Kelly Gallagher -- eBooks Go Global

eBooks Go Global:A look at eBook growth around the world June 2012

Perspective 1: Maturing MarketsUS and UK eBook overview

November 19, 2007

March 12, 2010

Dedicated eReaders are the device of choice in the US Preferred eBook reading device Dedicated e-reader PC (desktop, laptop, netbook) iPad/Android Tablet Smartphone 80 70 60 50 40 30 20 10 0 Sep-10 Jan-11 May-11 Aug 2011 Dec-11 Feb-12Source: Source: BISG Consumer Attitudes Study

And have now surpassed PCs as device used most often in UK Preferred eBook reading device Dedicated e-reader PC (desktop, laptop, netbook) iPad/other tablet Smartphone 60 50 40 30 20 10 0 Aug 2010 Feb 2011 Nov 2011 Mar 2012Source: Bowker Understanding the Digital Consumer

From April ‘10 to March ‘11 eBook buyers grew 11% in the USUK saw minimal growth % of book buyers who purchased an eBook16% 15%14%12%10% 8% 6% 4% 3% 4% 2% 1% 0% © 2012, the Book Industry Study Group, Inc, R.R. Bowker US Market UK MarketSource: Bowker Books & Consumers

From April ‘11 to April ’12 growth in US was 10%UK grew 7% in December ‘11 % of book buyers who purchased an eBook30% 24%25%20%15% 14% 12%10% 5% 4% 5% 0% © 2012, the Book Industry Study Group, Inc, R.R. Bowker US Market UK MarketSource: Bowker Books & Consumers

Genre share of eBook market in US (vol) 30% Total Market 25% Mystery 20% Romance 15% Biography Cooking 10% Young Adult 5% Childrens Picture Book 0% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011Source: Bowker Books & Consumers

Genre share of eBook market in UK (vol) 25 Romance 20 Crime/mystery YA 15 Biography % 10 Total Cooking 5 Childrens picture books © 2012, the Book Industry Study Group, Inc, R.R. Bowker 0 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011Source: Bowker Books & Consumers

eBook volume share by age of buyer (USA) 25% 20% 18-29 Years 30-44 Years 15% 45-54 Years 10% Total 55+ 5% 13-17 Years 0% © 2012, the Book Industry Study Group, Inc, R.R. Bowker Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011Source: Bowker Books & Consumers

eBook volume share by age of buyer (UK) 8 7 18-29 6 55-79 5 Total % 4 30-44 3 45-54 2 13-17 1 © 2012, the Book Industry Study Group, Inc, R.R. Bowker 0 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011Source: Bowker Books & Consumers

Understanding the value of Power Buyers Print ‘e’ 22% of 35% of buyers buyers 53% of books 60% of eBooks purchased purchased 50% of $$$ 48% of $$$ spent spentSource: Bowker Books & Consumers, Q4 2011Definition of heavy buyers = purchase 4 or more of that format

Understanding the value of Power Buyers Print ‘e’ 19% of 13% of buyers buyers 51% of books 46% of eBooks purchased purchased 47% of £££ 38% of £££ spent spentSource: Bowker Books & Consumers

Perspective 2: The Rest of the worldis not far behind… and catching up fast

GeM Details & Methodology• 10 country study: Australia, Brazil, France, Germany, India, Japan, South Korea, Spain UK and USA• Conducted online• Country sample* of >1000 persons 18+, designed and weighted to be representative of the adult population in terms of age, sex and region• So effectively only represents the populations with Internet access in each country• Fielded in early 2012 * India this was confined to the main cities

EBOOK PENETRATION

World-Wide eBook penetration Est. % of total popCountry  Total pop % with internet purchased eBook use m % %Australia 22 89.8 19Brazil 203 37.4 7France 65 69.5 3Germany 82 79.9 10India 1189 10.2 2Japan 127 80.0 6South Korea 49 82.7 12Spain 47 62.2 8UK 62 82.0 17USA 313 78.3 16

World-Wide eBook penetration % of respondents purchasing eBook in past 6 months 24 21 21 20 18 14 13 13 8 5 Australia Brazil France Germany India Japan S. Korea Spain UK USA Base: All online adults

Projected number of ebook buyers, Feb 2012 # who have bought an e-book in past 6 months (millions)605040302010 0 US India Brazil UK Germany Japan South Australia Spain France Korea

Free as a driver in emerging markets % of respondents downloading FREE eBook in past 6 months 53 47 42 32 33 30 25 23 11 11Australia Brazil France Germany India Japan S. Korea Spain UK USA Base: All online adults

FUTURE GROWTH POTENTIAL

Future digital behavior – buying of ebooks Very likely (4) Fairly likely (3) 29 31 23 17 16 14 21 14 29 12 23 9 18 17 16 15 10 9 6 4 Australia Brazil France Germany India Japan S. Korea Spain UK USA Base: All online adults

Future digital behavior – downloading free ebooks Very likely (4) Fairly likely (3) 25 28 33 28 22 19 54 17 19 52 17 34 24 15 25 22 20 17 11 6 Australia Brazil France Germany India Japan S. Korea Spain UK USA Base: All online adults

Future Digital Behaviors – No interest Country No interest past or future - % Japan 72% France 66% USA 59% Germany 56% UK 52% Australia 45% Spain 38% South Korea 26% Brazil 16% India 11%

