Books vs e-books in Estonia Tauno Vahter editor-in-chief Tänapäev Publishers
Estonian bookmarket: basic facts Around 120 active book publishers Last year 22 publishers published more than 20 books a year VAT on books was raised in 2009 from 5% to 9% (also on textbooks). Regular VAT rose from 18% to 20% The VAT for E-books is 20%. Currently the Ministry of Culture says they will not accept e-books as books, in taxation they are classified as services. There have been threats to establish same rate for paper books and e-books i.e. to make VAT for both 20%. Despite some (mainly French) EU lobby, we see no change in near future.
Year New titles Total print run 1991 1992 1654 23 million 1557 16 million 1993 1965 12 million 1998 3090 6 million 2000 3466 6 million 2002 3458 5,3 million 2008 4685 7,2 million 2010 3760 5,5 million 2011 3716 4,4 million
Biggest publishers by number of titles: 2008 2009 2011 Ersen (ca 235) Varrak (201) Varrak (154) Varrak (ca 225) Ersen + Amor (ca 195) Ersen (150) Sinisukk (203) Koolibri (180) Egmont (143) Koolibri (203) Tänapäev (125) Koolibri (137) Tänapäev (125) Egmont (121) Tänapäev (127) Ilo (105) Sinisukk (84) Sinisukk (107) Egmont (94) Ilo (84) TEA (80) Ajakirjade k. (84) Pegasus (76) Eesti Raamat (66) TEA (74) EPL (75) Ajakirjade Kirj. (53) EPL (69) Ajakirjade k. (69) Pegasus (46) Total growth 7% - 26 % -5%
The euro-panic and economic crisis Estonia adopted euro 1.1.2011 Great concerns before, whether anyone will buy books then? Things did get more expensive (especially services), but: THERE WAS NO SIGNIFICANT EFFECT ON BOOK SALES. 2011 January sales were similar to 2010 January. After worst part of economic crisis (for us it started in January 2009), market finally started to improve in summer 2011. Since then most months have had growth in sales compared to previous periods. We have ca +10 compared to 2011, whole market is slower, about +2 %.
E book publishers There are about 10 companies operating in market, but in reality more than 90% of the e-book market is controlled by two companies: EDRK and Digira. About 85-90 % of all e-book sales goes through EDRK, ca 10% through Digira. EDRK is in cooperation also with Alma Littera. www.edrk.ee www.digira.ee EDRK uses social DRM (watermark) and mainly epub format, Digira also uses some DRM license. EDRK also offers e-book sales platform to publishers, so they could sell directly from their own website. (Question of %.)
E-books: market share and sales In total approximately 1500 e-books are on sale in Estonian EDRK estimates sale of 20 000 e-books in 2012 Current sales: ca 1500 e-books in total sold in a month Statistical thruths: sales are up more than 200% compared to 2011, but it is still only 0,3 % of the whole market. Comparison: ca 7-8 % of books are sold in Internet bookstores (paperbooks + e-books combined). Bestselling e-books sell ca 200-400 copies, ca 20% over 100. Very price-competitive, as buyers expect 30-50% lower prices than for paper books, which makes earning profit tricky how to earn anything when books costs 4 euros?
Main problems with e-books With translated books it is very hard to pay a new advance for the foreign publisher, as the book does not sell enough to earn the advance. We try to settle a fixed %. EDRK and Digira operate like wholesalers they will make the epub file, add ca 10-15% to publishers price and give it to retail shop. Some publishers pay a percentage for making the epub, some pay a fixed sum per book. Publishers do not want to give some e-books to libraries, as they hurt e-book sales. After some bestsellers were given to libraries, the e-book sales for these dropped. If VAT is 20%, wholesaler 15%, shop 25%, author 15-25%, translator 10-15%, from where to make profit?
E-magazines EDRK is mainly dealing with e-books, Digira has done lately more e-magazines. The cultural magazines (on theatre, literature, cinema etc) are issued by a state financed company. These magazines have been made available as emagazines. Numbers for last three months: 1259 downloads, 1129 of them FREE issues. Magazines sold with full price: 46. Most copies are sold to Estonians living abroad. E-orders for the whole year: ca 20 per magazine. E-newspapers have around 1000 subscribers (printed 30 000) Conclusion: good idea and functional design but almost no sales or growth at all despite good media coverage.
E-books in libraries Project ELLU by Tallinn Central Library: any registered user can read for free e-books, that have been given there on permission by author and publisher. Reader has to be online to be able to read the book. Reader cannot download the file, text is visible only online on screen. Currently ca 400 titles available for free. Project funded by the state. 2012 data by October: 1200 reg. users, ca 4500 books loaned. A few libraries loan e-books with the e-reader device. After 35 loans library has to buy a new license from publisher. Most loaned books are new books (crime, fiction). Classical and academic literature has almost no readers as e-books. Problems: library wants copies cheaper and for longer period, publishers are afraid this affects sales of e-books.
ELLU: digital library environment
digital library reading platform ellu.keskraamatukogu.ee
E-textbooks: Koolibri model In future all new textbooks should be available also as e-textbooks. First e-textbooks came to market in 2012. Two main textbook publishers Koolibri and Avita (Bit) have chosen different paths: A)focus on e-reader or B) interactivity. Koolibri is now adapting paper textbooks to e-textbooks for grades 1,4 and 7 all for Ipad. They sell through Apple ibooks. E-textbook is ca 10 % cheaper in shop, but all students must have an Ipad (Ipads belong to the school). About 200 users now. Problems with selling the license: every license must be bought separately, must be a registered Apple user. More information: www.koolibri.ee koolibri@koolibri.ee
Koolibri e-textbooks These e-textbooks have first been paper textbooks, which are now digitalized. Pupils can draw, answer questions, listen to sounds (for instance birdsongs), move objects etc. E-textbook file download costs ca 5 euros. Considering expenses this is not profitable, but clearly a promotional stage. Pupil s Ipads are not linked to the teacher s system.
