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SA not ready for e-books

SA not ready for e-books

High bandwidth costs, low access to e-readers and choking e-commerce legislation will keep South Africa’s adoption of e-book technology “limited” for the next five years, while the hard-copy book market continues to struggle.

This is according to PwC’s entertainment and media outlook 2013 – 2017, which notes a decline in both physical entertainment and educational book sales – as well as a slow uptage of digital content in the country.

In the report, PwC said that, while a number of local e-commerce services have become established in South Africa that sell both physical and e-books online, the cost of e-readers and bandwidth constraints make the downloading of books difficult in some areas.

The firm also highlighted proposed legistlation by National Treasury, which would require non-South African suppliers of e-commerce services (for example, electronic books, music and programmes) to register as VAT vendors in the country for output tax on its supplies.

“This has resulted in e-book and e-reader penetration being lower in South Africa compared with many other markets in Europe, the Middle East and Africa (EMEA),” PwC said.

“For publishers, there are also concerns about the lack of clear policy around digital copyrights. Currently South African legislation is not in line with the World Intellectual Property Organisation’s Copyright Treaty (WCT), which protects investments in digital media,” PwC said.

A nation of illiteracy

According to PwC, the South African book market “continues to face a number of limitations in the wake of the high illiteracy rate and low incomes, coupled with the challenge of publishing books in multiple languages which effectively excludes large segments of the population from reading”.

“Illiteracy continues to be relatively high in South Africa,” said Vicki Myburgh, Entertainment & Media Industries Leader for PwC Southern Africa.

“[However], the government is taking steps to address this as part of its Industrial Policy Action Plan, with the goal of eliminating illiteracy by the end of the decade.”

PwC noted that books in South Africa are subject to Value-Added Tax (VAT) at 14%, which is higher than in most countries and has contributed to the high retail prices that tend to make books out of the reach of the majority of consumers.

“As a result, consumers are more likely to read newspapers and magazines,” PwC said.

According to data collected in the report, South Africa’s consumer book market is smaller than the educational book market, though both markets are expected to pick up by 2017.

The consumer and educational book market as a whole has fallen from R4.1 billion in 2008 to R3.6 billion in 2012 – however, this is expected to increase slightly to R3.7 billion by 2017.

“With a rise in the sale of consumer books, assisted by a general increase in living standards, the decline will not continue,” PwC said.

The consumer book market is forecast to grow at a compound annual growth rate (CAGR) of 2.5% to reach R1.6 billion in 2017, up from R1.4 billion in 2012.

However, the educational book market is expected to fall by a negative CAGR of 1.1% to R2.1 billion in 2017 – down from R2.8 billion in 2008.

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BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as he receives it. He is believed to be close ...
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Join the Conversation ( 9 comments)
  • Duncan

    If the publishers were not as blatently greedy then perhaps they would be doing better. I have little sympathy for them. If you are stupid/ greedy enough to price your virtual products at pretty much the same price as your physical products (when there is virtually zero overhead), you cant complain that sales are bad.

    • Mossel: A Tale of One Mollusk

      Most ebooks I know of cost about 60% of the price of physical books.

      • duncan

        There is obviously some variance. I often see prices of ebooks being 10% or less under the price of full retail physical books, but also in some cases the ebooks cost more. In any casen even 60% is too high. Physical books cost a lot because they need to cover origination costs, printing costs, logistics, as well as handle problems like overstock.
        For ebooks, once the book is originated, the costs thereafter are negligible. The publishers need to retire all the old school managers, and learn that they are in the information business, not the dead tree business. They need to stop subsidizing the dead/ dying parts of their business, and get with the times.

        • Quentin

          I take it you run a publishing company do you?

          • Duncan

            No, I don’t, however it is something I have looked into as I am interested in publishing my own work. I have personally decided the best route would be to go electronic only, unless some publisher decides that it is worth their while to do the dead tree route. I doubt they would accept my terms though as most publishing houses don’t give the authors a very good percentage of the profits. They are almost as bad as the film industry where blockbusters make no money on paper o the studios can screw the poor bugger’s who are supposed to get a percentage of the profits.

          • Quentin

            Thanks for the reply.

            I’d just note that running a publishing company and self-publishing are different things in terms of costs, and in other ways. Ambrose Bierce, I believe, once wrote that publishers drink wine out of the author’s skull. Variants of this unhappy reflection have occurred to me over the years, as a writer. More recently, working on the other side of the desk, in publishing, I feel somewhat remorseful of my previous attitude. I think the bad things about publishing that people currently make so much noise about have often, and to a greater or lesser extent, been true, but it looks very much like no one will see how much we actually owe publishers until they have effectively been destroyed by a digital version of China’s 1966 Cultural Revolution.

            As a rule, I’d say that people don’t go into publishing out of greed. If they do, they are exceptionally stupid, as it’s barely a world in which to make a living, let alone a profit.

            I write this without hope of being believed, as I say, until it is too late.

          • Irma

            They were once indispensable, and clearly highly profitable. In the same way that recording studios and record labels were once mandatory. It was the only way to make high quality recordings and get them distributed. For those that want the single package service they can still go to a publisher, but it is also true that someone can choose to publish themselves without a huge amount of capital. The only external service I’d use is an editor, just as I’d use a mastering studio for the final stage of producing music.

            Even film is becoming more accessible. Quality digital equipment is now within the reach if independent film makers and distribution is moving to digital as well.

            Previously publishers and record labels acted as a filter. They decided what would be popular and that was essentially what they promoted. Quality of the work was hardly a factor. If your work fell outside their narrow view it was nearly impossible to get it out to the public.

            That they are likely to become history is not a bad thing.

  • Mossel: A Tale of One Mollusk

    Meh, print media is dead. Cant remember when last I picked up a magazine or newspaper. Plenty of older folk I know are now looking to Kindles and iPads for reading. It’s just easier to than having to carry 10 books with you.

  • Anne-Sophie Lanier

    I happen to work for a company distributing ebooks and actually South Africa is one of the fastest growing markets for us.

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