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THE PHILIPPINE BOOK PUBLISHING INDUSTRY ROADMAP
A project of the Book Development Association of the Philippines By Andrea Pasion-Flores
Trade and Industry Updates Novotel, Quezon City, 27 October 2015 BDAP GA, 15 January 2016 NBDB Kapihan, 31 March 2016
Fully Integrated into the Global Economy
ASEAN aims to become a more dynamic and stronger segment of the global supply chain and is determined to look beyond the borders of the ASEAN Economic Community.
Single Market and Production Base
The AEC envisions ASEAN as a single market and production base characterized by free flow of goods, services, and investments, as well as freer flow of capital and skills.
Towards the AEC:Four Objectives of AEC 2015/20
• A single market and production base • A highly competitive region • A region of equitable economic development • A region fully integrated into the global economy
A look at the Book Publishing Industry
• Current status locally and in comparison to the markets in the region and the world
• SWOT • Vision/Mission • Goal setting • Creation of industry logical framework • Consolidated Action Plans (done by participants)
Methodology
Global and Regional Book Markets Review
Philippine Book Industry Review
Industry Analysis
Goal Setting
Logical Framework
(Map)
ASEAN Economic Integration
ASEAN vision 1997: “A stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment and freer flow of capital, equitable economic development and reduced poverty and
economic disparities’ by the year 2020.”
ASEAN Population and MarketPo
pula
tion
in M
illio
ns
0
350
700
1050
1400
ASEAN China India
12401350
626
ASEAN GDP 2013Country/Economy
GDP (US$ billions)
GDP per capita (US$)
Ranking among ASEANSingapore 295.7 55,182 1
Brunei 16.11 38,563 2Malaysia 312.4 10,514 3Thailand 387.2 5,779 4Indonesia 870.3 3,475 5Philippines 272.0 2,790 6Vietnam 170.6 1,911 7Lao PDR 10.0 1,646 8Cambodia 15.7 1,008 9Myanmar 56.4 869 10(Source: World Bank)
Global Competitiveness• Negative Factors: • Corruption • Inadequate supply
of infrastructure • Tax Regulations • Inefficient
Government Bureaucracy
• Inadequately educated workforce
2004 2009 2012 2013 2014
Malaysia 29 21 25 24 20
Thailand 32 34 38 37 31
Philippines 66 71 65 59 52
Indonesia 72 54 50 38 34
Source: GCI 2004, 2009, 2012, 2013, 2014
WEF, GCI 2014-2015Country/Economy
Rank out of 144 Score (1-7)
GCI ranking among ASEANSingapore 2 5.65 1
Malaysia 20 5.16 2Thailand 31 4.66 3Indonesia 34 4.57 4Philippines 52 4.40 5Vietnam 68 4.23 6Lao PDR 81 4.08 7Cambodia 95 3.89 8Myanmar 134 3.24 9Brunei - - -
GLOBAL AND REGIONAL BOOK MARKETS
12
20 largest markets1 account for 84% of the publishing business 6 largest markets account for 60% ((US, China, Germany, Japan, France and the UK)
Source: International Publishers Association
1Top Markets by Rank: USA, China, Germany, Japan, France, UK, Italy Spain, Brazil, Rep. of Korea, India, Canada, Turkey, Australia, Russian Federation, Netherlands, Poland, Belgium, Switzerland, Norway
Total market value of books (World) = €114 billion
Growth of Book Markets reflect Economic Growth – Demand for Books and Educational Materials
The World of Books16%
84%
Top 20 markets-84% Top 6 markets-60%
Rest of the world
Top 20 Book MarketsCountry
Year Net Revenue (in million €)
Market Value (in million €)
New Titles per million inhabitants
GDPpC(PPP) (in US$)
USA 2013 19,563 27,400 959 53.143China 2013 9173 15,342 325 11.904
Germany 2013 - 9,536 1,156 43.332
Japan 2013 - 5,409 613 36.315
France 2013 2,639 4,401 1,008 36.907
UK 2013 4,662 3,875 2,875 36.209
Italy 2012 - 3,110 1,002 34.303
South Korea 2012 - 2,974 795 33.140
Spain 2013 - 2,708 1,626 32.103
Brazil 2013 1,645 2,239 104 15.034
Canada 2013 (est.) 1,496 2100 - -
Turkey 2012 1,198 1,752 561 18.975
India 2013 (est.) - 1,680 - -
Russian Federation 2013 - 1,582 699 24.120
Netherlands 2012 - 1,431 - -
Australia 2013 (est.) - 1,373 1,176 43.550
Poland 2013 646 1,025 353 23.275
Taiwan 2013 - 855 1,831 41.581
Switzerland 2012 (est.) - 828 - -
Sweden 2012 214 783 - -
Top Markets for the English Language
Country Rank Year Publishers Total Net Revenue (in million €)
New Titles and re-editions per 1 million inhabitants
USA 1 2013 27,400 959UK 6 2013 4,662 2,875India 13 2013 1,680 n/a
Booksellers Oct 15, 2015 Headline : India market supersedes UK
16
Nielsen’s India Book Market Report tries to quantify a complex market, valuing Indian publishing at $3.9 billion and pegging growth at 20% annually.
