VAT
Every now and again the dreaded tax question rears its ugly head. Are books different? Should they be subject to tax or be seen as educational, social and generally one of the few things that free from it?
What makes the question worse is the inconsistency of approach by our European neighbours and also the different applied to printed and electronic publications. In Germany, for example, print products are subject to a reduced rate of 7%, whereas electronic publications are taxed at 16 %. Also, unlike the UK, Italy, Spain and Belgium tax electronic publications at the full rate. The whole inconsistency on tax forces results in inconsistency of buying and market strategies. Some major markets remain with a print biased policy not on the grounds of demand but on the grounds of cost. This is without entering into the further murky waters of mixed product, “free” digital additions and formats such as audio.
A study "Survey on the impact of VAT on libraries and the scientific publication markets" for the Frankfurt Group - Consensus Forum for Academic and Research Information is available raises many further interesting perspectives on this thorny issue. In Scandinavian countries, the shift to electronic media in moving faster and more comprehensively as VAT is refunded at the end of the year. However, the report found that the system in Germany and other European countries not only acted as a brake in terms of the provision of digital information, it also represented a considerable disadvantage for research and economic development, including in international competition. It cited the considerable competitive advantage for research and education in the USA where electronic publications are not subject to VAT.
What everyone fears is that VAT or tax will be applied, irrespective of format, to all publishing. It is one of those subjects few want to discuss in case they raise the profile of the issue and their worst nightmares happen. The reality is we now in a digital age and living in a global economy. The issue isn’t going to go away, neither is that of tax harmonization. Believing we will retain the status of no tax forever, may appear to some like King Canute holding back the tide – pointless. Just as believing that all countries will adopt the same tax approach is equally unrealistic. We need to get on with digitization, make the changes needed to publishing and it processes whilst continuing to apply the pressure to retain the status of printed books.
Ref: http://www.sub.uni-goettingen.de/frankfurtgroup/vat/EndberichtVAT210906.pdf)
Sociology Research Institute Göttingen (SOFI)
Thursday, November 30, 2006
Friday, November 24, 2006
Review copies on eBay
Today we read that printed review copies are being sold on eBay.
What is better for the review copy, it potentially finding a good home or being effectively binned? Merely stating it is not for resale or “marking it” has never stopped books finding their way onto the market. I am reminded of those churches that have signs that forbid the use of confetti at weddings. We must be realistic.
Anyone who has ever had the wonderful experience of visiting a certain famous bookstore off Union Square in New York will be aware that there is almost an entire floor devoted to review copies! Some even contain notes or original letters and some have never been opened. I always feel sad when i see mint books that have been "felt tipped" or scored to mark as not being for resale.
However, the emerging digital world offers many potential and additional benefits to today’s scattering of seeds. Digital content offers the opportunity to send digital sample, review and inspection copies, a practice that some have already adopted. This could be the full book, or sample chapters and may be distributed before the book has even come off the press. Importantly, the delivery can be effectively targeted, the rights controlled and significant cost reduced whilst interest and potential sales are maintained.
Some will argue that people want to touch and feel see the physical book but some may be happy to sample it digitally. There is no right or wrong answer, only opportunities to think and act differently and avoid trying to put the horse back into the stable after it’s bolted.
What is better for the review copy, it potentially finding a good home or being effectively binned? Merely stating it is not for resale or “marking it” has never stopped books finding their way onto the market. I am reminded of those churches that have signs that forbid the use of confetti at weddings. We must be realistic.
Anyone who has ever had the wonderful experience of visiting a certain famous bookstore off Union Square in New York will be aware that there is almost an entire floor devoted to review copies! Some even contain notes or original letters and some have never been opened. I always feel sad when i see mint books that have been "felt tipped" or scored to mark as not being for resale.
However, the emerging digital world offers many potential and additional benefits to today’s scattering of seeds. Digital content offers the opportunity to send digital sample, review and inspection copies, a practice that some have already adopted. This could be the full book, or sample chapters and may be distributed before the book has even come off the press. Importantly, the delivery can be effectively targeted, the rights controlled and significant cost reduced whilst interest and potential sales are maintained.
Some will argue that people want to touch and feel see the physical book but some may be happy to sample it digitally. There is no right or wrong answer, only opportunities to think and act differently and avoid trying to put the horse back into the stable after it’s bolted.
