that one out of four self-published German authors had so far published only one title, 30% had released between 3 and 5 books, and 91% publish ebooks, of which 60% use the services of a specialized distributor to bring their titles to the market, as almost half became involved in authoring their own books to earn money.
BOD -or books on demand-, founded over 10 years ago by wholesaler Libri, has grown into a complete service for self-published authors, as has ePubli, a platform operated by the Holtzbrinck group, which also combines print as well as ebook creation. ePubli has recently announced plans to expand internationally, with a first branch set up in the UK.
Germany-based Xinxii claims to be Europe’s leading distribution platform for self-published books, and operates services in Dutch, English, French, German, Italian, Portuguese, Spanish and, since early 2013, Russian.
In the Netherlands, the leading local online retailer, BOL.com is involved in the launch of Bravenewbooks.nl, together with the self-publishing portal Mijnbestseller.
In France, Mon Best Seller is a service offered to authors to publish their books free of charge, and readers can read these books free of charge online. Additional services for promotion and on-demand printing must be paid for. A similar model, characterized as “free publishing”, is provided by TheBookEdition.
In Spain, Roca Editores, one of the founding partners of ebook distributor Libranda, has launched a complete service for the self-publishing and distribution of ebooks.
With Bookworks, an organization specializing in self-help for self-published authors, has been set up at first in the US, yet with a global vocation.
The litigation and subsequent ruling in mid-2013 involving Apple and five of the six largest US publishing houses was certainly the most widely publicized and debated legal case relevant to ebooks. In July 2013, a US federal judge found that Apple violated antitrust law in helping raise the retail price of ebooks, saying that the company “played a central role in facilitating and executing” a conspiracy with five big publishers over the “agency model”, which had ensured that publishers, not retailers, were setting retail prices for ebooks. (For excerpts of the ruling, see The New York Times, 10 July 2013, the full ruling is documented by Publishers Weekly). A similar investigation involving European publishers has been launched by the European Commission, yet with no ruling so far. For more details on the debate, see the chapter on United States.
In several European countries, book prices are regulated and subject to a reduced value added tax (VAT), yet these regulations do not automatically apply to ebooks. In France, legislation to apply fixed prices to ebooks as well was introduced in 2011. In Spain, the existing Book Law is understood to cover ebooks as well as printed books. In Germany, Börsenverein —the professional association for publishers and booksellers— is lobbying the federal government for an extension of the law of fixed prices for books to ebooks.
The problem with the VAT is that, according to the European Commission, books are considered products, but in the case of ebooks, the consumer is acquiring a license. This difference results in significant surcharges for ebooks and discrimination of ebooks versus printed books. A complex discussion is currently taking place among both national trade associations as well as the Federation of European Publishers (FEP), with publishers arguing in favor of extending reduced VAT rates to ebooks, notably to “ensure that professional published content, regardless of its format or method of access, receives a fiscal treatment that recognizes its contribution to a wide range of goals in social, cultural, and economic terms” (reply by FEP to a Green Paper of the European Commission on VAT, May 2011).
In France, legislation was introduced, effective January 1, 2012, to both include ebooks under the fixed price regulation and to apply reduced VAT rates to ebooks, with the latter application resulting in an instant reaction from the European Commission, which investigates whether such legislation is compliant with European law. But the French government instited on maintaining their position. (ZDnet, ZDnet February 22, 2013; for further details, see the earlier discussion on France.)
Especially in France and Germany, publishers’ associations (SNE and Börsenverein), authors’ representatives, and individual publishers (Hachette, Gallimard, La Martinière, and others) have actively participated in legal actions in New York against Google’s digitization of copyrighted books and the proposed “Google settlement,” which captured the attention of both the media and the interested (professional) audience as well as politicians, to the point of the conflict of the “book professionals” versus Google being broadly identified with the broader topic of emerging ebooks. Most of these legal battles have since been settled.
The next frontier in the battle over change is pricing, as well as amendments to copyright legislation.
A policy debate that lasted several years over exceptions to copyright law has come to a consensus in the form of the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled, concluded and signed in June 2013. (See the full text at the World Intellectual Property Organisation, WIPO) The preceding discussion had opposed, in a nutshell, developing countries arguing for the benefits of certain exceptions, notably to allowing visually impaired people to more easily access books, and publishers lobbying to limit such exceptions to a strict minimum. (See here the position of the International Publishers Association, IPA)
The debate on copyright has become a mainstream controversy in Europe, and most strongly so in Germany, in the first half of 2012. While the German trade association Börsenverein declared in June 2012 that copyright legislation needs to be adapted to requirements of the digital age, other professional organizations of the industry, notably in France, strictly oppose such action, in the expectation of amendents watering down current policies and legislation.
The complex debate revolves around a number of cases and issues, including the right of producing a copy of a copyrighted work for private usage (Privatkopie) in Germany, to introducing US concepts such as fair use to European law, or pursuing consumers infringing copyright by banning them from using the Internet (according to Hadopi law in France).
Also, the huge discrepancy of VAT applied on printed or digital books (in the extreme case of the UK being 0% on print against 20% on digital) is a terrain of harsh controversy. While some articulate the concern that too much lobbying for lowering VAT on ebooks to print levels may blow up preferential rates for books altogether, others argue in favor of extending the preferential regime to a reduced VAT rate on all cultural spending.