Penetration Findings• Much of the world is on par now with US in access to and experience with eBooks• ‘Free’ in emerging markets still major source of access to eBooks• High-tech does not always equate to high eBook penetration – e.g. France and Japan• While only ~2% of Indian population has purchased an eBook – that number is > UK with 17% penetration

Perspective 3: India & Brazil –Market forces that will make them ‘e’ power houses very soon

Is ‘e’ is the perfect storm forpublishing in emerging countries?• Growth of ‘middle class economy’- focused on education• English as the universal language – at least of business• Advancements in online payment process’• No supply chain necessary• Affordable technology

Indian eBook buyer profile • Male – 58% • 25 – 34 years of age – 34% • Lives in city • College Grad • Works full time

8 in 10 buyers have paid for professional/businessor academic ebooks (with over 7 in 10 downloadingfor free) Book types downloaded (paid for or free) Paid Free 80 80 80 75 72 69 64 60 60 60 52 53 40% 20 0 Adult fiction Adult NF Childrens Prof/Bus Academic/text Base: Paid to download/downloaded for free

Reading on pcs/laptops predominates... Device used most for reading ebooks 0 20 40 % 60 80 Desktop PC or laptop 76 Tablet (other than iPad, Kindle Fire) 3 Smartphone either than iPhone 8 iPad 5Other devices on which ebooks can be read 3 iPhone 2 Ereader 2 Kindle Fire (not Kindle ereader) 1 Base All downloaders

With direct from publisher most used source Main source of ebook purchase 0 10 % 20 30 Publishers’ websites 24 Independent bookshops websites 21 Direct seller and etailer websites 18 Amazon/Kindle store 16 Apple iBookstore/iTunes 11From websites of chain booksellers 10 Other 1 Base All buyers

Likely ebook buyers by genre, India Age/sex of those very likely to buy a Age/sex of those very likely to buy an professional/business ebook in the next six academic/text ebook in the next 6 months months60 6040 4020 20 0 0Base: all current and likely ebook buyers (681)

Brazilian eBook buyer profile • Female – 52% • 25 – 34 years of age – 36% • Lives in city • College Grad • Works full time

Professional and academic bought by nearlythree-quarters of ebook buyers Book types downloaded (paid for or free) Paid Free 80 74 74 74 71 62 61 60 57 53 47% 40 37 20 0 Adult fiction Adult NF Childrens Prof/Bus Academic/text Base: Paid to download/downloaded for free

Again, pcs/laptops important... Device used most for reading ebooks 0 20 40 % 60 80 Desktop PC or laptop 72 Tablet (other than iPad, Kindle Fire) 9 Smartphone either than iPhone 6 iPad 4Other devices on which ebooks can be read 3 iPhone 2 Ereader 2 Kindle Fire (not Kindle ereader) 1 Base All downloaders

But no one dominant source Main source of ebook purchase 0 10 % 20 30 Publishers’ websites 21 Independent bookshops websites 21From websites of chain booksellers 20 Direct seller and etailer websites 16 Amazon/Kindle store 9 Apple iBookstore/iTunes 9 Other 2 Base All buyers

Likely ebook buyers by genre, Brazil Age/sex of those very likely to buy a Age/sex of those very likely to buy an professional/business ebook in the next academic/text ebook in the next 6 months six months 80 80 60 60 40 40 20 20 0 0Base: all current and likely ebook buyers (608)

Closing thoughts…• Other countries are fast catching the US up in their per capita use and desire to read eBooks – but will they follow the same pattern? Or will new models emerge?• Amazon plays a central role in US and UK eBook distribution, but other world regions tend to be more fractured…for now• Education and business genres are important in emerging world countries versus leisure genres in traditional Anglo markets• As devices become more affordable and content more pervasive to emerging economies the potential for these countries to ‘leap frog’ the US in ‘e’ penetration could happen within the next couple years.

GeM reports available : All Country Comparison free report available now from Bowker Market Research +44 (0) 207 831 1782 / jo@bookmarketing.co.uk Individual country reports also available from Bowker Market Research at £499 / $795 each; contact jo@bookmarketing.co.uk

Australian eBook buyer profile • Male & female – 51%/49% • 18-34 years of age – 46% • Live in suburbs • Not college grad – 59% without a degree • Works full time

Adult fiction by far the most commonlybought genre...by 69% of all ebook buyers Book types downloaded (paid for or free) 80 Paid Free 69 60 55 50 50 39 39 40% 40 % 35 31 26 20 0 Adult fiction Adult NF Childrens Prof/Bus Academic/text Base: paid to download/downloaded for free

Although pcs/laptops still important, iPad alsoimportant... Device used most for reading ebooks 0 20 % 40 Desktop PC or laptop 40 iPad 18 iPhone 12 Smartphone either than iPhone 9 Kindle 8 Tablet (other than iPad, Kindle Fire) 4 Other ereader 3Other devices on which ebooks can be read 2 Base All downloaders

Although Amazon dominate, Apple importantsupplier too Main source of ebook purchase % 0 20 40 Amazon/Kindle store 35 Apple iBookstore/iTunes 23 Direct seller and etailer websites 13 Publishers’ websites 10 Independent bookshops websites 8From websites of chain booksellers 8 Other 4 Base All buyers

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Kelly Gallagher -- eBooks Go Global

by Publishers Launch Conferences on Jun 08, 2012

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