Thursday, November 23, 2006
Sharing the Digital Pie
I read an interesting article in www.booksquare.com today that a friend had forwarded me. It relates to the low royalty payment that its author feels is indicative of the market’s approach to sharing reward in the digital world. They describe the cost chain and waste that exists in the physical world and ask the question why the obvious cost reductions in the digital world are not being shared with the originator, the creator, the person without whom the chain would not exist.
It raises several interesting points. It acknowledges that some of the original costs remain, while others transform or even disappear. It concludes that although the general cost of doing business, at least when it comes to electronic media, is decreasing the royalties being paid to authors remain the same or similar. It recognizes that e-books do not comprise a sufficient share of the market to be factored into overhead distribution but agues for a significant increase in digital royalty.
The market is now starting to take those bold steps in the Brave New World and there are a number of issues to be addressed such, pricing, formats, availability of digital content, channel etc. However the issue of rights contracts and digital royalties is one where common sense should prevail. Just as publishers need to recognise that the existing channel will still generate the majority of sales and must be supported and enabled into the digital chain there is a need to also recognise that authors need to equitably share the efficiency gains that are achieved through digitisation.
People only exist in the value chain if they are perceived to add value and in a world where long tail economics is reality and self publishing is becoming easier, we need to recognise some of the lessons that can learnt from the music sector and its relationships with its artists. Also artists need to be realistic and recognise the value publishers and retailers will continue to deliver in the digital world.
If artists hold back on digital rights and publishers don’t equitably share the potential increased margin they potentially hold back the creation of the market which after all can’t be built in a vacuum.
It raises several interesting points. It acknowledges that some of the original costs remain, while others transform or even disappear. It concludes that although the general cost of doing business, at least when it comes to electronic media, is decreasing the royalties being paid to authors remain the same or similar. It recognizes that e-books do not comprise a sufficient share of the market to be factored into overhead distribution but agues for a significant increase in digital royalty.
The market is now starting to take those bold steps in the Brave New World and there are a number of issues to be addressed such, pricing, formats, availability of digital content, channel etc. However the issue of rights contracts and digital royalties is one where common sense should prevail. Just as publishers need to recognise that the existing channel will still generate the majority of sales and must be supported and enabled into the digital chain there is a need to also recognise that authors need to equitably share the efficiency gains that are achieved through digitisation.
People only exist in the value chain if they are perceived to add value and in a world where long tail economics is reality and self publishing is becoming easier, we need to recognise some of the lessons that can learnt from the music sector and its relationships with its artists. Also artists need to be realistic and recognise the value publishers and retailers will continue to deliver in the digital world.
If artists hold back on digital rights and publishers don’t equitably share the potential increased margin they potentially hold back the creation of the market which after all can’t be built in a vacuum.
Tuesday, November 21, 2006
Political Digital Drivers
Will governments make the digital difference and if they do, will publishers rise to the challenge? We wrote in our recent report ‘Brave New World’ about the Chinese government plans to issue 165 million students with ebook readers and in doing so obviate the need to buy textbooks. One would assume that the US or Singapore would already have all schoolchilderen connected to the internet but surprisingly they don’t. We expect it from emerging powers such as China but we now hear about other countries following similar paths.
Libya could now become the first country to provide every school-age child with a laptop computer and internet connection. In a £134m deal with One Laptop Per Child (OLPC), an American non-profit group, Libya will acquire 1.2m computers with internet connection.
Computer scientist Nicholas Negroponte, chairman of OLPC, aims to provide laptops for children in developing countries that cost $100 (£54) each. This are specially designed and will have a rugged case and a sealed rubber keyboard to keep out dust and water. Article continues
In an effort to eliminate the parts most likely to go wrong, the designers have dispensed with a cooling fan and replaced the conventional hard disc with a flash drive. Costs are further reduced by using free software and only requiring 10% of the power of normal laptops.
Is Libya alone? No, OLPC has also reached tentative purchase agreements with Argentina, Brazil, Nigeria and Thailand.
This initiative demonstrates that the technology is available and that a number of governments have the will. However, there is now a need to provide the content and learning tools that will make the difference. The question is whether the commercial publishing model can be balance with the political one?
Libya could now become the first country to provide every school-age child with a laptop computer and internet connection. In a £134m deal with One Laptop Per Child (OLPC), an American non-profit group, Libya will acquire 1.2m computers with internet connection.