ASEAN New Titles per Million InhabitantsCountry New Titles
PublishedPopulation Year New titles
published per million people
Rank
Singapore 9952 5,312,400 2012 1873 1
Malaysia 19171 28,758,968 2011 667 2
Vietnam 24589 86,025,000 2009 286 3
Brunei Darussalam
91 394,400 2009 231 4
Thailand 14000 66,277,335 2009 211 5
Indonesia 30000 249,865,631 2013 120 6
Myanmar 4000 48,453,000 2000 83 7
Philippines 7850** 100,096,496* 2014 78.5 8
Lao PDR 88 4,871,472 1995 18 9
Cambodia NA
*As of July 2014; Source: http://www.worldometers.info/world-population/philippines-population/ **NLP, through NBDB
Title production: Selected countries, by number of titles per 1 million inhabitants, and GDP per capita, PPP From IPA 2014 Report
SG Fast Facts on Reading and Writing
19
PHILIPPINE PUBLISHING INDUSTRY TODAY
Press and Literature, a Core CBIPress and Literature includes the following economic activities: • Authors, writers, and translators • Newspapers • News and feature agencies • Magazines and periodicals • Book publishing • Cards, maps, directories, and other printed materials • Pre-press, printing, post press of books, magazines,
newspapers, advertising materials • Wholesale and retail of press and literature (book stores, news
stands, etc.) • Libraries
Value Added and GDP Contribution of Core Copyright IndustriesIndustry 1999 VA
(Thousand Pesos)
% of GDP 2010 VA (Thousand Pesos)
% GDP % Change per Year
Press and literature
63407733 2.13 88316156 0.98 2.76
Music, theater, opera
11726015 0.39 71733219 0.80 15.09
Motion picture and video
2233413 0.08 9289765 0.10 11.88
Radio and television
13629900 0.46 240471317 2.67 23.92
Photography 122461 0.00 2025666 0.02 23.38
Software and databases
11444727 0.38 42596043 0.47 10.95
Visual and graphic arts
3837 0.00 1558685 0.02 50.06
Advertising 2882825 0.10 4349356 0.05 3.43
TOTAL CORE 105450912 3.54 460340207 5.11 12.28
Employment Contribution of Core Copyright IndustriesIndustry 1999 Employment
(Number)% of Total 2010 VA
(Number)% of Total % Change
per Year
Press and literature
177376 6.22 109654 2.76 -4.01
Music, theater, opera
23099 0.81 72489 1.83 9.53
Motion picture and video
3022 0.11 13464 0.34 12.45
Radio and television
12777 0.45 62146 1.57 13.18
Photography 1002 0.04 6740 0.17 15.88
Software and databases
27607 0.97 70969 1.79 7.87
Visual and graphic arts
85 0.00 7972 0.20 37.84
Advertising 6502 0.23 6848 0.17 0.43
TOTAL CORE 251469 8.81 350282 8.83 2.76
Value Added to GDP
Pre-press, Printing, and Post-press of Books, Magazines, Newspapers, Advertising Materials 6%
Cards, Maps, Directories, and Other Published Material 4%
Book Publishing 4%
Magazines/Periodicals 4%
Newspapers 4%
Authors, Writers, Translators 2%
Wholesale and Retail of Press and Literature (bookstores, newstands, etc.) 76%
Source: WIPO
Employment Distribution within Press and Literature
Pre-press, Printing, and Post-press of Books, Magazines, Newspapers, Advertising Materials 13%
Cards, Maps, Directories, and Other Published Material 7%
Book Publishing 7%
Magazines/Periodicals 7%
Newspapers 7%
Authors, Writers, Translators 5% Libraries
1%
Wholesale and Retail of Press and Literature (bookstores, newstands, etc.) 53%
Source: WIPO
Labor Productivity Index for Copyright Industries
Imports and Exports of Printed Materials
0
17500000
35000000
52500000
70000000
2011 2012 2013
33896982881569
50430199
61493017
53364637
Imports ExportsSource: NSO
Revealed Comparative AdvantageRCA measures how much a country is exporting relative to its total trade in comparison with the share of the product in world trade.