The approach by the European Commission is far from univocal at this point. On the one hand, the Commission has started an investigation, notably with French publishers, on pricing agreements that may infringe competition terms—echoing the actions by the US Department of Justice (DoJ).
On the other hand, in early summer 2012, the European Commissioner for digital, Neelie Kroes, called on decision makers in the publishing industry to help her on Europe’s Digital Agenda to bring down trade barriers for a seamless exchange of digital content such as books, arguing for adjusting the VAT hurdles, and talking publishers into embracing digital strategies much more boldly (Digital Agenda for Europe).
It has been argued that ebooks will give a big push to English reading around the globe, for the simple reason that ebooks travel at low cost over long distances, crossing borders seamlessly, once globally acting companies have set up the required infrastructures and made the required legal arrangements per each target market, and also because early adopters of ebooks are the strongest readers and the most worldly, the most frequent travelers, and the most linguistically competent consumers. Although at this stage no data are available as evidence for this assumption, some indicators can nevertheless be identified.
In countries such as the Netherlands or Sweden, English-language print books have become increasingly popular with readers; such is also the case in several Central and Southeast European countries, including Slovenia, to the point that translation of English-language fiction into local languages has been reported to be challenged by imports of the original editions. For details on English reading in that region, see at The accelerating impact of English reading
In Germany, the by far the largest wholesaler, Libri, had successfully started to expand its foreign-language packages to retailers almost a decade ago, as could be seen in the ever-growing foreign-language selections in the largest chain stores, notably Thalia. Although these foreign-language shelves used to be occupied predominantly by literary classics, it is now the latest releases of bestselling fiction from the US and, to a lesser degree, the UK that constitute this segment’s profile.
More recently, an increasing number of online shops have added dedicated English catalogs with an increasing number of titles, even in countries like France, Italy, or Spain, which were traditionally more difficult to access for foreign-language reading.
Amazon, which expanded its presence with localized online stores in Italy and Spain in 2011, is strongly promoting its English catalog as well as increasingly broad offerings in other languages, both in print and for the Kindle.
But the strongest force in the emergence of an international web of English reading is probably Amazon’s integration of its ebook catalog, with the Kindle reading platform and an increasingly uniform pricing policy ready to flatten the differences in what an ebook costs a consumer across markets.
Throughout media history, the emergence and penetration of markets by new media have been intimately intertwined with the advent of piracy and challenges to the current business practices of those in control of the respective old media. Providing an example from the early days of the movie industry, a recent, highly authoritative study says bluntly, “Piracy was, we have seen, absolutely central to the birth of the film industry.” (Peter Decherney: Hollywood’s Copyright Wars: From Edison to the Internet. Columbia University Press 2012) In fact, piracy and the subsequent legal battles were instrumental in the formation of the movie industry. The studios that dominated the new-born industry for decades after the outcome of those legal battles owed their strong position in large part to those early innovators and explorers of the new technology of film who, in the end, had been labeled as pirates. In practical terms —which are not necessarily identical to legal considerations— the label piracy can refer to different issues under different circumstances.
In the context of fragile, emergent, under-regulated, and under-controlled markets such as those in large parts of the Arab world or, similarly, in Russia, piracy can be a direct threat to the precarious infrastructure of the book business. A good example of this is Lebanon’s (and the Arab world’s) first online book shop Nil WaFurat. Its founder, Saleh Chebaro, explained in 2012 during an interview for this report how the upswing in the consumption of digital media content paradoxically turned out to be essential to the further development of this platform. With the advent of smartphones and tablet computers and with the spread of mobile access to the Internet, a rapidly increasing number of consumers in Arab countries gained daily access to music, movies, social media, and text on their devices. Most of this content has become an integrated digital stream of digital media —with the exception of books. Because ebook publishing in the Arab language is still in such an early stage, digital books are accessible only as pirated copies. As soon as a book shows initial success with readers, pirated versions appear within days, both digital (in PDF format) and printed. To make the situation worse, many of the most popular platforms for the distribution of various digital content, such as Apple’s iTunes and equivalent local channels, will not carry many Arab language books alongside their extensive selections of music and movies. As a result, a relatively well-established platform for the distribution of books online, such as Nil WaFurat, suffers not in spite of but because of the expansion of digital media consumption.
However, the Arab world is not a homogeneous market, even with regard to piracy. In the United Arab Emirates (UAE), the local production of pirated ebooks is not considered an imminent threat to innovative businesses. The government of the UAE would like the entire country to become a regional leader in the development of a “knowledge society.” This ambition is reflected in the recent emergence of several ventures —such as Rufoof and Qordoba— as well as the funding that such initiatives can raise from both local and international sources (an option hardly practical for a company headquartered in Lebanon, such as Nil WaFurat), disregarding the Levantine’s old tradition as a hub for books and publishing throughout the Arab world.
In addition, the authoritative practices and strategies with regard to piracy —or, more broadly, with regard to creating the legal framework to cope with the challenges from digital media— is not well defined in any of the emerging markets.