E-lesson / Avita model Avita has decided to focuse on generally interactive learning programme, not so much e-textbook in tablets. First e-lesson programme is 4th grade Geography, which is currently on (free) testing in 50 schools. Next two e-lessons in 2013, probably five more in 2014. In future this will be sold in form of licenses: one license per year. Price per pupil depending on size of class. Future question: will all future materials be spread through a governemnt operated platform/portal or every company operates independently?
E-lesson Lesson outline with illustrations (graphics, maps, animations, simulations, videos etc) Additional material for various level of students Worksheets, quizzes, tests, answers A teacher can adjust e-lesson the way she/he wants and add her/his own material to it. Over 90 % of teachers recommend the programme and say it saves a lot of time in preparing for the lesson. 1/3 of pupils have better test results (1,5 % worse). Avita experience shows that e-lesson means better test scores than e-textbooks, which actually worsened the test performance. Avita contact: info@avita.ee
E-lesson (teacher s display panel)
E-lesson (teacher s text)
E-lesson (what pupils see)
Feedback on e-textbooks Positive feedback Pupils are very interested in the programs Preparing for the lesson takes less time for teachers Adding new multimedia draws attention and gives new possibilites Negative feedback The biggest myth is that e-textbooks are cheaper. In reality they are much more expensive than paper textbooks. There are signals that although pupils like e-textbooks, their test results are actually weaker than before. There are still many questions about common platform.
Books are no more threatened by Kindle than stairs by elevators. - Stephen Fry
Trends in recent years total print runs have dropped average print run is 1000 copies for translated new authors often even 500-600 quite small translated books are very expensive print run is small For instance a 300-page paperback fiction book can cost 25 euros because copyright, translation and printing costs the same but print run is less than usual.
Translations (63% from all books) are mostly done from English (66 %) 8% from German 5% from French 4 % from Russian and Finnish Not enough local authors. Most succesful export character is probably Lotte. From new novelists crime author Indrek Hargla is being translated quite a lot.
Estonian bookmarket in total turnover There is no clear estimate, how big the market is. The total 2011 turnovers of ten biggest publishers all together is appoximately 20 million euros. This probably makes about 50-60% of the whole market.
2011 financial data By turnover biggest publishers are (2011 data): Avita 3,69 million (3,62 in 2010) (textbooks) TEA ca 3,57 million (3,57 in 2010) (vocabularies, reference, textbooks, language school etc) Varrak ca 3,2 million (3,5 million in 2010) (regular publisher + bookclub and some shops) Koolibri ca 2,9 million (2,5 in 2010) (mainly textbooks) 2011 data is not available yet, but it seems several publisher have better sales than 2010. But some of the big publishing houses also have significant economic problems and debts.
Sales Most of wholesale operates through two big companies: Apollo (previously Finnish, now sold to Estonians) Rahva Raamat (Estonian-based). Market leader. They also own the biggest retail bookshops This is not a good situation for publishers: wholesaler and retailer are the same company, so they can put a lot of pressure of publishers Their turnovers are approximately 15 million EUR. Both have lately invested heavily in new bookshops in different towns As supermarket sales are growing, competition between chains is big, who gets a better deal. about 15% is sold through supermarkets (and growing)
What sells in Estonia? (2011 bestsellers) 1. A. Luigela Healthy food (local author). (About 14 000 cps) 2. TEA Encyclopaedia binding 6 and 7 ca 8000 3. N. Kaarma Nadia s Cakes (cooking) ca 7700 4. Christmas at Home (cooking, decorating) ca 7200 5. P. Kula Prepare for School ca 6000 6. A. Kasekamp History of Baltic States ca 6000 7. 101 Holy Sites in Estonia ca 5700 8. History of Time (graphic history atlas) 5600 9. New Traffic Law ca 5500 10. Christmas Carols and Fairytales ca 5500
Fiction top 2011: 1. I. Hargla Apothecary Melchior 3 (ca 3200) (e-book ca 100) 2. Viivi Luik Shadow Theatre (ca 3200 ) 3 I. Hargla Apothecary Melchior 1 (ca 2700) 4. P. Coelho Aleph (ca 2200) 5. I. Hargla Apothecary Melchior 2 (ca 2100)
Bestsellers in 2012 (3000 copies and higher) Estonian originals: Kristiina Kass Teacher Kusti haunts. Popular children book. Tõnu Õnnepalu Mandala (one of most popular novelists) Daniel Vaarik Intern Diary (funny memoirs about early 90s) Tiit Pruuli Anti-Lebanon (Estonian hostage-crisis in Lebanon) Translations: S. Collins Hunger Games / W. Isaacson Steve Jobs E.L. James Fifty Shades of Grey L. Svensson Birdsong (book that sings 150 birdsongs)
Money Wholesale usually adds 15-20 % to publisher s price Bookshop gets 30-35% from retail price Most people working on book (author, translator, designer etc) are all on contract they do not work in publishing houses usually only textbook publishers employ designers and layout setters.
Piracy and e-piracy has not been a very big problem last 12 years still some smaller publishers occasionally try to publish copyrighted books for free In 2012 big scandal, because two companies sold books (mainly cooking and gardening) by Estonian authors in Lithuania and Latvia without permission from authors. Names of authors were in some cases deleted from books. Case still open. E-piracy yet not a big issue. Most files sold are epub format, very little DRM is used.
Electronic services Most important bookshops and e-book shops: www.apollo.ee www.rahvaraamat.ee www.raamatukoi.ee digiraamat.delfi.ee Digikogu.ee
AITÜMA / THANK YOU!