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One of the initial debates about the recent growth of digital publishing was in the way that ebooks were viewed by consumers and by the publishing industry. Some governments, like Germany’s, initially went so far as to treat ebooks as though they were two separate entities, both a book and a piece of software.
This issue caused major concern in Germany where the tax structure created havoc for booksellers and consumers alike. The government treated ebooks as though they were books, meaning they feel victim to the national law that stated all books had to be sold at an identical price throughout the country, but yet ebooks were also treated as software downloads, and therefore taxes at 19% instead of the 7% tax rate for print books. Obviously, this kept digital reading from taking off initially, as consumers had to pay the same price for the ebook that they would have paid for the print, while paying more than double the tax rate.
Although that issue has largely been resolved as digital publishing continues to take a stronghold in the book economy, Turkey only this month became one of the more recent companies to finalize legislation lower its VAT tax percentage rate from eighteen percent to only eight percent.
According to a statement from IPA Secretary General Jens Bammel, he congratulated Turkey for “joining the small but growing number of states that have recognised that that both paper and digital books should have the same VAT rate. Otherwise, government is interfering with the reader’s choice to move to digital books.”
The new tax rate went into effect earlier this month, and hopefully other markets (including states in the US who still tax books) will see the benefits of making book purchasing–either in print or in ebook–a more lucrative choice for consumers.
Digital publishing platform Pubsoft announced today that it has partnered with Transmedia Story Stream to help authors create an entirely immersive storytelling experience within their ebooks. Utilizing features like videos, audio clips, live streaming of social events associated with the book, and even gaming, the innovative process will help authors and publishers offer an even richer experience to their readers.
When enhanced ebooks first emerged on the market, many readers weren’t ready for the intrusion of audio and video in their books; many didn’t even like the ability to tap on an unobtrusive hyperlink to learn more or to access features like photos or maps. but with the far wider reach of tablets, coupled with the growing popularity of enhanced digital magazines, the public may now be ready for this type of experience.
“We’re excited to be a part of this project because we see the potential for growth. How many of us have played online social and casual games like Words With Friends or Candy Crush for hours without realizing it? What if games such as those were incorporated into some of our favorite story lines, like Twilight, and Harry Potter? What if participating in different activities provided different additional parts of the story that could only be unlocked by experiencing it in a different way? We don’t want to diminish the traditional narrative form so much as we want authors to have the ability to add to it,” said Heather Wied, Marketing Director for Pubsoft.
What actually may make this venture far more profitable than enhanced ebooks from a few years ago is the building on the HTML5 platform for ease of consumption across multiple platforms, as well as Pubsoft’s original offering to the digital publishing industry of creating streamlined, one-stop-shopping for authors and publishers to market, sell, and retrieve royalties on their titles, regardless of retail outlet.
The platform, like so many smart moves in publishing, will start with romance titles, as romance readers are not only avid consumers of books, but are also found to be near the top of the list for casual gaming use.
At the same time five of the then-Big Six publishers and Apple were sweating under a multi-million dollar lawsuit and investigation for trying to bring down Amazon, three independent bookstores in the US filed a suit alleging the Amazon and the Big Six publishers had created a conspiracy to squeeze out independent booksellers by artificially working the DRM-status of Kindle ebooks in order to prevent indie stores from selling ebooks to customers with Kindles.
Earlier this year, the owners of The Book House of Stuyvesant Plaza in Albany, N.Y., Fiction Addiction in Greenville, S.C., and Posman Books in New York City, filed a lawsuit against Amazon and the publishers for both the DRM conspiracy and a separate allegation that they were in violation of the Sherman Act–the same Act that factored in an important way in the DOJ lawsuit against Apple–for trying to gain a monopoly on the industry.
The judge in the case, Jed Rakoff, didn’t just quietly disagree with the plaintiffs in his decision, but rather in his eighteen-page decision on the case had some strong words for the plaintiffs, including stating how “remarkable” it was that the plaintiffs didn’t demonstrate any secret meetings, collusion attempts, email records, or other examples of conspiracy. In fact, the suit does not even specifically name which publishers met with Amazon to purposely ruin independent bookstores, a fact that Judge Rakoff pointed out.
Essentially, the complaint seems to come down to the fact that the American Booksellers Association has a partnership with Kobo to let indie bookstores not only sell the devices in their shops, but also to sell ebooks to customers while making a small affiliate-style profit on it. This scenario is not in place with Amazon, so a Kindle customer who comes into a bookshop cannot buy an ebook through the store. The plaintiffs alleged that this is a conspiracy-level decision and that the publishers were in on it.
Interestingly, one key idea seems to have been overlooked by the plaintiffs: as the DOJ investigation showed us, the publishers are willing to do almost anything to keep Amazon from getting even more powerful. The idea that the publishers would purposely help Amazon monopolize the ebook industry and take down a tiny mom-and-pop bookstore is unfathomable, given the current concerns over pricing and distribution.
One of the really interesting dynamics about public libraries is that, even as patronage appears to be dropping, more and more Americans claim that libraries are vital to the health of a community. Data from a new survey by the Pew Research Center’s Internet Project polled over six thousand Americans about their library use, as well as their attitudes about the need for widespread library access.
“In a larger sense, Americans strongly value the role of public libraries in their communities, both for providing access to materials and resources and for improving the overall quality of life in their communities. Many library resources are particularly valued by those who are unemployed, retired, or searching for a job, as well as those living with a disability and internet users who lack home internet access,” according to the report.
Some of the specific percentages from the Pew study include:
- 95% of Americans agree that the materials and resources available at public libraries play an important role in giving everyone a chance to succeed.
- 81% of Americans ages 16 and older say that public libraries provide many services people would have a hard time finding elsewhere.
- 48% of Americans have visited a library or bookmobile in person in the past year, down from 53% in November 2012.
