9/05/2008

Is the electronic book market in the UK doomed to die?

The Waterstones ebook site has been up for barely a day and yet it's already possible to feel concern that it's standing on wobbly foundations, ready to keel over the instant a sufficient number of the people buying the £199 Sony Reader from Waterstones do a quick google and suddenly find themselves on American sites like Fictionwise.com or BooksonBoard.com, with a far larger and very significantly cheaper range of titles available. And before very long, they're going to realise the majority of those books are available in widely used formats such as mobipocket* that simply won't work on the Sony Reader**.

Beyond that rather unfortunate fact (I wouldn't want to be standing at the help counter when an irate customer, suddenly aware of how desperately limited his choices are, comes storming in and demanding a refund on his Reader), some books on Waterstones' site are not unfairly priced, including my own Stealing Light and several other titles from Pan Macmillan, at about £4.75; this is cheaper even than the discounted price on Amazon UK. But it doesn't take long to do a quick compare-and-contrast on the price of other books available both here and in the States to find many titles are available from US-based sites for almost half of what they are here. And the internet being the great leveller of international boundaries it is, the money for ebooks will inevitably flow towards the same goods at a cheaper price.

As much of a supporter of ebooks as I am, I feel the Sony Reader might be judged a failure by Christmas, in the UK at least. The Sony Reader is a fine device, but far from perfect. Despite the fact the latest model of the Reader can now handle the Epub format, it's a format as yet far from universally adopted by ebook retailers, with Waterstones being the exception. The machine also isn't immune to crashing from time to time. The stated '7,000 page turns per charge' may be little more than hyperbole. The fact remains that for many who don't share my lust for gadgets, the machine is still too expensive, deliberately crippled in the range of formats it can read, and the titles available from UK publishers limited and costly. Once this becomes obvious to people new to e-ink technology, they will turn away in droves, making this yet another missed opportunity.

It doesn't help much that ebooks in the UK are susceptible to VAT. This is apparently because books are regarded as 'digitised product' under UK law; this further drives up the price, once more pushing the British consumer towards other shores for their ebooks.

To my knowledge (a quick google search doesn't bring up any results to confirm my vague memories) books were originally made exempt from VAT because it was felt that knowledge should not be taxed. This, however, was long before the advent of the digital age, and it's clearly time the law did some catching up.

The ebooks on sale from Waterstones have one thing in common that makes them different from other VAT-levied 'digitised products' out there today: they all have an ISBN, and they all already exist as paper books. The former fact alone should be enough to give an ebook VAT-exempt status. But at the very least British publishers urgently need to look towards changes in the law to have ebooks given a VAT-exempt status.

It's still early enough to assume that British publishers are preparing price drops and deals that will lower the cost to the British consumer of buying ebooks to something more palatable to their wallets, and certainly there are plans to expand the numbers of titles available, but I'm concerned at this moment in time that it might prove to be too little too late. Some ebooks listed on the Waterstones site cost more than the equivalent hardback; according to one user posting to the mobileread.com forum, it would cost less for him to purchase the hardback of one particular title and have it shipped to him in Australia than it would to buy the ebook from Waterstones.

I can only hope such exorbitant pricing will eventually prove to be an accidental, rather than an intentional strategy.

*It should be said in fairness that Mobipocket is owned by Amazon, which in itself may well be the reason the format won't work on the Sony Reader; perhaps Amazon has refused to license the format to Sony since they're directly competing in the ebook market.

**Unless, of course, you're sufficiently tech-minded to find and implement some of the available tools to strip the DRM from mobipocket books, rendering them readable on the Sony Reader, as I have. If I hadn't known this before I purchased my own Sony Reader, I think I would have saved my money.
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