While several pieces of international legislation relevant to piracy have been abandoned (the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) in the US and the Counterfeiting Trade Agreement (ACTA) de facto at the European level), a wave of studies and practical initiatives have hit the media over the past 12 months or so, with little consensus on the parameters, drivers, or concrete goals of these activities.
The issue was at the top of the agenda for industry organizations across the US, Europe, and the rest of the world (see the AAP at PW, March 15, 2012). New legislation has been introduced at the national level in a number of countries, including Spain (under the acronym of SINDE, for a law on the “durable economy, aiming at reforming copyright Spanish law altogether”; Livres Hebdo, March 1, 2012). At the same time, courts at the European level have limited the direct responsibility and liability of provider platforms for hosting illegal content on their servers. [4]
One challenge for the book industry is that the broader debate on copyright and infringements is predominantly driven by the movie and music industry, thereby sidelining issues specific to books and reading. In many statistical overviews, ebooks are treated as a niche domain, without the acknowledgment of the factors specifically affecting this segment. For instance, due to the small file sizes of ebooks in comparison to audio MP3 files or digital video, peer-to-peer (or torrent) sites play an insignificant role in the distribution of illegal ebooks, compared to file sharing and one-click-hosting (OCH) sites.
In addition, the measurement of the number of downloaded items must be handled differently for ebooks, as the consumption of an ebook is much more time-consuming than that of a piece of music. In return, for some markets with particularly high penetration rates of piracy, such as in the Arab world, huge catalogues of illegal digital copies of ebooks, together with links to filehosting sites, are available on legal platforms such as Facebook, providing an arguably better consumer experience than any of the legal sites in the region.
However, even for well-documented markets such as Germany or France, for a number of reasons, no widely accepted consensus has emerged as to the scope and impact of piracy with regard to the emerging ebook market, or for the best practices to act against offerings of illegally digitized content.
Germany, one of the leading content markets outside the English realm, was rattled throughout the first half of 2012 by controversies related to copyright and to practices considered controversial with regard to current law on several levels. A seemingly technical niche debate about the international Anti-Counterfeiting Trade Agreement (ACTA) did not become a front page topic until it was given up, at least in its current form, by both the German government and the European authorities. It split society into two sides, with Börsenverein lobbying for the agreement and a growing political majority considering it a threat to civil rights. The very term pirate experienced an about-face, as a new political party even ran in the parliamentary elections in fall 2013 under the name of the Pirate Party. After initially broad media attention, the campaign had little success, but illustrated well a widening gap in the public comprehension of what is right and what is wrong with regard to copyright.
Such oddities have led law professors to acknowledge that copyright has become a battleground in fundamental regards: “In legal terms, rights owners, and notably those belonging to the copyright industry, have many rights, while users have very few,” argued German law professor Karl-Nikolaus Peifer. “Yet users have in fact all practical possibilities to access the content [that they long for]” (quote from an interview with Peifer, “Das digitale Urheberrecht steht am Abgrund” [Digital Copyright Is at the Brink], brandeins, December, 2011). Experts such as Peifer argue that the law in its current form cannot resolve the resulting conflict.
With regard to digital content available on the Internet, many recent studies suggest that piracy “is common” (SSRC, the American Assembly, Columbia University, read more here). Piracy is clearly ubiquitous in the developing world (The Media Piracy Report: Media Piracy in Emerging Economies), yet only imprecise data on its scope and the effective economic damage are available. In the case of ebooks, a detailed assessment is even more difficult, as the ebook market has a history of only a few years in the US and the UK and is only just emerging in most European countries Both data and methodologies for analysis are currently limited.
In Digital Opportunity: A Review of Intellectual Property and Growth, released in May 2011, Ian Hargreaves summarized his findings (page 10):
No one doubts that a great deal of copyright piracy is taking place, but reliable data about scale and trends is surprisingly scarce. Estimates of the scale of illegal digital downloads in the UK ranges between 13 percent and 65 percent in two studies published last year. A detailed survey of UK and international data finds that very little of it is supported by transparent research criteria. Meanwhile sales and profitability levels in most creative business sectors appear to be holding up reasonably well. We conclude that many creative businesses are experiencing turbulence from digital copyright infringement, but that at the level of the whole economy, measurable impacts are not as stark as is sometimes suggested.
As early as 2009, Brian O’Leary highlighted the need for more data to differentiate clearly between the fact (or “instance”) of pirated content available on the Internet and its impact on publishing and readers, proposing a differentiated model for the understanding of piracy in a wider context of freely available content:
The potential loss of sales suffered by the most popular authors is more than offset by increased visibility (and presumably sales) afforded less well-known authors when their content is made available digitally (Impact of P2P and Free Distribution on Book Sales: Tools of Change for Publishing Research Report, 2009, page 23).
This model aims to replace the popular binary understanding (good vs. bad) with a more nuanced approach, differentiating between a white market, in which content is created, marketed, and sold; a gray market for the promotion of a title and author, carrying a risk of pirated content “but accompanied by a quantifiably better result”; and an (illegal) back channel, “in which content is traded and consumed without fair compensation for its authors or publishers (resulting in lost revenue)” (O’Leary, 2009, page 25).
The claim that piracy is not automatically synonymous with pirated content being a substitute for purchase has also been discussed widely with regard to other digital content, notably music, and these arguments are often relevant to the current debate on ebooks and piracy (see The Lefsetzletter).
