South African book market is under pressure

A study conducted by consulting firm PwC exposes severe pressures faced by the South African book reading market but also shows hope of improvement coming from the e-book trends albeit within its own constraints.

In a statement released yesterday the PwC highlighted findings of its study which is captured inside a report titled ‘South African Entertainment & Media Outlook 2013-2017. The statement said 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.

The statement noted that the South African consumer and educational book market has experienced a decline in recent years, falling from R4.1 billion in 2008 to R3.6 billion in 2012. “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 R3.6 billion from 2013 to 2016 and reach R3.7 billion in 2017.”

The statement further noted that the decline in spending on educational books from R2.8 billion in 2008 to R2.2 billion 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. This segment of the 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.

PwC observed that books in South Africa are subject to Value-Added Tax (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.

Vicki Myburgh, Entertainment & Media Industries Leader for PwC Southern Africa, said “Illiteracy continues to be relatively high in South Africa. 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 other initiatives in place to encourage the reading of books in the market. “For instance, Ambassador of Arts and Culture, Tebogo Ditshego, founded the Read a Book Foundation to encourage South Africans to read one book a month. The FunDza Literacy Trust launched Cover2Cover Books with the aim of improving literacy among teenagers by publishing teen fiction.”

The statement said South African Book Development Council estimates that about 51% of households in South Africa 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.

The statement added that the Department of Basic Education’s Accelerated Schools Infrastructure Development Initiative encourages a higher proportion of schools’ budgets to be spent on textbooks and basic facilities such as desks and libraries. Despite R2.2 billion being spent on educational books in 2012, challenges still take place in the market. Getting text books to the class room remains a major challenge.

The statement added that 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. There are a number of initiatives in place promoting electronic reading such as, M4Lit (mobile phones for literacy) a pilot project creating a mobile novel and publishing it on a mobisite and on MXit in order to explore ways of supporting leisure reading and writing using mobile media.”

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

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.”

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