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Books and literature

The cost of electronic readers and bandwidth constraints in South Africa are keeping a lid of the sale of e-books, resulting in penetration being lower here than in many other markets in Europe, the Middle East and Africa. This is a key finding in PwC’s recent report, South African Entertainment & Media Outlook 2013-2017.

For publishers, there are also concerns about the lack of clear policy around digital copyrights. South African legislation is not in line with the World Intellectual Property Organisation’s copyright treaty, which protects investments in digital media.

The national treasury has also proposed legislation that with effect from January 2014, non-South African suppliers of e-commerce services, including e-books, will be required to register as VAT vendors for sales to South African residents.

Impact of e-books

The impact of e-books on the overall South African market is expected to remain limited in the next five years, according to the PwC’s research. Printed books will continue to dominate the consumer and educational publishing market for some years, but e-books and other digital products present a new way to the market.

Limitations in the SA book market

The South African book market faces a number of limitations because of illiteracy and low incomes, coupled with the challenge of publishing books in multiple languages, which effectively excludes large segments of the population from reading.

Books in South Africa are subject to VAT at 14%, which is higher than in most countries, and this 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.

In addition, millions of South Africans live in places where books are not readily available. According to the South African Booksellers’ Association, there are about 1 600 bookshops in South Africa. About one-third of these are situated in rural areas, according to PwC. Also, illiteracy continues to be relatively high in South Africa. “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 says that the South African Book Development Council estimates that about 51% of households in do not have a single book in their homes, with only 1% of the population buying books and only 14% of the population reading books. Consequently, the consumer book market is smaller than the educational book market.

Declines

“The South African consumer and educational book market has experienced a decline in recent years, falling from R4,1bn in 2008 to R3,6bn in 2012,” according to PwC. “However, with a rise in the sale of consumer books, assisted by a general increase in living standards, the decline will not continue, and revenues are projected to remain in the region of R3,6bn from 2013 to 2016 and reach R3,7bn in 2017.”

Meanwhile, a decline in spending on educational books from R2,8bn in 2008 to R2,2bn in 2012 placed a strain on the total market. The total spend on consumer books fell slightly in both 2009 and in 2010, but this has been on the increase since 2011, says PwC. This segment of the market is forecast to grow at a compound annual growth rate of 2,5%, reaching R1,6bn in 2017, up from R1,4bn in 2012.

Publishers estimate that 30% of all course-related materials are photocopies with students copying content mainly because they have not received the books, or simply because they cannot afford them.