Source: Usui 2012 (ADB)
IPP Mandatory Industries
1997 2005 2010 1997 2005 2010 1997 2005 2010
334
292928
191919
111
RCA<1RCA>1
Book Publishing Iron and Steel Mineral Resources
Volume and Value of Production Indices
Year Value of Production Index (VaPI)
Volume of Production Index
(VoPI)
Value of Net Sales Index (VaNSI)
Volume of Net Sales Index (VoNSI)
Index Year-on Year growth rate
Index Year-on Year growth rate
Index Year-on Year growth rate
Index Year-on Year growth rate2011 136.3 -0.9 49.8 -0.9 125.7 -0.4 45.9 -0.4
2012 146.9 7.7 51.7 3.7 142.6 13.4 50 8.8
2013 151.6 3.2 47.9 -7.3 143.1 0.1 45.2 -10.8
Source: NSO
Volume and Value of Production Indices
Demand and Readership• Readership declined across
the board • Drop cannot be attributed to
digital publishing • Minimal rise of reading for
leisure (9%, 13% to 16%) • PhP 200 as the average
amount readers are willing to spend
• Readers more inclined to buy if books are on sale 70%
78%
85%
93%
100%
TotalReading Books
80%
88%
83%
92%
90%
94%
2003 2007 2012
Source: NBDB Readership Surveys 2003, 2007, 2012
DRIVERS OF GROWTH
Education• 2015 DepEd allotment for the purchase of various
learning materials estimated to reach PhP 3.4 billion • LGUs allot 1% of real estate taxes for its Special
Education Fund; industry has a stake in real estate development
• Implementation of Mother Tongue Based Multilingual Educational System
• Implementation of the K-12 Basic Education System • RA 8047 (Support from the NBDB through various
programs)
Technology• Lack of or expensive
internet access • Large number of mobile
subscribers (growth driver) • Some publishers venturing
into digital • Digital titles increased from
89 in 2012 to 817 in 2013 due mostly to Precious Pages (one of few who gave data)
• Digital sales did not significantly increase revenue
9th Pillar of Competitiveness: Technological Readiness
Grade/Data
Rank (out of 144)
Overall Technological Readiness
3.78 69
Availability of latest technologies
5.1 41
FDI and technology transfer
5.0 31
Individual using Internet, % 37% 91
Fixed broadband Internet subscriptions/100 pop.
2.6 46
Int’l Internet bandwidth, kb/s per user
57.6 46
Mobile broadband subscriptions/100 pop.
20.3 79
Source: GCI 2014
Approximate number of bookstores in the Philippines (NBS now has 200, which brings number to about 423)
Accessibility:Lack of bookstores• Uneven distribution of
major bookstores in the Philippines (high volume in Metro Manila)
• Smaller bookstores strategically placed in urban centers
• Need to look for distribution systems
Accessibility:Libraries• Public libraries are meant to
serve the public “from cradle to grave”
• Most people are unaware of the nearest public library (NBDB Readership Survey 2007)
• 57,807:1 ratio of inhabitants to libraries
• Untapped Market for Books • Most public libraries do not
purchase and rely on donations • Recommended turnover of
books is 5 years • Move to change libraries from
book to information centers
Libraries Number
Public Library System Provincial – 51* Congressional – 4* City – 100* Municipal – 535* Barangay – 427*
1396* *(from NL, but not disaggregated)
Academic Libraries 363
Specialty Libraries 26
Total 1785
Source: National Library and PAARL
SWOT ANALYSIS
STRENGTHS
Trade
• No lack of local talent • Readers and writers abound
• Can be seen through Wattpad and other platforms
• emerging business model of the self-published author Bestsellers are welcome in bookstores, enjoy support
• Enjoys government support through RA8047
• VAT exempt • Importation of raw materials Tax-
and duty-free exempt
Textbooks
• Deep knowledge of consumer and their buying habits: most have close personal relationships with customer base.