- 30% of Americans have visited a library website in the past year, up from 25% in 2012.
- Taken together, this means that 54% of Americans have used a public library in the past year.
However, the survey found that, while the number of people visiting a physical library location may have dropped by a few percentage point, library website use is up, possibly due to increased access to ebook lending to personal devices and library subscriptions to streaming videos, music, and research tools.
The complete survey and its results are available through Pew Research Center’s Internet Project.
E-reading platform Kobo may be a quiet company where retailing is concerned, given that many US consumers may not have even heard of the company that falls just slightly behind Amazon and Barnes and Noble is ebook and device sales, but the company who has made more international headway than either of the two larger platforms combined has now increased its retail partnerships in France.
Kobo, whose line of devices includes ebooks and tablets and whose catalog includes more than four million titles, is already available online in over 190 foreign markets and currently leads the field in access to foreign language titles. Now, Kobo’s line of devices will be available through new partnership agreements with Pixmania, Cora, Casino, Auchan, and Boulanger, just in time for the holiday shopping rush.
“The appetite for digital reading is gaining momentum in France,” said Jean-Marc Dupuis, Managing Director of EMEA, Kobo, in a press release. “Expanding on our partnership with FNAC France, we’re excited these new retailers will make Kobo available to people passionate about reading.”
Kobo recently raised the ire of some authors due to restrictions in its self-publishing platform, Writing Life, due to the appearance of erotica and adult-themed self-published ebooks making their way into online book retailers’ children’s sections, with the end result being a statement from the company that they will not consider for sale certain inappropriate thematic elements and that, like most of the other retailers including Amazon and Barnes and Noble, they would be deleting titles whose metadata or keywords seemed intentionally misleading.
The government of Quebec has gone forward with a law that was months in the making, putting a restriction on book pricing. Retailers can not discount a book more than ten percent now, and that restriction applies to both print and ebooks. However, despite the celebration of the news from booksellers and publishers, there are several problems with the measure.
First, there is no word as of yet as to how this will affect foreign retailers, specifically those who operate strictly online. While it is presumed that Amazon.ca will have to follow the same pricing structure as booksellers in Quebec, that does seem fairly impossible, given that this law only applies in the province itself. Customers elsewhere in Canada do not have to follow these restricted pricing guidelines, so it seems plausible that Amazon will not have to affect its customers throughout the country just to appease Quebec. Basically, this could set up a situation that actually drives more customers to Amazon.ca, rather than helping the booksellers.
Second, customers who live close enough to a border to another province or to the US will simply buy their books across the line, not only hurting the booksellers again, but hurting the entire tax structure of the economy as consumers flee to do their shopping. And as not many people may drive out-of-state simply to buy a book, it’s foreseeable that those consumers will do a lot of their shopping while their making the trip, hurting other industries within the province.
Perhaps the most upsetting is the time limitation: the law states that a book cannot be discounted below 10% off during the first nine months after publication. Consumers–including individuals and libraries–will know that after those nine months are up, the price of the book will drop, leading them to simply wait to make book purchases (assuming it is not a long-awaited sequel, for example). That means libraries are going to become even less relevant to patrons who are already leaving in droves, as they won’t stock current bestsellers, knowing that their meager budgets can be spared if they wait to make new book purchases.
Finally, the law, which goes into effect January first (after the holiday book buying season that is so important to retailers), is only good for thirty-six months, giving the government time to evaluate it and make more permanent decisions about the measure. If there is any backlash from the authors, publishers, booksellers, or major foreign retailers, party opponents can easily point to the law’s failures come campaign season.
Essentially, this seems like a thinly veiled attempt to tear down retailers like Amazon while throwing a bone to the booksellers. Until the entire publishing and bookselling industries are willing to stop trying to cling to the ancient system of book economy, no measure–no matter how good or bad–is going to save them.
Late last week, Judge Denise Cote, the judge who has presided over the Department of Justice lawsuit against Apple and five of the then-Big Six publishers, approved the terms of the settlements with the publishers, meaning the doors have finally been opened for the money to begin making its way back to the consumers who overpaid for ebooks.
But one person has been working to block the approval of those terms on the grounds that the publishers will not try to stand up for themselves (the publishers maintain there was no effort to bilk the public out of hundreds of millions of dollars, they quickly settled out of court to avoid what would end up costing them more in legal fees), meaning presumably someone must step in.
Bob Kohn, former CEO and founder of the digital solutions company RoyaltyShare who works with a number of major publishers, did not attempt to object to the settlements posed earlier this year with HarperCollins, Simon&Schuster, or Hachette, but objected Friday to the settlement terms for Macmillan and Penguin. His argument was that the actions of the publishers were not in violation of the Sherman Act (which is in place to prevent companies from colluding on the prices of goods to inflate them artificially, for example), but that their actions were necessary to prevent Amazon from growing even larger than it already is.
While some may feel that’s a “noble” reason for breaking the law, Judge Cote disagreed.
Kohn took a huge risk in posing his objection and asking for a Motion to Intervene. The states’ attorneys general were prepared to ask Kohn to foot the bill for a bond to return that money to consumers should he have succeeded in his motion to delay the settlement. While he was unsuccessful, Kohn’s motion in no way impacted the decision or proceedings against Apple for its part in this issue; Apple is appealing its own ruling, handed down by Cote earlier this year in which she found sufficient evidence of price fixing on the part of the company.
As the settlement with the publishers has been approved, consumers should soon start to see refunds–most likely issued in the form of credits on their accounts–for ebooks purchased during the time period of the stated collusion. Some studies of the case found that more than 20 million consumers were affected by the illegal price increases on ebooks.
UPDATE: Bob Kohn is no longer with RoyaltyShare, having left the company earlier this year.
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