Regrettably, the limited available research on ebooks and piracy in continental Europe —notably Germany and France— so far focuses primarily on the simpler model of a black-and-white juxtaposition of legal and illegal downloads without fostering a more complex analysis of driving forces and the resulting effects on the emerging ebook environment. This study can only summarize the initial research and related critical debate.
Large publishing groups have successfully launched coordinated actions to shut down major piracy sites carrying books for which they owned the rights. For instance, in February 2012, two share-hosting services, www.ifile.it and www.library.nu, which offered a library of 400,000 ebooks for free illegal download, were shut down in a novel approach coordinated by both the International Publishers Association (IPA) and Börsenverein, together with a group of publishers including many of the leading houses in scientific and professional publishing: Cambridge University Press, Elsevier, Pearson Education, Georg Thieme, HarperCollins, Hogrefe, Macmillan Publishers, Cengage Learning, John Wiley & Sons, the McGraw-Hill Companies, Oxford University Press, Springer, Taylor & Francis, C.H. Beck, and Walter De Gruyter (The Bookseller, February 2, 2012).
The strategy of concerted action for tracking pirated works in illegal online libraries and engineering the shutdown of such sites was pioneered by the British Publishers Association (PA). Introducing the Copyright Infringement Portal (CIP), the PA launched a dedicated web service for its members that crawls the Web on a daily basis to track titles that have been listed by the service’s customers. Whenever a title is identified as being offered for download without the authorization of the rights holder, a takedown notice is sent to the webmaster of the concerned site. To both increase the impact of the service and promote its effectiveness, the CIP displays on its home page detailed statistics about its crawling activities, the effective number of titles that have been cleared successfully, and the illegal hosting sites with the best and the worst track records of compliance.
In a brochure issued by the PA, takedown rates were documented by country, with compliance rates of over 90% for territories and countries such as Hong Kong, Gibraltar, and Cyprus and significant levels for countries such as Russia (71.69%), China (65.75%), and Ukraine (60.69%).
In 2013, the French publishers association, Syndicat National de l'Èdition (SNE) decided to license and adapt the UK infringement portal for their French members. (Actualitté, August 5, 2013)
This pragmatic approach hints at a broader recent policy change, as it contradicts an earlier attitude that focused much more on lobbying the French government to impose stricter legislation rather than promote more practical actions. This move, however, is in line with the Lescure report, a white paper commissioned by the government and published in the spring of 2013, proposing even to abolish earlier strict legislation - the Hadopi law - in favor of a “more gradual approach” (Rapport Lescure, summarized in Le Monde, May 13, 2013).
Hadopi, the High Authority for the Diffusion of Works and the Protection of Rights on the Internet (Haute Autorité pour la diffusion des oeuvres et la protection des droits sur internet) was formed by a law implemented in 2010. Its goal was to promote and encourage legal offers to fight infringement. One of the main actions of the authority is to send warnings to consumers who are infringing copyright law. In a controversial “three strikes” approach, a user can ultimately be banned from accessing the Internet for a certain period after being found guilty three times.
In January 2012, Hadopi released a study arguing that the percentage of French consumers who admit to having downloaded digital content illegally had dropped from over 49% to just 29% for the six months prior to their survey, data that illustrate the impact of the authority’s actions (, eBouqin, January 24, 2012). Music (at 57%) and videos (at 48%) were most popular; books interested only 29% of the infringing audience, a scale that might also hint at the limited interest that ebooks have among the general French audience. Overall, Hadopi is not strongly supported by the book publishing community.
Fifty-six of the infringements investigated under Hadopi were by men and 42 by women, with those from 15 to 24 years of age by far the most active (with 70% admitting illegal downloads).
Research on ebook piracy in France is carried out with yearly reports by Le Motif, an organization sponsored by the Ile-de-France region. Its ambition is to provide an observatory for the “book in the region,” which includes an annual survey on ebooks, both legal and illegal.
In an update, published in March 2012 and including mostly 2011 data, Le Motif documented a continuous rise in available illegal ebook titles —from 4,000 to 6,000 in 2009 to between 11,000 and 14,000 at the time of the study. A remarkable detail regarding France is the share of ebooks from BD (bande desinnée, or comics, graphic novels, and manga), which currently accounts for 8,000 to 10,000 of the illegally available works (Ebookz 3, Etude sur l’offre numérique illegal des livres français sur Internet en 2011, 3e année).
The study argues that, based on the presence of 3,000 to 4,000 “easily available trade titles” at illegal sites, just 1% of legal print offerings has been effectively pirated, versus around 25% of the overall 35,000 to 40,000 available BD titles. Remarkably, only 44 of the singled-out BD bestsellers of a panel from 2010 to 2011 were available for illegal download, of which 58% had no legal digital edition on the market. Manga has been by far the most popular sub-segment. The authors of the Motif study underline the high quality of many of the pirated BD titles, with entire teams working on their digitization, resulting in files that average around 30 MB. [5]
At that time, the French national syndicate of book publishers (SNE) partnered with nine publishers of BD (Dargaud, Dargaud-Lombard, Dupuis, Lucy Comics, la Sefam, Guy Delcourt Productions, MC Productions, Glénate, and Audie) to fight illegal distribution via a specialized popular Usenet forum, altbinaries.bd.french. This effort began in 2008, but as of the writing of this report, no final judgment has been given.
