The document discusses best practices for exporting digital books, emphasizing the impact of new technologies and market intelligence across different regions, particularly the U.S., U.K., and emerging markets. It provides recommendations for maximizing digital income, navigating international rights, and adapting to evolving content forms and market profiles. Key findings suggest significant growth opportunities in international markets, driven by the rise of affordable e-reading devices and changing consumer behavior.

1. Brian f. o’learyMagellan media consulting partnersAssociation of Canadian PublishersAnnual General MeetingJune 13, 2011Best practices for exporting digital books

2. Overview of today’s talkBackgroundGoalsPrimary findingsMarket intelligenceOptions for international rightsRecommendations

3. BackgroundLCB missionImpact of new technologies(Widely) different market profilesPrepare ‘now’

4. Research goalsMarket intelligenceOptions to maintain, sell or license rightsRecommendations to maximize digital incomeProvide an annex of resources

5. Primary findings: contentU.S. leads the waySignificant expansion expected in U.K., FranceEmerging: Spain, Germany, NetherlandsRegional rights sales a challenge

6. Primary findings: technologiesContent forms are evolvingDedicated eReadersand multifunction devicesTablets may supplant other devices for reading

7. Market intelligenceWorldwideU.S.U.K.FranceNew and emerging markets

8. Worldwide trends$4.6 Billion (2009), largely U.S.Education, trade, professional marketsSpecial-interest salesBroader, pan-market issuesEvolving value chainWorkflowVAT policiesImpact of piracy

9. Qualifying potential marketsAffordable, attractive eReading devicesWide range of contentPerceived price competitivenessEasy interfaces

10. Market share by sales channel (U.S.)Source: Barclays Capital (2010)

11. Growth in digital book share (U.S.)

12. Current profile: United StatesOnline, chain dominanceDigital content availabilityMultiple platformsAgency pricingVertical storesDiscovery starts with content

13. Market share by sales channel (U.K.)Source: Barclays Capital (2010)

14. Growth in digital book share (U.K.)

15. Current profile: United KingdomIndependents still prevalentOnline sales underdevelopedConcerns about market size, rightsLess optimistic about agency pricingConsumption profile parallels the U.S. in 2008

16. Market share by sales channel (France)Source: Barclays Capital (2010)

17. Growth in digital book share (France)

18. Current profile: FranceChains and supermarketseBook market just developingThree digital platformsUniform pricingPotentially younger market

19. Growth in digital book share (emerging markets)1Barclays Capital estimates; 2PriceWaterhouseCoopers estimates

20. Current profile: Emerging marketsSpain, Germany, NetherlandsGenerally not Canadian publishing targetsPotential growth: India, AustraliaPlatform competition a signalWorth watching all of these markets

21. International rights: current modelsSell rights by territory or languageRetain rights, sell through aggregatorsRetain rights, sell directSources: Magellan analysis

22. Selling rights by territory or language“Traditional” modelRegion, countryor languageTypically takes time to negotiateWith digital, a lag can cause frustrationSome (small) markets may be missed

23. Making digital work with the traditional modelBroader negotiations, concluded more quicklyPartner with publishers that can offer both print and eBook distributionTest eBook-only in smaller markets

24. Selling digital and print rights separatelyMay affect willingness of local partners to buy or promote a print titleCan work with international aggregators (Kobo, Apple, Google)Can also work with local aggregators (complex arrangements; may be publisher-specific)

25. Retaining digital rights and selling directImproved margins; publisher controls pricingDirect selling can provide insightChallenges: discoverability and accessNeed content depth or focusCan try “verticals”, consortia

26. Emerging modelsLending (consumers, libraries)SubscriptionConsortia“Netflix”-likeDigital-onlyor digital-first

27. Preparing for new digital modelsBe sure that rights are well-tracked and up to dateKnow where your files are (ideally, in-house)Align your metadata with partner requirementsIf you want to sell content components, plan aheadThink globally

28. Recommendations: Getting startedEPUBSimple before enhancedIf enhanced, think platform

29. Recommendations: Going globalDirect sales? Devices and markets are complexPartners can helpIf geographically focused, you can chooseWorldwide rights gaining in value

30. Recommendations: Internal assessmentsSubscription and component salesCost containment and agile contentPiracy can point out demandKeep up with VATBuy and use eReaders

31. Digital penetration in selected marketsSources: Barclays Capital, PwC, Magellan analysis

32. Digital penetration in selected marketsSources: Barclays Capital, PwC, Magellan analysis

33. Additional resourcesLivres Canada Books, “Exporting digital books: A guide to best practices”Barclays Capital, “eBooks – Digital positive for once?”, 17 Sep 2010Outsell, “Worldwide eBooks market size and forecast report”, 21 Jun 2010PwC, “Turning the page: The future of eBooks”, 2010Brian.oleary@magellanmediapartners.com