The difference between the US and EU digital markets – the need for a new approach

The 4th Editech Conference in Milan, held on June 9th, was mostly about the fragmented nature of the European digital market. That was not unexpected – the majority of the audience was Italian, and the Italian e-book market is among the smallest in Europe, small enough to say it is virtually non-existing.

One of the conclusions of the conference was that with the exception of the UK, there is no real e-book market in Europe yet. Market shares fluctuate between countries where the first step has been made – such as Spain (1,7%) and The Netherlands (0,8%) – and countries where there is no e-book market to speak of – such as Germany (<0,5%) and Italy (<0,1%).

Several speakers – myself included – pointed out that it has become increasingly clear that in analysing the global e-book market the European and Anglo-Saxon markets need to be carefully separated. Europe consists of many mainly small markets that lack the volume of readers and the level of investment needed to build the platforms, apps, sites and whatnot that are now being developed by US and UK publishers to connect with their readers.

Digital is expensive. For publishers in small markets as The Netherlands and Italy, there is a need for a more cooperative model of business to get the necessary investments of the grounds. This is not the way publishing traditionally works in these territories. So in order to reach the necessary scale, publishers need to change the way they do business.

This was what Kobo’s Michael Tamlyn referred to as the very clear cultural difference in the way the US and the EU do business. European publishers have traditionally worked from a basis of trust: building very personal relationships where both parties can profit. US publishers on the other hand, have always worked much more form a strictly business point of view – in Tamblyn’s words, a more legal approach to things, what led him to describe the difference in approach as one of trust versus contract.

Looking at the way the US market developed, it is clear that publishers were able to adapt to the changing face of digital publishing extremely fast, making a lot of content available in a very short time frame. It is also clear that European publishers are unable to do this. Looking at the Dutch market, it is the lack of content that is one of the main road blocks to a healthy e-book market.

Scale combined with a more conservative approach to business goes a long way in explaining this. But the cultural differences within the EU are at least as big as the one between the US and the EU. So what is needed now is more attention to the way these differences actually shape the e-book market for each and every country, so that publishers may better understand how to grow this market more effectively.

One of the big issues is that most European publishers are not working on a global scale, nor are they interested in it. With the exception of Spanish and maybe French, none of the European languages have a very big reach outside of the country of origin. Where English language books can reach people with a different first language means that e-market for US and UK publishers is virtually limitless. This also poses a threat that is often overlooked: English language books competing directly with a country’s original language and actually making English the reading language of choice in many countries.

In my country, this is already apparent, as it is in Germany after the launch of the Kindle there. This may well be one of the reasons the French government decided to impose a fixed price on e-books. Because language is culture. European publishers would do well to remember that this makes it all the more pressing to get more original digital content on the market.

What was very clear though listening to the talk in Milan that most who were present felt that there was a clear need for facts, not more predictions. More examples from the field, more data, more analysis. We need to see more European publishers sharing their experiences at international conferences. Editech was a good indication how real the need is.

This is complicated matter, as may be apparent from this slightly rambling account. It’s clear we need more and better data of the European market to gain a deeper insight. Sadly, in most countries, this data is lacking. the Editech conference - for me at least - was a good way to collect data and share experiences and I am now hungry for more.

 

Comments

Some more details

Some more details in my blog (currently only german)
http://www.kohlibri-blog.de/2011/06/fur-ein-deutsches-bzw-europaisches-d...

Your blog

Hi there, thanks for commenting and linking to your blog. I found it very interesting. Be good to hear some more about you, if you fancy emailing me; sam.missingham@bookseller.co.uk

Thanks, Sam

European ebook culture

Dear Mr. Snoeren,

thanks for your clear-sighted article.

I'm still working on the same themes for the german book marked and asking for an european concept of developing, producing and distributing econtent.

In my opinion it makes no sense to push european content through the bottleneck of the bermuda triangle (Amazon, Apple, Google) to european customers.

Let's build the eropean solution.

Best regards

René Kohl

 

European ebook distribution platform

Maas's picture

Dear Rene,

I completely agree that we shall build an European platform.

I would like to inform you that we have done the IT job there: we have done a complete solution that is distributing ebooks to ebook reading devices basing on e-ink. The platform includes a Content server which can be kept by ebook distributor, includes partner programs (detailed ebook shops that we call Bookstores, which is an European addition to what Amazon has with Kindle), client aplication (not a "light" website!) that is running on an ebook reading device based on e-ink, where the final user may browse the ebooks, choose the ones he wants, pay for them (PayPall at the moment - "only one click" ebook purchase, without nececity to give a credit card details every time) , then download them and read. Of course the ebooks are secured with ADE DRM (others DRMs are also possible but the devic must support it), that the ebook reader and system supports.

When I say that this is European model I mean that the sales do not need to be centralised as from Amazon - it is possible to have one content server (it can gather ebooks from more then one publisher) and a lot of Bookshops (there is a possibility for a ebook marchand to create his own price policy, attract HIS customers by RSS channels, personalise the "look" of his Bookstore that appeares on e-ink ebook reader - we just thougth that in contrary to USA where people move by cars only or buy through internet, people in europe they like to talk to their own book marchand when they go to a small paper book store, so why not include that in the ebook distribution solution).

We start to run this solution on 01.08.2011 with the content of the biggest Polish publishing group called PWN in Poland and we will of course present it in public during the Frankfurt Book Fair in Germany.

So, from the point of the IT the solution is ready. It is rather now a question of publishers and distributors how they would like to follow.

If you look at the situation

If you look at the situation in Holland, then it's clear that growing the e-book market will need an enormous amount of politics - that will be the case in any country where there is an active policy of subsidizing national culture. In tehse territories, elements such as pricing and lending are subject to poltical approval and/or action. I feel the French decision to go for a fixed price policy for e-books against EU regulations is partly motivated from the fear of books in their own language losing ground to other languages, such as English, which are backed by companies with vash supplies way above the budget of most countries.

Digital markets

This kind of approach seems, imv, deeply biased (or even crooked) inasmuch it deals with the building of the e-book market, as if it were the goal to achieve, when authors, publishers and readers actually deal with written reading stuff.

If e-reading, with its constraints on hardware, software, communication costs, is additionally burdened with an additional linguistic (cultural, you're right) imperialistic trend, it will take a lot of economic and political pressure to grow significantly.

 

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