In its report of May 2011, by Le Motif portrayed, the “strong development” of legal ebooks in France as coinciding with a “multiplicity of platforms” for illegal downloads. It was found that the “generalist aggregators” were adding ebooks to their broad offerings of other pirated media content and that new, specialized platforms focusing just on ebooks had also been entering the arena. The offer of legal digitized titles grew significantly from the spring of 2010 to the spring of 2011 —from 17% to 33% of current bestsellers of the authoritative charts of Livres Hebdo/Ipsos —and 36% of the titles on the charts were available for illegal download.
Few of the pirated ebooks were “cracked” copies from legally released originals; the vast majority were obviously scanned for the purpose of illegal dissemination. The study found that 25.9% of the pirated titles were available in multiple digital formats (versus only 6.6% in 2010).
The pirated catalogs were largely “nonexclusive,” in that a title found on one site could usually also be retrieved from other locations (Mathias Daval, “Ebookz: L’offre légale et illégale de livres numériques”, Tableau de bord 2, May 2011).
Interestingly, Germany has officially taken -and so far maintained- a position that is similar to the earlier French stance, with the professional association Börsenverein focusing primarily on lobbying for stricter laws, and forceful legal actions against private consumers who can be persecuted for individual infringements.
Over the past two years, the tone of the confrontation has become harsh, as reflected in an exchange of articles between a spokesperson for one of the most popular piracy sites for books, under the pseudonyme of Spiegelbest, and Alexander Skipis, the managing director of Börsenverein. The pirates, who claim to have downloads of 1.5 million ebook titles per month from their site, argued, “It makes no difference whatsoever, if a book is liberated by us, or by some Russians.” Skipis replied that authors, publishers and book retailers feel “abandoned” by the government, as those who shut their eyes to the threat risk “basic concepts of society” and the “consensus on values” (Der Tagesspiegel, August 25, 2013, and September 2, 2013).
While Börsenverein’s general assessment of piracy as a serious concern for the emerging ebook business in Germany, and more broadly in Europe, is shared by many observers, more detailed analytics and conclusions are not.
In a survey based on a sample of 10,000 people, Börsenverein observed an increasing support among German consumers for the existing legal offerings of ebooks, as 76% find it “satisfactory”, while 70% prefer legal downloads because this involves legal certainty as well as the support of the creators of the consumed work. (Studie zur Digitalen Content-Nutzung, quoted in buchreport, April 22, 2013)
Skeptics, such as piracy experts and authors of the German Gutenberg reports on ebook piracy, Manuel Bonik and Andreas Schaale, in an interview for this report, oppose such optimism, notably with the help of usage statistics of the most popular piracy sites.
b*.bz, for instance, claims to have almost 2.5 million registered users for all forms of copyrighted digital content, including a huge library of digitized books. Measured by their Alexa rank of 94 (for German sites, as checked by us on 22 September 2013), this one piracy site is indeed significantly more popular than all other legal ebook distributors. Börsenverein’s own Libreka platform owns the German rank of 11,606, and Libri’s ebook.de is listed at 1,822. The website of the aforementioned, outspoken book pirate Spiegelbest, b*.to, which claims to host a catalog of 39,000 ebook titles, has a rank of 2,992.
Only Amazon.de is on top of all other sites, with a rank of 5 for Germany. However, it must be added that both Amazon and b*.bz obviously owe their remarkably high positions in Alexa not so much to ebooks alone as to the wealth and diversity of their total offerings.
The difference in the assessment of piracy for the ebook market extends beyond those data to include the resulting strategies. Börsenverein very much emphasizes the importance of legal actions, welcoming a ruling in July by Germany’s Supreme Court that held the file hosting service Rapidshare responsible for infringements on the rights to the content on their platform (buchreport, July 19, 2013). Börsenverein, so far, has decided against offering a takedown service like that provided by their British and French peers.
Bonik and Schaale would favor such services, while pointing, more importantly to what could lead to a shift in strategy among file hosts such as Rapidshare to legalize their operations. “The future is probably the model of Mega“, they argue, referring to a platform introduced in 2013 by German national and New Zealand resident Kim Dotcom Schmitz, whose earlier, heavily contested site Megaupload had been shut down, before being revamped as a seemingly legal hosing service in the cloud.
In Germany during the first half of 2012, the controversies regarding copyright —and indirectly piracy as well— have grown from a niche discussion of the web community into a mainstream debate on the fundamentals of civil rights, individual freedoms, and the general values of society. A number of factors contributed to this expansion.
Concerns about privacy and the rights of the individual have a long political history going back to the totalitarian regime of the Nazis and to the secret police spying on every citizen in the socialist part of the country during the Cold War until 1989. The risks stemming from publicly available private information on citizens brought about by information technologies have been debated on and off since the 1980s.
