Rise Of e-books & Readers - Pankaj Vermani


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Current trends in e-book /digital publishing & readers /tablets industry across the world and gestimations on trends of digital education in India

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Rise Of e-books & Readers - Pankaj Vermani

  1. 1. GP Bullhound Research on e-Book Sector 30 th Nov 2011
  2. 2. <ul><li>Two key components of innovation focus </li></ul><ul><ul><li>Reading Device </li></ul></ul><ul><ul><li>Content Availability </li></ul></ul><ul><li>E-Book industry as it is </li></ul>
  3. 3. <ul><li>Smart Phones (SP) + Tablet (T) Market </li></ul><ul><ul><li>2010: 94% SP + 6% T= 316m </li></ul></ul><ul><ul><li>2011 (estimated): 88% SP + 12% T= 530m </li></ul></ul><ul><li>17% of people who read, use smart phones for 2-books (Elastipath survey – figures not believable) </li></ul><ul><li>Growth of distribution medium (the device) </li></ul>
  4. 4. <ul><li>- E-books growing from $ 3.9 bn in 2010 to an estimated $12.7 bn in 2013 (from 5% market share to 16%) </li></ul><ul><li>- Amazon has already announced that eBook sales have outstripped sales of physical books in the US and the UK </li></ul><ul><li>In 2010, US citizens spent over $1.5 billion on eBooks, representing growth of 175% on 2009. (However, The US remains the dominant market with 67% of eBooks sold worldwide in 2010) </li></ul><ul><li>The acceptance of e-books (the content) </li></ul>
  5. 5. <ul><li>Amazon’s strategy is to enter new markets leading with a cheap device (for example the Kindle launched at €99 in France in 2011) and make profits on the content via its large eBook store </li></ul><ul><li>The Agency Model - an agreement between retailers and publishers where the publishers set a minimum price for which retailers may sell an eBook. This model is slowing growth in the industry. Primary prevalent in evolved markets for e-books (like for major publishers in U.S., U.K. ) </li></ul><ul><li>In an e-book, avg publisher royalty is 15-16% (almost similar to traditional industry) </li></ul><ul><li>Students, researchers and professionals have adopted eBooks at a faster pace – account to 36% of the total e-book reader pie </li></ul><ul><li>Growing trends on eBook Clubs and Social networks </li></ul><ul><ul><li>Algorithmic Recommendation engines </li></ul></ul><ul><ul><li>User Ratings </li></ul></ul><ul><ul><li>Discussion Boards </li></ul></ul><ul><li>Few Facts </li></ul>
  6. 6. <ul><li>eBooks are now being borrowed and lent </li></ul><ul><ul><li>Amazon’s eBooks are being lent to over 11,000 libraries in the US. </li></ul></ul><ul><li>Self-Publishing Becomes Seamless and Appealing to Authors </li></ul><ul><ul><li>Anybody can now publish their eBooks to the world via self-publishing platforms </li></ul></ul><ul><ul><li>These self-publishing websites offer the service in exchange for a conversion fee and a percentage of each eBook sold. </li></ul></ul><ul><ul><li>Self-publishing allows authors to keep more of the profits from their eBook, short-circuiting the margin for publishing and retailers. </li></ul></ul><ul><ul><li>Some high profile examples are pottermore.com where J.K. Rowling is releasing the harry potter books in eBook format without any publisher/retailer involved. </li></ul></ul><ul><li>Amazon has also become a publisher and signed authors. Canadian-based eBook seller Kobo is following Amazon's footsteps and creating a publishing arm that will deal directly with authors </li></ul><ul><li>eLearning riding the eBook wave </li></ul><ul><ul><li>South Korean govt plans to convert textbooks to multimedia and operate from cloud </li></ul></ul><ul><ul><li>B&N and Amazon rental stores are focusing on renting books to schools & univs. </li></ul></ul><ul><li>Facts (continued..) </li></ul>
  7. 7. <ul><li>eReaders Becoming Tablets and Vice Versa. Drivers are: </li></ul><ul><ul><li>Color - Price </li></ul></ul><ul><ul><li>Touch - Connectivity </li></ul></ul><ul><li>Propogation of eReaders </li></ul>
  8. 8. <ul><li>The difference between eReader and tablet will increasingly becoming blurred. A blended middle-path with battery life of a reader and features of a tablet will be the holy grail. Key will be to stay agnostic to hardware, so we can keep adopting hardware innovations. </li></ul><ul><li>Pricing of the device will increasingly go low. Just like telecom, the meat will be in the consumption not the distribution medium. Eventually OEMs will get enticed towards recurring revenue models (like what Amazon has done with Kindle). </li></ul><ul><li>Keeping the cost low on the content subscription is the key to propagation. Pricing has to be low enough to avoid piracy. Subscription based models with time durations will help assist in controlling sky-rocketing MRPs. </li></ul><ul><li>Self publishing will become more common and will help trigger content revolution. </li></ul><ul><li>As self-publishing becomes ubiquitous, the volume of content available is going to overwhelm readers. Accurate recommendations will become key to consumption . </li></ul><ul><li>Edu-social is the future for content discovery (& even consumption). eBook trends are already showing that. </li></ul><ul><li>Conclusion – Key Take-aways </li></ul>
  9. 9. <ul><li>Contact: </li></ul><ul><li>Pankaj Vermani </li></ul><ul><li>Co-founder, Chief Strategy Officer, Vriti </li></ul><ul><li>[email_address] </li></ul>Confidential