Within the project “BOOK PLATFORM”

Survey was conducted upon the request of “National Association of Publishers” NGO

PUBLISHING AND BOOK MARKET IN THE

REPUBLIC OF ARMENIA

The survey has been carried out by Aram Navasardyan, Davit Dabaghyan

Yerevan 2013

Content

Preamble

1.Main Rules and Standards Established by the Government for Subjects of Publishing Business

2. Basic indicators that characterize market publishing products

2.1. Book publishing houses

2.2. Printing Enterprises

2.3. Bookselling

3. Digital Publishing Market

4. The situation with the unauthorized copying of printed products (piracy)

4.1 Copyright and Related Rights

5. Import and export books

6.Peculiarities of educational publishing market

7. Libraries and public institutions

7.1. Libraries

7.2. NGOs

8. Conclusions and Recommendations...…………………………………………………………………………………………..95

Preamble

Throughout the 20 years of Armenia’s Independence the NPA and “Book and BookPublishingBusinessCenter” have carried out several surveys in the book market. But these journalistic surveys were ratherlike lengthy voluminous materials. German expert Ingo Erich Schmidt Braul /2003/, the experts of Goethe Institute /2009/, who were supported by the members of the Executive Council of the NPA, also carried out surveys in the book sphere.However, theArmenian modern book market has never been studied in depth. Nevertheless, eachsurvey will eventuallycontribute and help tounderstand the truesituation fully.

This study of the publishing market of Armenia is made within the framework of the project “Book Platform” financed by Eastern Partnershp Cultural Programme of the EU.The data and information used in the research were provided by the Ministry of Culture, Ministry of Education and Science, Ministry of Economy, State Revenue Committee, Ministry of Foreign Affairs, State Statistical Committee, Police, National Book Chamber of the Republic of Armenia, publishing houses, printing companies, bookstores, libraries, NGOs and other organizations operating in this field.

By the end of the epoch of the state planned system, i.e. in 1990, with the efforts of 400 high-quality experts of 8 publishing houses of the State Publishing, Polygraph and Book Trade Committee of the Republic of Armenia / State Publishing Committee/ about 1100 titles were issued per annum with a print run in excess of 12 million. Additionally, 19 scientific, departmental organizations were authorized to publish specialized books in a limited volume /5-7 press sheet[1]/ and with a limited print run of /1000-2000 copies/.

Within the system of the State Publishing Committee of the Republic of Armenia there were operating 6 printing companies, the mechanical plant, the head printing company of “Parberakan” complex and 36 printing companies of the 36 regions of the Republic of Armenia /with over 500 employees/ which were printing only regional neղwspapers and local materials.

Within the Department of “Haygirq” of the State Publishing Committee of the Republic of Armenia there were functioning 200 bookstores, the Republican Book Base, LibraryDistributionCenter, transport collection station, where all together around 2500 people were employed. At the same time, the unified book selling networks/about 300 people/ of Haykop, “Academkniga”, “Voenkniga” functioned. Overall, in the Republic of Armenia with a population of 3.2 million, the number of the copies per capita was 3.5-4.

Table 1.

Release of books according to publishing houses in 1989
Number of
books / Print run
(thousand copies)
Total / 831 / 12307
Publishing houses directly under the supervision of the State Publishing, Polygraph and Book Trade Committee of the Republic of Armenia / 640 / 11664
Including
1. “Hayastan” / 194 / 1723
2. “Soviet writer” / 127 / 2049
3. “Arevik” / 103 / 2705
4. “Luys” / 215 / 5107
5. Armenian Soviet
Encyclopedia / 1 / 80
6. “Anahit”[2] / - / -
PUBLISHING HOUSES under the supervision of the State Publishing, Polygraph and Book Trade Committee of the Republic of Armenia and National Academy of Sciences and YSU / 190 / 633
Including
7. Publishing house of the
NationalAcademy of Sciences / 80 / 401
8. Publishing house of
YerevanStateUniversity / 110 / 232

Still in the last year of the ruling of the Soviet Union the registration process of the so-called new small publishing houses started with the permission of the State Publishing, Polygraph and Book Trade Committee of the Republic of Armenia /State Publishing Committee/. Within a short timescale 100 small publishing houses were registered, the founders of which were not specialists in the field of publishing

Although after the collapse of the USSR in 1991 the publishing system of the Republic of Armenia broke free from the chains of the state planned system, it was left without state support and organized supply of printing equipment, paper and other materials. Nonetheless, the State Publishing and Printing Systems of the Republic adhering to the 500-year old traditions of the Armenian typography, even in the severe condition of the Nagorno-Karabakh War, water and energy crisis, did not terminate their activities.