Today, the web community holds its own kind of digital town meetings, and digital monitoring of the population has brought about protests against street-scanning initiatives by Google as well as tracking and consolidating data traces on individuals for criminal investigations. Recent legal action against highly popular movie streaming services such as Kino.to found similar broad media coverage, as did the controversy over WikiLeaks and Julian Assange, the arrest of German-born digital pirate Kim (Dotcom) Schmitz, and the Anonymous movement, which has a broad following in Germany. A formerly marginal political group called the Pirate Party has become a platform for all kinds of protest initiatives, ready to campaign for entering German parliament whenever the next general elections are called.
The content industry, spearheaded by the professional organizations for cinema and music but supported as well by Börsenverein, is lobbying for various extensions of laws to fight the illegal usage of copyrighted material and calling for stricter laws obliging internet service providers to hand over user data for prosecution by the authorities. It is joined in these activities by various authors’ initiatives under the slogan “Ja zum Urheberrecht” (“Yes to author’s rights”), led by a group of crime writers. Around 1,500 authors signed the various petitions (Der Spiegel, May 10, 2012).
A broad wave of filings in 2011 and 2012 on behalf of the content industry resulted in thousands and thousands of legal notices and penalty payments against private citizens for infringements, backed up by PR campaigns with graphic images depicting the creators of artistic work as violated corpses. The result was a deepening of the rift between the rights owners and the consumers.
In summer 2012, Börsenverein started a new campaign to promote a model similar to the Hadopi approach in France: warnings displayed whenever a user accesses unauthorized content on the Web.
As confrontations rage in various arenas of the battle, Börsenverein —the central actor in the book publishing realm as opposed to other media such as music or film— announced a change of strategy in June 2012. Earlier gospel was that a new adaptation of copyright legislation with regard to digital was not necessary as long as current law was enforced. Gottfried Honnefelder, the organization’s acting president, stated at a forum of publishers in Berlin that the Internet was, after all, a new challenge for communication and cultural development: “As a result, we must acknowledge that copyright legislation falls behind the reality of life in certain regards,” hindering more than encouraging the expression of creativity. Hence certain changes in the legislation must be considered, and the cultural industries are called upon to spearhead such innovation (keynote of Gottfried Honnefelder at Buchtage Berlin, June 2012). The practical consequences of this shift are not yet entirely clear.
Several specialized studies on ebook piracy in Germany have been conducted by industry organizations as well as independent research teams.
Börsenverein launched a survey on the emerging ebook market in Germany in March 2011 (a summary is available here) and followed up in late August 2011, in collaboration with two other organizations of content industries, with its first comprehensive study on the topic: “Usage of Digital Content”, (“Digitalen Content-Nutzung” or DCN).
Key findings of the industry-sponsored study included a figure of 14.3 million Germans (or 22% of the total population) who had downloaded media content from the Internet in 2010, of which 3.7 million downloaded pirated content. Share-hosting platforms such as RapidShare dominated illegal downloads of movies, TV programs, and music; “ebooks are exchanged remarkably often via email,” according to the study. In a growing number of cases, entire media libraries saved on external memory devices are illegally exchanged between users. In 2010, 17% of the total population of Germany, and almost 40% of those between 10 and 29 years old, admitted to having swapped media content on external memory.
Of those who admitted to downloading music illegally, 73% claimed to have not spent any money on music in 2010, and the remaining 27% made purchases of an average of €18.00 per year for “physical products,” the study says.
The DCN survey instantly triggered a critical debate on the methodology employed and the implied assumptions of the study, drastically highlighting how wide the gap is between the perspectives and approaches of representatives of the creative industries on one hand and consumer organizations or independent voices on the other.
Most of the criticism of the study focused on its definition of what was considered an “illegal download,” as it included all free downloads from “file sharing networks/ftp servers/newsgroup services/peer-to-peer networks/sharehosters/blogs,” which “results from the fact that the members of the sponsors of the study do not publish their products through these channels”. Considered among “legal sources” were downloads from commercial platforms, personal websites of artists/bands/authors/record labels,” and the like, including Project Gutenberg as well as platforms such as YouTube and Clipfish (correspondence from Börsenverein to the author of this study, August 31, 2011).
Beyond such methodological issues, trade media also skeptically commented on the industry organizations’ strategy of “painting it black” while neglecting to mention that “only 1 percent of Germans illegally read ebooks” (Daniel Lenz, “Frankfurter Schwarzmalerei”, (“Frankfurt paints it black”), buchreport, September 1, 2011).
A more detailed account that differed from that of Börsenverein with regard to methodology but agreed in terms of the assessment of ebook piracy having achieved a very significant presence in Germany was delivered by two studies that were carried out by a team of two independent researchers: Manuel Bonik and Andreas Schaale. The first study was called “Gutenberg 3.0: Ebook-Piraterie in Deutschland”, (“Ebook Piracy in Germany,” released in January 2011) and was later updated to “Gutenberg 3.1: Ebook-Piraterie in Deutschland (ein Update)” in October 2011.
The fact that illegal downloads had a prominent and growing presence for German readers and Internet users was deduced from contexts of relevant Google searches: among the ten most popular combinations that included the word “ebook” in search queries, four were combinations with terms including “rapidshare,” “free,” “torrent,” or “no cost.” However, the other six queries were formulated in neutral ways, such as “download ebook” or “ebook reader” (Gutenberg 3.0 – Ebook-Piraterie in Deutschland, p. 5).
