A lot of energy is going into questions about international sales for authors (trade or independent), not least because the arrival of the ebook makes it appear that crossing borders should be far easier for books now than in the past.
However, in much of the world, digital reading hasn’t taken off with nearly the strength that the United States market has seen. For example, in Germany, which is usually cited as the third largest ebook market in the West, only an estimated 5 to 8 percent of the market is digital.
This is expanded on in a new report from the European Parliamentary Research Service (EPRS), an agency that prepares background briefings for members of Parliament. Its document, just out this month, Ebooks: Evolving Markets and New Challenges, has been produced in response to one of the major suspected reasons for a slower uptake of ebooks in Europe: a quirk in Eurozone taxation of digital books.
Ebooks in EU law were originally classified as digital products akin to software, not as books; consumer goods, not cultural goods. This means that while print books in the EU average a VAT (value added tax) rate of 7.5 percent, ebooks are taxed at almost three times that amount, an average 19.9 percent. You might have heard of the campaign phrase “A Book Is a Book”—that’s one of the rallying cries of those who have agitated for change in this peculiar circumstance, a demand so potent that four EU nations (France, Germany, Poland, and Italy) joined together last spring in a joint condemnation of the unbalanced taxes, calling the situation an “unjustifiable discrimination toward ebooks.”
Overall in Europe, the report says, the ebook market in 2014 represented only 1.6 percent of the total book market. Many of us are watching for a coming round of deliberations this spring at the European Commission—a debate termed a “reflection” on the VAT situation—to see if the lawmakers will change this problem of ebooks’ tax status to make them as affordable as print books.
As long ago as 2012, France and Luxembourg unilaterally lowered their VAT rates on ebooks. Malta and Italy have followed, lowering VAT rates on ebooks to between 3 and 5 percent.
In Germany, meanwhile, the Cabinet has approved a proposed change to place a single, fixed price across all ebook sales, as has been the case there for print books since 2002. As Ingrid Süßmann reported at Publishing Perspectives, the proposed fixed price for ebooks in Germany is expected to be levied “cross-border,” meaning that all retailers, regardless of nationality or business location, must comply. That would mean that even Amazon would be required to adhere to ebook fixed pricing there, as any other bookseller would.
Bottom line: In coming weeks, keep an eye on the European ebook taxation issue. At least on the face of it, lower VAT on ebooks could mean that the EU becomes a friendlier marketplace to digital books. That might mean rising adoption of ebooks and e-reading. That logic is bolstered by the report’s assertion that “book publishing is the largest media and entertainment industry” in Europe, at a value of $151 billion; film and TV come next at $133 billion. Globally, the USA is now the largest book market, followed by China, Germany, Japan, France, and the UK.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