The newly elected authorities of Armenia in their turn attempted to generate favorable conditions to expand the activities of all book organizations of Armenia in the conditions of market economy by making a series of amendments to the legislation.

1.Main Rules and Standards Established by the Government for Subjects of Publishing Business

During the first months of independence, historically unprecedented and crucial Decision № 161 of 5 March 1991 of the Government of the Republic of Armenia was issued, under which, in addition to other fields, the three main subfields of publishing industry, i.e. publishing, printing and book trade were also ranked among free activities, the thematic planning of literature was abolished, censorship was banned, notorious Glavlit (Russian Censorship Office) was liquidated, freedom of speech was endorsed by the Constitution of the Republic of Armenia which paved the way for free printed speech. This historical document further played a key role in the book industry.

During the first years of Armenia’s Independence, in addition to the previously functioning publishing houses, another 100 small publishing houses, printing companies, paper importers engaged in publishing activities were registered which witnesses about people's and start-up entrepreneurs’ avid interest in that business. Those private companies set out to publish Armenians' and Diaspora Armenians’ works, which were banned in the Soviet period, translations of European classics and modern writers that had formerly been inaccessible. However, that process came to its close after 1-2 years since all the banned books were rapidly published and nothing remained unpublished. Together with the popularization of national and foreign spiritual values, the printing of non-fiction /books of oracles, astrology, hieroglyphs, erotica, phrasebooks/. Regrettably, since there was no law on compulsory copies, the copies of numerous books released in those years were not provided to the Book Chamber and National Library of the Republic of Armenia. These publications were mainly released with serious violations of publishing standards, without ISBNs. It is noteworthy that the first private publishing houses were not specialized in certain fields, they were basically universal and anything could be published on demand. No financial risk existed as it was the client who paid and managed the print run.

The measures undertaken under economic reforms initiated in the first years of independence by legislative and executive authorities and lasting around a decade provided an opportunity for the book industry to gradually surmount the hardships of the transitional period, adapt to the new economic conditions, find sources of acquiring paper, printing materials and equipment creating favorable conditions necessary for development.

The activities of private publishing houses in the long and tiresome transitional period were mainly limited to the fulfillment of the orders of the authors, entrepreneurs, foreign partners, international organizations, national and international organizations, ambassadors and other state orders which represented over 90 percent of the whole book production published in the Republic.

The number of the titles published in the Republic in 1991-1995 /years of the Nagorno-Karabakh War/ was equal to that of the titled published in the years of the Second World War and economic recovery.

Table 2. Comparative Indexes

Year / N of Titles / Year / N of Titles
1992 / 312 / 1942 / 403
1993 / 259 / 1943 / 253
1994 / 224 / 1944 / 284
1995 / 379 / 1945 / 260
1996 / 397 / 1946 / 413
1997 / 429 / 1947 / 496
1998 / 538 / 1948 / 694
1999 / 577 / 1949 / 698
It should be mentioned that in 1991-1994 Armenia was involved in war actions (Confrontation between Nagorno- Karabakh and Azerbaijan). During that years Armenia suffered many losses, including the damaging institutional structures. This circumstance explains why the print run of the publishing houses have sharply decreased since 1991 to 1995

Publishing industry started to move forward after the military operations had been terminated in Artsakh in 1995.

Starting from 2001 the number of the titles almost reached that of 1990 and two years later it exceeded 1500.