Although Börsenverein focused its attention prominently on content-sharing platforms —which are most relevant for music, movies, or film— Gutenberg 3.0 found that such sources played only a modest or even a decreasing role for ebooks, while the bulk of the illegal ebook downloads originated from direct download links (DDL) such as RapidShare or Depositfiles, with 200 currently active platforms on the Web. For example, in January 2011, 260 titles from O’Reilly were offered by one P2P/Torrent site versus 1,940 by a prominent DDL blog (Gutenberg 3.0 – Ebook-Piraterie in Deutschland, p. 8).
A differentiated understanding of these sources is particularly relevant, according to the authors, as DDLs are more difficult to challenge by rights owners, and users cannot be easily prosecuted.
Overall, Gutenberg 3.0 documented a steady and significant increase in the reach of the most relevant web sources, as well as the emergence of a tightly knit web of DDL sources and blogs promoting and pointing to available ebooks. The illegally obtainable title catalog by far outnumbers the legal offerings, as it listed about 100,000 ebook titles as of January 2011. Most of the titles seem to have been scanned, not cracked from legal digital publications.
In a preliminary conclusion, the Gutenberg authors wonder whether “it is altogether reasonable to further promote selling ebooks altogether” in view of the massive threat of piracy (Gutenberg 3.0 – Ebook-Piraterie in Deutschland, p. 25).
In their October 2011 update, Gutenberg 3.1, the authors of the piracy study came to even more radical conclusions, highlighting the decrease in (printed) book sales in Germany, notably in the bestselling segment (–27% for the top three bestsellers and –29% for the top 30 for the first half of 2011 versus the same period in 2011). The authors’ conclusion —which obviously strongly equates the occurrence of piracy and effective lost sales, a link that can be questioned— is that the “more than average growth in piracy correlates with the more than average decrease of revenues” in the segment of bestselling titles, so it can be “assumed that the revenue losses (in printed bestsellers) are caused by piracy” (Gutenberg 3.1 – Ebook-Piraterie in Deutschland (ein Update), p. 4).
In an update of their study in fall 2012, Gutenberg 3.2, the authors argue that “the speed of growth [in the reach of ebook piracy sites, —R.W.] has increased dramatically, compared to 2011.” The community of one of the most active and most popular piracy sites for German-language ebooks, b*.bz, has over 2 million registered German-speaking users (Manuel Bonik and Andreas Schaale: Gutenberg 3.2. - Ebook-Piracy Report).
It’s not only new and bestselling titles that are released illegally by pirate networks; a growing catalog of backlist titles —mostly textbooks and fiction— are produced in the tens of thousands, without their original (print) publishers even being aware of the piracy.
In major non-English-language book markets such as Germany, France, or Spain, copyright-protection technology is the norm for ebooks released by publishers. Digital Rights Management (DRM) systems are widely considered to be a precondition for the emergence of a commercially viable ebook market.
However, significant exceptions exist to the rule, and in 2012, a number of publishers have started to experiment with alternatives.
The most surprising exception is probably Sweden, where almost all digitally published trade books have no DRM. eLib, by far the largest ebook distributor (owned by Bonnier, the dominant publishing group in Scandinavia), has 80% of its content watermarked as an alternative to DRM, which equals 98% of all of the company’s ebook sales (communication by eLib for this report).
But also in Italy, where Adobe’s DRM solution had been initially prvalent, “social DRM” (notably digital watermarking) had increased from a modest 15% of all ebooks in 2010 to 42.4% in 2012, clearly overtaking the largely unchanged one third of ebooks carrying hard DRM. (Giornale della libreria, Background and Trends, 9 March 2012)
The most widely publicised DRM-free publishing project was certainly the launch of Pottermore in March 2012, introducing the Harry Potter series by J.K. Rowling as ebooks. For all downloads, DRM will only be applied if the books are pushed through a Kindle or NOOK reading device or a lending system such as Overdrive. But readers can also download a DRM-free EPUB copy, which only carries a watermark allowing the publisher to track back a book to its source. (For a detailed discussion, see the summary by Philip Jones: Pottermore finally delivers: Harry Potter e-books land.) An assessment of sales a good month after the introduction of the platform documents the initiatives’s commercial success, with sales worth three million Pound Sterling in the first four weeks, coinciding with increasing print book sales (summary in buchreport, May 9, 2012).
Across various markets, a number of traditional and newly founded publishing houses have started to roll out parts of their title list, or even an entire catalog, without DRM.
In the US, the popular imprints Tor, Forge, Orb, Starscape, and Tor Teen, all belonging to the German Holtzbrinck group’s Macmillan US, renounced DRM in mid 2012. (“Tor US abandons DRM”, The Bookseller, April 25 2012).
Penguin publicly stated that it was “looking at all kind of alternatives” (Penguin global digital director Molly Barton at the Publishers Launch conference in New York, June 4, 2012).
In France, the independent literary publisher Editions Michel Lafon started to release some of its top bestselling titles without DRM, opting instead for a digital watermark. This move includes the novel Métronome by Lorànt Deutsch, which sold over 800,000 copies in print (“Lieber mit Waserzeichen”, buchreport, July 3, 2012).