Computer scientist Nicholas Negroponte, chairman of OLPC, aims to provide laptops for children in developing countries that cost $100 (£54) each. This are specially designed and will have a rugged case and a sealed rubber keyboard to keep out dust and water. Article continues
In an effort to eliminate the parts most likely to go wrong, the designers have dispensed with a cooling fan and replaced the conventional hard disc with a flash drive. Costs are further reduced by using free software and only requiring 10% of the power of normal laptops.
Is Libya alone? No, OLPC has also reached tentative purchase agreements with Argentina, Brazil, Nigeria and Thailand.
This initiative demonstrates that the technology is available and that a number of governments have the will. However, there is now a need to provide the content and learning tools that will make the difference. The question is whether the commercial publishing model can be balance with the political one?
Monday, November 20, 2006
A Play with Words
Macmillan is reported as about launch a new audiobook player, called Word Play. This sounds great news and clearly follows what many have said about audio being the next digital wave. However, when you read about this player you can’t help but wonder whether it will fly and how the market will react. It is certainly novel being a device that is pre-loaded with audiobooks, powered by AAA batteries and coming with it own headphones. Word Play can apparently store up to 50 hours of MP3 audio content. However, the device apparently cannot be re-recorded over and the files can’t be burned onto CDs or digitally transferred. The devices will contain three audiobooks by the same author or three genre-specific titles and it is expected to launch in the UK in April 2006 with 16 different players, each priced from £19.99.
The question therefore is whether it is a collectable or a consumable? Will it become a must have fashion icon with slick designer look and feel or a clunky unattractive device to give grandma for Christmas? Will we have collectable colour covers or will they all look the same. Who will service the customer complaints and what is the life expectancy of the product? Its cheap but will it be cheerful? It follows in the footsteps of the Fisher Price MP3 player and one can’t help but wonder if that was the inspiration.
However in the age of the MP3 player why create more devices and more inventory? Why make a single use device? Why have headphones why not just a player and buy the headphones separately – after all you only want one set? Why use AAA batteries which add to the environmental stockpile? Why three books when you can only consume one at a time?
I can see a great opportunity at the station or at the airport but then 50 hours is a long journey and the ability to bookmark and resume and not restart will be very important. Also do consumers only want Macmillan audiobooks and to listen to others differently?
Finally, the price three books for £20. Not bad when you look at Macmillan’s audio list and recognize this is basically a two for three offer without the device. Given the market’s discounting phobia it is easy to see these trading at around £13. An interesting price shift and authors must be excited at the prospect of selling more but receiving less.
I take my hat of the Macmillan for innovation but hold my breath to see what is delivered and the marketing spin and reaction.
The question therefore is whether it is a collectable or a consumable? Will it become a must have fashion icon with slick designer look and feel or a clunky unattractive device to give grandma for Christmas? Will we have collectable colour covers or will they all look the same. Who will service the customer complaints and what is the life expectancy of the product? Its cheap but will it be cheerful? It follows in the footsteps of the Fisher Price MP3 player and one can’t help but wonder if that was the inspiration.
However in the age of the MP3 player why create more devices and more inventory? Why make a single use device? Why have headphones why not just a player and buy the headphones separately – after all you only want one set? Why use AAA batteries which add to the environmental stockpile? Why three books when you can only consume one at a time?
I can see a great opportunity at the station or at the airport but then 50 hours is a long journey and the ability to bookmark and resume and not restart will be very important. Also do consumers only want Macmillan audiobooks and to listen to others differently?
Finally, the price three books for £20. Not bad when you look at Macmillan’s audio list and recognize this is basically a two for three offer without the device. Given the market’s discounting phobia it is easy to see these trading at around £13. An interesting price shift and authors must be excited at the prospect of selling more but receiving less.
I take my hat of the Macmillan for innovation but hold my breath to see what is delivered and the marketing spin and reaction.
Thursday, November 16, 2006
Digital Content will sell all Books
Today we read about Random House’s new promotional preview for Thomas Harris’s his long-awaited novel Hannibal Rising. They plan to post chapter six of the book at www.hannibalrising.co.uk in both print form and as an audio file read by Harris. This is the third third in the Hannibal series and chronicles the early life of Harris’ infamous character Dr Hannibal Lecter.
So what is different and what is exciting about this promotion?
