E-Books: Evolving Markets And New Challenges

Author (Corporate)
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Series Details February 2016
Publication Date February 2016
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With an estimated value of US$151 billion, book publishing gradually evolved into a truly global business early in the 21st century. As yet, however, e-books are nevertheless significant only in a relatively small number of markets. These are led by the United States (13% of the book market) and the United Kingdom (11.5%), with Germany (5%) developing more recently.

The e-book market in the EU has taken off only in recent years, and in 2014 it still represented only 1.6% of the total book market in the leading EU markets.

The advent of e-books transformed the usual linear supply chain into a global network, with competing distribution channels and retail outlets, pushing publishers and booksellers to establish a digital strategy. Indeed, e-books face specific challenges with regard to protection from piracy, lending, and copyright issues. More importantly, multinational digital companies choose to set up European headquarters in specific Member States due to their favourable tax regimes and/or lower value added tax (VAT) rates.

To partly offset this phenomenon, the EU introduced new rules from 1 January 2015, according to which VAT on electronic services is levied where the customer is based, rather than where the supplier is located.

In contrast to print books, e-books cannot enjoy reduced VAT rates, since they are classified as ‘electronically supplied services’. While the average VAT rate for print books across the EU is 7.6%, the corresponding rate for e-books stands at 19.9%, thus placing them at a disadvantage. The European Commission has already begun a reflection on the VAT regime, including considering the application of reduced VAT rates and is to announce its conclusions by the end of 2016.

Written by Ivana Katsarova.

Source Link http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/577954/EPRS_BRI(2016)577954_EN.pdf
Related Links
ESO: Background information: Judgments in Cases C-479/13 and C-502/13 Commission v France and Commission v Luxembourg http://www.europeansources.info/record/press-release-judgments-in-cases-c-479-13-and-c-502-13-commission-v-france-and-commission-v-luxembourg/
ESO: Background information: Antitrust: Commission market tests commitments proposed by Penguin for the sale of e-books http://www.europeansources.info/record/press-release-antitrust-commission-market-tests-commitments-proposed-by-penguin-for-the-sale-of-e-books/
ESO: Background information: Antitrust: Commission opens formal investigation into Amazon's e-book distribution arrangements http://www.europeansources.info/record/commission-opens-formal-investigation-into-amazons-e-book-distribution-arrangements/

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