A similar policy has been introduced by Fleurus Editions, which is part of the French group Média Participations. With a catalog of some 1,200 ebook titles, the publishers started to conduct various experiments with its digital portfolio, from competitive pricing to selling by chapter to offering packages including both print and digital versions of a title. But the real catchphrase for the company’s digital strategy clearly is “No DRM” (interview with Anne Delilliac et Julien Gracia of Fleurus, Idboox, July 3, 2012)
Numeriklire, a digital-only publisher specializing in adventure, erotica, literary fiction, crime, and young adult books, also provides its entire catalog without DRM, making this approach key to its company strategy and brand.
In Spain, the renowned Barcelona-based literary publisher Ediciones launched a digital-only subcompany, B de Books, in November 2011, which is supposed to release some 250 new titles per year, all without DRM. This policy is, again, part of several experiments, including pricing (“Libros digitales desde 1,99 euros y sin protección anticopia,” El Pais, November 15, 2011).
In the Netherlands, the largest Dutch trade publisher, De Arbeiderspers/A W Bruna, declared in January 2013 that it would abandon DRM for all ebooks in its catalog of about 1,200 titles (see this blogpost by publisher Timo Boezeman).
Also in January 2013, the self-publishing portal Lulu gave up on DRM (statement on DRM policy).
By May 2013, Bill McCoy, the executive director of the International Digital Publishing Forum, IDPF, even listed among what are in his view Seven Deadly Myths of Digital Publishing as Myth 5: “DRM Is About Reducing Piracy”, arguing that there was a “growing realization that DRM has nothing to do with reducing piracy is that lighter-weight forms of DRM—including watermarking and other social approaches that don’t technologically bar sharing—are more attractive than a quixotic arms race to deploy more and more sophisticated technologies that will only frustrate consumers and lead to them being locked in to proprietary platforms.” (Quoted in Publishers Weekly, 29 May 2013) But of course, the debate is still on, and notably the largest publishing groups attach hard DRM to the majority of their ebook titles so far.
There is broad agreement about the publishing industry’s arrival at the “Napster moment” for ebooks. But these brief case studies on piracy research in France and Germany clearly illustrate the limited consensus —aside from the problem’s scope and threatening forces— on how to understand the driving forces and, as a consequence, what actions will be effective at reducing the loss from piracy to legal rights owners.
Identifying and mapping the offerings seems to be key, and the obvious first step —not only to persecute infringement, but before such action— is to become aware (especially for publishers) of the intricacies and dynamics of the problem.
This step requires tough strategic decisions for the industry: an assessment of the experiences, practices, and lobbying strategies from other content industries —notably movies and music— and whether they should be followed, and the extent to which different approaches should be developed.
eBooks are primarily downloaded from DDL sources, where uploaders are next to impossible to identify. Therefore, publishers must get involved individually to check such sources for their respective catalogs of titles and to force concrete links promoting illegal download sources for their titles to be taken down by the offenders. So far, only a few such specialized service providers exist.
Several of the leading international groups have taken such action, such as John Wiley & Sons in the textbook market (Publishers Weekly, November 1, 2011) and the Hachette group for general trade (Livres Hebdo, December 15, 2011) as just two examples. But the offer can also be adapted to be more compelling for readers who would prefer a legal offer if it were available in convenient ways. A group of 39 Japanese manga publishers explored such possibilities with a subscription site targeted at US consumers with English-language editions of their graphic books (www.jmanga.com). The JManga offer, at this point, is available only to users in the US and Canada. For details, see Livres Hebdo, August 22, 2011.
The piracy debate also overlaps with that on ebook pricing. As The Economist pointed out in an analysis of ebooks and the book business titled “Great Digital Expectations,” “piracy is a particular threat because of a second, bigger problem: the apparently arbitrary nature of e-book pricing” (The Economist, September 10, 2011).
Piracy and ebooks is a complex challenge for the industry’s organizations, as is crafting the overall story they want to tell the reading audience as well as politicians and regulators.
So far, in many parts of continental Europe, at least, the predominant mood is one of angst. “Publishers and retailers tremble from the pirates,” read the headline of an article about extraordinary growth of ereader and ebook sales for Christmas 2011 in Germany —and this wasn’t in a tabloid, but in the country’s leading business daily, Handelsblatt (December 27, 2011). What may have been conceived as a means of self-defense in an industry undergoing change can result in a severe image problem, as pointed out by René Strien, a German publisher and president of the association of German trade publishers (buchreport, January 19, 2012). Strien warned of publishers publicly being blamed as a mere “content exploitation Mafia” at a crucial moment when the very basics of European and international copyright were coming under review by politicians and clashing lobbying groups, with growing controversy between rights holders and consumers.
Thus, piracy —together with pricing, copy protection (DRM) and regulation— may be one of the strongest forces shaping the European ebook markets in their next phase of development.
[4] The European Court ruled against the German collecting society (GEMA) on the installation of automated filters to prevent access to illegal content on platforms such as YouTube, as such practices would impede freedom of information as well as the individual privacy rights of users. (Die Zeit, February 2, 2012)
[5] It must be noted that these ratios may have changed significantly in the meantime, as the offer of legal digital of books of all genres had strongly increased as of mid-2012.