Table 3. Comparative Indexes

Year / N of Titles / Year / N of Titles
2002 / 1017 / 1990 / 821
2003 / 1581 / 1991 / 536
2004 / 1595 / 1992 / 311

However, the problem of print run was not tackled for reason of small demand and small purchasing power of the population: the book industry of Armenia still remains static with a print run of 500 copies, since the process of increasing interest in books and boosting reading is moving ahead with great difficulties. A value added tax of 20 percent has been charged for the consumption of fiction and translation books as well as for books of many other types up till now, i.e. as much as in case of food and economic products.

A series of legislative acts followed historical Decision № 161 of 5 March 1991 of the Government of the Republic of Armenia, by which the Book Industry is partially regulated. Particular articles of the Civil Code of the Republic of Armenia, Criminal Code of the Republic of Armenia, Customs Code of the Republic of Armenia, Laws of the Republic of Armenia on “Copyright and Related Rights”, “Entrepreneurial Activities”, “Library Studies”, “Value Added Tax”, “Profit Tax”, “Income Tax” and some other laws are to varying extents related to book publishing, book printing, publishing right, book consumption, export and book market.

The first Law of the Republic of Armenia on Copyright and Related Rights was adopted in May 1996.

The Law of the Republic of Armenia on Value Added Tax was adopted in June 1997, by Article 15 whereof “…the sell of copybooks, music books, fine arts albums, textbooks and school educational publications, children's literature and scientific, methodological and educational publications of the National Academy of Sciences of the Republic of Armenia are VAT exempt”.

The Civil Code of the Republic of Armenia was adopted in July 1998. Articles 1100-1143 whereof referred to the issues of intellectual property and copyright and related rights protection.

The Criminal Code of the Republic of Armenia of adopted in September 1998, Article 158 whereof established the punishments for copyright violation.

The first Executive Decree of the President of the Republic of Armenia on the Procedure for Establishing and Awarding State Literary Prizes was issued in December 1998.

The Decision of the Government of the Republic of Armenia on the Minimum Rates of Copyright Remuneration for the Use of Certain Types of Literature and Art Works was adopted in April, 1999.

The new Law of the Republic of Armenia on Copyright and Related Rights was adopted in January 2000.

The new Executive Decree of the President of the Republic of Armenia on the Procedure for Establishing and Awarding State Literary Prizes was issued in April 2000.

The Customs Code of the Republic of Armenia was adopted in August, 2000 which exempted the imported paper, books, newspapers, other polygraph production from customs duty as well as established the procedure for customs authorities’ contribution to the protection of people’s intellectual property.

The Law of the Republic of Armenia on the Compulsory Copy of Documents was adopted in April 2005.

The revised Law of the Republic of Armenia on Copyright and Related Rights was adopted in June 2006.

The Decision of the Government of the Republic of Armenia “On the Establishment of the Criteria for Provision of State-Owned Real Estate to Legal Entities and Individual Entrepreneurs of the Republic of Armenia Engaged in Publishing Activities for Gratuitous Use” was adopted in September 2013.

In October 2000 the President of the Republic of Armenia ratified the Berne Conventionfor theProtectionofLiteraryand ArtisticWorks, then a series of EU Directives on the Electronic Use of Copyrighted materials were signed.

The Republic of Armenia joined the Berne, Rome, Geneva Phonograms Conventions, Brussels Conventions, TRIPS Agreement as well as the WIPO Internet Treaties (WIPO, WCT, WPPT) and the EU Directives. Armenia is a member of the United Nations Organization, the World Intellectual Property Organization and the World Trade Organization.

However, the publishing industry has been managed by the aforementioned Laws since 1991 up till now, various Articles whereof, nevertheless, do not replace the Main Law defining a special attitude and privileges towards the book, taking account of the significance of the book, protecting the book from legislative violations, contributing to and providing special conditions for the field development. .

According to the National Publishers Association (NPA), many attempts were made to include the draft law of the Republic of Armenia on Book Publishing in the agenda of the National Assembly of the Republic of Armenia and the draft law submitted to the National Assembly of the Republic of Armenia within the framework of the project “Civilized Society through Book and Reading Promoting Laws” implemented in the scope of the programme “World Education” which was approved by 7 members of parliament, has long been neglected.