• Many incentives, such as ITH, available to acquire raw materials for print and pioneering activities such as content development
• Print books are VAT exempt • Raw materials used for the
publishing are tax- and duty-free exempt
Weaknesses
Trade
• Low print runs for literary/academic titles
• Lack of content processors to bring up level of quality
• Little to no marketing and publicity efforts by publishers
• Not distributed widely locally and rarely distributed abroad
• Lack of local libraries/bookstores to distribute books
• Lack of incentives for creators; slow content creation
Textbooks
• Most do not offer a diversified product line, and have only the public school system as a customer
• Content is generic and universal (no comparative advantage)
• Perceived corrupt practices in the buying and selling of textbooks
• Proliferation of errors, lack of classroom testing
• Lack of libraries • Lack of content processors • Reliance on government
support (can backfire when support withheld)
OpportunitiesTrade
• Can sell tremendously and cross media (become movies because of drawing power)
• A lot written in the vernacular, can encourage reading
• A huge backlist for translation available
• Rights can be sold internationally
• New income streams: FILCOLS
Textbooks
• K-12 curriculum widens the market base to align with many markets
• Direct selling to markets or co-publishing opportunities will open up
• Room for diversification of title offerings to sell to the school system
• Proposed answer for transparency to create a national registry of books will consolidate the industry’s products and create competitive pricing for books
• Translation opportunities for mother tongue-based books. Also opens regional publishing
• Available annual budget allotment General Appropriations Act, as well as funds available from SEF
• New income streams: FILCOLS
Threats
Trade
• Continuing pressure to be more profitable for each title
• Lack of school libraries does not build a library habit nor does it create a reading culture among learners
Textbooks
• DepEd moratorium on the purchase of textbooks
• Lack of school libraries does not build a library habit nor does it create a reading culture among learners
• Private schools are free to purchase from everywhere, not just local.
SUMMARY of most pressing problems of the industry
43
1. Low production of titles/products 2.Undervalued labor 3. Tremendous lack of distribution channels 4.Low spending on education 5.Negative exports, with no revealed comparative
advantage of goods exported 6.A large import/export deficit 7.Lack of openness to create industry data to
better quantify problems 8.Lack of diversified products to cater to a diverse
population and create a diverse clientele 9.Lack of diversified publishers catering to various
needs of a diverse customer base 10. Lack of unity of players
GOALS AND MEASURES
Vision for industry
The Philippines, a country of enormous creative potential and a viable market for books must grow the local market as well as become a major participant in the global book industry.
Vision
The Philippines, a country of enormous creative potential
and a viable market for books,
must become a major participant in the global book
industry.
CREATE
CONSUME
SELL
To become a vibrant industry these relationships between players and consumers must be sustained
CREATE
CONSUMESELL
MissionTo be a major player in the world’s book publishing community, industry players must develop their competitiveness, integrate itself within the regional and global publishing stage, while strengthening gains in the local market and aiming for equitable growth within its ranks.
