The Global eBook Report: Current Conditions & Future Projections. Update October 2013

Amazon can up its margin by the difference, as it forwards only those 3 percent to tax authorities in Luxembourg. Competitors obviously consider this as a huge challenge, given Amazon’s dominance on ebooks. (Amazon makes UK publishers pay 20 percent VAT on ebook sales, The Guardian , October 21, 2012 ).
    In Germany, the debate on tax has echoed at first less strongly than its expansion in both market share and scope of services. But the perspectives have largely changed in the first half of 2013, in the light of successful “Buy local” marketing campaigns launched by independent local booksellers, a rising critical debate in the media on Amazon’s very modest tax paying (German overall turnover of $8.7 billion contrasted with a mere 118 million of profits for all its European holding in Luxembourg), together with a stand off with unions, and several strikes at its German warehouses. ( Frankfurter Allgemeine Zeitung , 12 July 2013)
    Earlier developments: 2012 and before
    Today’s ebook environment can reasonably be described as having been triggered, directly or indirectly, by the launch of Amazon’s Kindle reading device in 2007. The device was the part visible to consumers, in a much more complex and proprietary, highly integrated system that consisted of Amazon’s leading online platform for selling (printed) books in the US and most major European markets, plus China; a phone hookup allowed the direct ordering and downloading of digital books, and the agreement with publishers — at first the Big Six in the US — to make available a wide catalog of attractive titles under this system.
    By mid 2012, the Kindle and its successor devices, notably the color Kindle Fire, were seen as the most popular reading platforms for ebooks internationally, and Amazon set up localized Kindle shops via its website for not just the US but also the UK, France, Germany, Italy, and Spain.
    In Japan, Amazon entered into an agreement with 40 publishers, including Gakken and Kadokawa, on the distribution of their ebooks for the Kindle in Japanese (Asahi Shinbun, May 7, 2012 ).
    In August 2012, the Kindle was also launched in India with a catalog of over 1 million titles priced in rupees, making it the biggest ebookstore on the subcontinent.
    Amazon, the Kindle, and the related offers — from author services to lending books as a prime customer (available so far only in the US) — form an increasingly integrated sphere, of which significant parts are not available via other platforms. This connection is demonstrated by Amazon’s claim that 180,000 Kindle-exclusive titles are now available on that lending library, and altogether Kindle-exclusive titles have seen over 100 million downloads by late August 2012 ( press release , August 28, 2012).
    On the other hand, the Kindle device was originally sold only via Amazon’s website, but as of September 2011, it was also made available in other retail channels, such as the Staples office supply stores and the German Karstadt department stores. In May 2012, another — much debated — partnership was been announced with the British book chain Waterstones ( buchreport , December 22, 2011, “Amazon verkauft Kindle-Geräte über Karstadt und Staples”).
    The first Kindle device was the game-changer for the emergence of today’s ebook market, but various surveys indicate a clear migration of customers from specialized ereading devices to tablet computers. Between August 2011 and May 2012, the preference for the Kindle as the device of choice for reading dropped among US consumers from 48 percent to 35 percent; Amazon’s tablet, the Kindle Fire, seems to have topped Apple’s iPad tablet among ebook users (“Consumer Attitudes Toward E-Book Reading,” BISG study quoted in buchreport , August 2, 2012 ).
    The total revenue from digital content downloads of Amazon was estimated at $1.85 billion in 2011, placing the platform at a rank of 21 among all global ecommerce vendors (“The world’s most successful digital media companies,” paidcontent.org 50, July 31, 2012 ).
    In the UK, Amazon accounts for 21 percent of the entertainment market (according to Kantar Worldpanel, as quoted in The Bookseller , July 24, 2012 ). In Germany, a study by the University of Hamburg on a panel of 2,000 consumers estimated that 57 percent of German ebook buyers acquired at least some of their digital reading at Amazon in 2011 (Michel Clement and Felix Eggers, “E-Books und E-Reader, Kauf und