Under the proposed draft law on Book Publishing (08.2002-07.2003)

  • general principles of publishing activities were to be established;
  • functioning of that sector was to be regulated ;
  • distribution of printed production was to be established
  • functions and interaction conditions of the entities operating in the publishing field were to be established;
  • state policy principles of publishing activities were to be determined;
  • basic principles of publishing activities, rights and duties of the entities - publishing houses, producers and distributors – were to be regulated.

The value added tax in the printing industry is 20 percent, the same applies to the book trade but not to all book types.Thereare no privileges with regard to the profit tax either, neither a decision nor a law on state support for the book industry - all the efforts of the National Academy of Sciences in that respect have yielded no results. There are no privileges in case of income tax. So there are but a few privileges for Publishing business till now.

Booksellers and publishers negotiate about increasing the amount of the trade discount and it gradually rises to the detriment of the publishers.

The issue of the indirect tax of the added value is especially prioritized. Thus Article 15 of the Law of the Republic of Armenia on “Value Added Tax” of June 1997 of the National Assembly of the Republic of Armenia stipulates:

“...The sell of copybooks and music and fine arts albums, textbooks and school educational publications, children’s literature, scientific, methodological and educational publications of the NationalAcademy of Sciences of the Republic of Armenia shall be exempt from VAT”.

If we calculate all direct and indirect taxes levied for all other activities carried out in the book industry, we shall see that the book cover price in the Republic of Armenia is higher than its production price by more than 200 percent.

Thus:

Table 4. Calculation of book pricing

Income tax of publisher’s employees / 24,4 %,
Author’s fee / 10 %,
Income from the sold item /royalty/ / 7-10%,
Income tax of employees of the printing company / 24,4 %,
Income tax of the bookseller’s employees / 24,4 %,
Publisher’s profit tax / 20 %,
Profit tax of the printing company / 20 %,
Value added tax of paper and printing / 20 %,
Bookseller’s profit tax / 20 %,
Bookseller’s trade overheads / 42-60 %

The research shows that the specificities of the book industry have never been taken into consideration and that - as distinct from the products of many fields, a book is created with the joint efforts of the author-publisher-printer-bookseller-importer/distributor, as a result of which naturally, the cost price of a book starts growing up incessantly. That’s why the minimum print runs /500 copies on average/ and minimum salaries accounting to AMD 45000 /82 euro/ in the Republic of Armenia, the enormous inconsistency/disparity between the population’s affordability and book price, the minimum demand for literature, the alarming situation of interest in books and reading are absolutely similar as stated above.

In accordance with the Statement of 2 July 2012 of the State Statistical Committee of the Republic of Armenia,the volume of the publishing services in the Republic of Armenia in 2010-2011 constituted AMD 3.5 and 3.6 billion ( 6,4 - 6,5 million Euro). As to the 34 N accepted directive of 4 October 2010 of State Statistical Committee of the Republic of Armenia all the printed and electronic books and brochures, newspapers, magazines and other periodical publications which the publishers send to bookstores, bookselling points of stationary and other products’ stores and deliver to customers from abroad, etc. are included in the volume of the publishing services. VAT is not included in the AMD cost of these publications.

If we allow for the fact that the sale of textbooks, educational, scientific and children’s literature constituting around 75 percent of rest of the sum is not taxed with VAT, then, in fact, only fiction, fiction translation and other types of literature are taxed with VAT in the Republic of Armenia, the volume whereof accounts for AMD 150 million (273.000 Euro), and the value added tax -AMD 30 million / 55000 Euro / which is a small amount for the state budget.

In addition to “Gitutyun” publishing house of the National Academy of Sciences of the Republic of Armenia, scientific publications are also published by “Nairi” /literary/, “Hayastan” /political science, economics/, Sargis Khachents /philosophy/, Komitas, Amrots /music/, Anahit /art/, Hayagitak /Armenian studies/, Ankyunakar /lexicographic/, Antares, Zangak, Editprint /exact and social sciences/ publishing houses. But astrange andunexplainedphenomenon exists in the tax policy of this industry: Article 15 of the law of the Republic of Armenia on “Value added tax” proves that:

“…the consumption of the scientific, methodological and education publications published by the NationalAcademy of Sciences of the Republic of Armenia is exempt from VAT”.