Four overall goals from the Mission
1. Improve competitiveness 2. Integrate within regional and global markets 3. Strengthen gains in local market 4. Equitable growth within ranks
Mission 1: Improve CompetitivenessGOAL 1 Have a Mindset for Innovation • Constant
Research and Development
• Improve Access to Diverse Markets
• Find New Technologies to Diversify and Create New Content
• Remove silos
GOAL 2 Quality of Products and Processes • New, High Quality,
and Sustainable Raw Materials
• Source both Local and International Content and Talent
• Develop High Quality Workforce
• Creation of Products to be Branded as Unique to the Philippines
GOAL 3 Desire for Excellence and Productivity • Further Skills
Development • Creation of
Specialities
Mission 2: Integrate with the Regional and Global Publishing Community
GOAL 4 Integration with International Community • Create a Philippine Presence in the
International Book Scene • Export/Sell Rights Abroad to Fulfill
Demands of the International Market
Mission 3: Strengthen gains in local market
GOAL 5 Respond to Diverse Domestic Demand
Create New Products Responsive to the Diversity of
the Philippine MarketExpand Availability of Books
Creation of more libraries Encouragement of more bookstores
Creation of new modes of distribution
Exploration of Distribution Systems Within and Outside the
Country
Mission 4: Equitably Distribute Wealth within RanksGOAL 6 Sustain the viability of the Publishing Process at Every Stage of the Value Chain • Create an environment of Respect for Intellectual Property
Rights: compensation of creators • Creation of High Quality Textbooks • Build a Reading Culture • Create Legislative Infrastructure that feeds development of all
players
Vision The Philippines, a country of enormous
creative potential and a viable market for books, must become a major participant in
the global book industry.Mission
To be part of the global book publishing industry, industry players must develop its competitiveness,
integrate itself within the regional and global publishing communities and aim for an equitable
distribution of wealth among its ranks.
Improve Competitiveness
Mindset for Innovation
Constant Research and Development
Improve Access to Diverse Markets
New Technologies to Diversify and
Create New Content
Remove Silo Mentality
Quality of Products and
Processes
New, High Quality, and Sustainable Raw Materials
Source both Local and International
Content and Talent
Develop High Quality Workforce
Creation of Products to be
Branded as Unique to the Philippines
Desire for Excellence and
Productivity
Further Skills Development
Creation of Specialities
Integrate within the Regional and
Global Community
Integration with International Community
Create a Philippine Presence in the
International Book Scene
Export/Sell Rights Abroad to Fulfill Demands of the
International Market
Strengthen Gains made locally
Diverse Domestic Demand
New Products Responsive to the Diversity of the Philippine Market
Expand Availability of Books—Remove Silos within the Industry
Exploration of Distribution Systems Within and Outside the Country
Equitable Growth within its Ranks
Viability of the Publishing
Process at Every Stage of the Value Chain
Environment of Respect for
Intellectual Property Rights
Creation of High-quality Textbooks
Building a Reading Culture
Create Legislative Infrastructure that
feeds development
15-year Plan
Short Term (2015-2020) Stabilization of Local Markets Counter the stagnant growth from the past decades -Establish long-term solutions and mechanisms to address pervasive issues in the industry (ex: textbook quality)
Medium Term (2020-2025) Sustainable Growth for All Industry Players -Maintain positive growth for all -Active participation in the regional and global book markets
Long Term (2025-2030) Competitive Goals a globally competitive publishing industry with an active role in the direction of the global book community
Benchmarks
Indonesia
• Almost double the amount of new titles published per million per year
• First Southeast Asian Country in Focus at the Frankfurt Book Fair 2015
• Average growth trend of 6% per year from 2007-2012
• Similar geographic and economic parameters to the Philippines
• High investment in Education (20% of National Budget)
• Above the Philippines in rank in the Global Competitiveness in ASEAN
Thailand
• Almost double the Philippines’s per capita income at 13,510 PPP dollars in 2013
• 30th IPA Congress set in Bangkok for 2015
• 2013 World Book Capital • Initiated the National Reading
Decade Campaign for 2008-2013 • Annual growth of 5% in 2011 • Above Indonesia in rank in Global
Competitiveness in ASEAN
New Titles per Million Inhabitants
0
15000
30000
45000
60000
2010 2015 2020 2025 2030
Targets and Required Growth Rates
Target Level of New Titles
Published
Yearly Growth Rate
Required
2015 7722 5.69%
2020 10061 5.56%
2025 14427 6.20%
2030 20498 6.47%
Conservative
Target Level of New Titles
Published
Yearly Growth Rate
Required
2015 8679 8.19%
2020 13414 8.64%
2025 19236 8.25%
2030 28184 8.17%
Moderate
Target Level of New Titles
Published
Yearly Growth Rate
Required
2015 11326 14.11%
2020 23475 14.90%
2025 36067 12.89%
2030 57650 12.11%
Aggressive
Value Added
00
225,000,000.00
450,000,000.00
675,000,000.00
900,000,000.00
2010 VA 2015 VA 2020 VA 2025 VA 2030 VA
Exports
00
7,500,000.00
15,000,000.00
22,500,000.00
30,000,000.00
2012 2015 2020 2025 2030
RECOMMENDATIONS AND FINAL THOUGHTS
Establish Data Gathering Initiatives • Create an environment of trust and openness for the initiative
• Publishers must see themselves as allies rather than competition to be able to develop the industry.