It is not the first to be promoted this way and certainly will not be the last and shows us that digitization offers far more than ebooks. It is about also changing the way in which publishers can use digital content and the Internet to market both to the channel and direct to consumers. Digital Content is the richest form of bibliographic record and in having it publishers can not only promote digital products but physical ones too. Remember only ten years ago, it was often impossible to see a picture of the jacket well expect more “browse inside”, audio clips and even video clips.
Why should publishers digitize today? The answer is simple – because it enables them to reach and respond to what is a changing marketplace and demanding consumer.
So what is different and what is exciting about this promotion?
It is not the first to be promoted this way and certainly will not be the last and shows us that digitization offers far more than ebooks. It is about also changing the way in which publishers can use digital content and the Internet to market both to the channel and direct to consumers. Digital Content is the richest form of bibliographic record and in having it publishers can not only promote digital products but physical ones too. Remember only ten years ago, it was often impossible to see a picture of the jacket well expect more “browse inside”, audio clips and even video clips.
Why should publishers digitize today? The answer is simple – because it enables them to reach and respond to what is a changing marketplace and demanding consumer.
Wednesday, November 15, 2006
Google rules the search waves!
Today we read about the search engines and the dominance of Google in the market. Hitwise analysts at http://www.hitwise.com/ have published their findings of the four weeks up to 21st October, 2006. Google powered a staggering 78% of UK Internet searches and Yahoo it second placed rival a mere 8%. The top four engines Google, Yahoo! Search, MSN Search and Ask.com powered 96.6% of all UK internet searches.
However what was more interesting was their analysis of the share of referrals from search engines which has been increasing to key e-commerce categories. Travel agents received 39% , Appliance and electronics 36% and Insurance 35% of upstream visits from search engines and in the case of insurance this was up 14% in the past six months. A further interesting area is the performance of paid listings and the fact that many leading UK websites receive little to no search traffic from paid listings.
This appears to be a one horse town. Today I downloaded the latest version of Internet Explorer. There sitting proud on the Microsoft toolbar was both Google and Yahoo search books! I went to the news pages of both Yahoo and Google and read the latest general, sports and financial news from around the world.
So we now have to think out the implications re books and the Google’s book program. Ironically, Google today announced its latest Google Books Library Project - the University of Virginia Library. Google will digitize hundreds of thousands of books from the Library and make them searchable online through Google Book Search. With 13 physical locations as well as the original Rotunda, the Library contains more than five million volumes, 17 million manuscripts, rare books and archives, and rapidly-growing digital collections which includes the University of California, Harvard University, University Complutense of Madrid, University of Michigan, the New York Public Library, Oxford University, Stanford University and the University of Wisconsin-Madison.Anyone will be able to freely view, browse and read all books in the public domain and for those protected by copyright, will see the basic background and a few lines of text related to their search. They can also find information about where they can buy or borrow a book.So given the power of Google and their growing content are we entering a truly Brave New World?
source http://www.google.com/press/annc/books_uva.html https://www.netimperative.com/2006/11/13/Google_UK_searches
However what was more interesting was their analysis of the share of referrals from search engines which has been increasing to key e-commerce categories. Travel agents received 39% , Appliance and electronics 36% and Insurance 35% of upstream visits from search engines and in the case of insurance this was up 14% in the past six months. A further interesting area is the performance of paid listings and the fact that many leading UK websites receive little to no search traffic from paid listings.
This appears to be a one horse town. Today I downloaded the latest version of Internet Explorer. There sitting proud on the Microsoft toolbar was both Google and Yahoo search books! I went to the news pages of both Yahoo and Google and read the latest general, sports and financial news from around the world.
So we now have to think out the implications re books and the Google’s book program. Ironically, Google today announced its latest Google Books Library Project - the University of Virginia Library. Google will digitize hundreds of thousands of books from the Library and make them searchable online through Google Book Search. With 13 physical locations as well as the original Rotunda, the Library contains more than five million volumes, 17 million manuscripts, rare books and archives, and rapidly-growing digital collections which includes the University of California, Harvard University, University Complutense of Madrid, University of Michigan, the New York Public Library, Oxford University, Stanford University and the University of Wisconsin-Madison.Anyone will be able to freely view, browse and read all books in the public domain and for those protected by copyright, will see the basic background and a few lines of text related to their search. They can also find information about where they can buy or borrow a book.So given the power of Google and their growing content are we entering a truly Brave New World?
source http://www.google.com/press/annc/books_uva.html https://www.netimperative.com/2006/11/13/Google_UK_searches
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