• Create a central database for basic information on industry stakeholders to be updated yearly • Book associations and/or NBDB to be considered as the keeper of the
database • Strictly enforce submission of data through incentives and
penalties for lack of compliance • Create annual industry performance reports on the
publishing industry for the benefit of all players • Proactive submission of data to international publishing
associations to create an image of a dynamic and engaged industry willing to be part of the global publishing community
Pursue a Clear Legislative Agenda• Examine international models that implement the Fixed
Book Price Law to prevent problematic practices that distort the market; explore viability in the local industry
• Examine the current legislation (RA 8047) to answer the current needs of a changing industry
• Reconsider the DOJ Opinion that defines Book Publishing as Mass Media, which prevents the influx of foreign direct investment
• Reconsider Section 109 of the National Internal Revenue Code, which exempts books from VAT • Current definition of the book, “a printed non-periodical publication
of at least 48 pages” do not encompass non-print format books and books with less that 48 pages
Create Wider Distribution Channels• Develop the library system of the country
• Create policies that favor the creation of libraries in schools and local communities
• Ensure the purchase of up-to-date books instead of reliance on donations • A library in every school is good to target
• Encourage small, related business, such as independent and niche bookstores and online distribution outfits
• Consider alternative distribution channels that extend the reach of the industry to the remotest corners of the country
• Prioritize the identification of international and regional distribution channels
• Foster closer ties with other market players by regularly attending international book trade fairs
• Consider digital distribution as a viable model by encouraging digital access, especially in the regions, and affordability
• Create public and private grant systems to encourage the development of Philippine titles and their distribution abroad
Increase and Develop Sources of Content• Ensure proper compensation for content creators through fair contract
relations and to attract more and improved talent to the industry • Consider sourcing international content and selling local content abroad • Identify international award-giving bodies for Filipinos to join as a way of
boosting the image of Filipino content creators and the valuation of Philippine titles
• Produce diverse titles to meet the demands of the diversity of cultures in the country as well as internationally
• Translation as a key component given the mother-tongue based policy • Encourage more individuals throughout the country to go into
publishing • Identify key persons from the regions to participate in activities in Manila and
internationally • Create and strengthen writers and editors groups
• Aid in the creation of mechanisms that focus on creators’ welfare to encourage more talent consider careers in the industry
• Create value for created works with fair compensation through equitable contracts and copyright awareness
Develop Concern for Consumer/Reader Well-being• Importance of reading books should be supported by both
public and private sectors • Establish long-term reading campaigns that encourage
reading for enjoyment such as Singapore’s annual Read Singapore! and Thailand’s National Reading Decade
• Develop consumer-oriented leisure reading materials to encourage the idea of reading for enjoyment
• Establish creative reading campaigns that target the vast majority instead of particular segments to establish the idea of reading as an enjoyable activity for all
Mindset Change• Recognize that the Philippine publishing industry is part of
the global publishing scene • Join international associations to interact and learn about the
kind of content Filipinos can create that would appeal to other markets
• Encourage government support for participating in international publishing activities such as book fairs
• Identify as part of the ASEAN community and actively find opportunities for exchange and trade
• Change the “Filipinos for Filipinos” mindset to “Filipinos for the World and the World for Filipinos”
Consolidated Industry Goals
69
“IT IS NOT THE MOST INTELLECTUAL OF THE SPECIES THAT SURVIVES; IT IS NOT THE STRONGEST THAT SURVIVES; BUT THE SPECIES THAT SURVIVES IS THE ONE THAT IS ABLE BEST TO ADAPT AND ADJUST TO THE CHANGING
ENVIRONMENT IN WHICH IT FINDS ITSELF.’.”
-LEON MEGGINSON, paraphrasing Darwin’s Origin of the Species
(Megginson, ‘Lessons from Europe for American Business’, Southwestern Social Science Quarterly (1963) 44(1): 3-13, at p. 4.)
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