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The Book in Transformation <br />Dominique Raccah<br />Sourcebooks, Inc.<br />CongressoInternacional de Livro Digital <br />July 2011<br />

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today… book publishing in the United Statesis an industry in transformation<br />

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advantages of hindsight<br />

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The Book in Transformation<br />Consumer data — BISG & PubTrack<br />Practical implications<br />What’s beyond ebooks<br />

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[consumer data]<br />

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3 Year Study (11 contracted publications)<br />5 publications to date<br />Methodology<br /><ul><li> PubTrack™ Consumer panel of U.S. book buying men, women and teens balanced to US Census

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Survey pool of ~78K book consumers at the time of last fielding

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95% probability threshold</li></ul>© 2011, the Book Industry Study Group, Inc.<br />

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2 Year Study (4 contracted publications)<br />2 publications to date<br />Methodology<br /><ul><li> PubTrack™ Consumer panel of U.S. college students

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All institution types – all grade levels balanced to statistics from American Council on Education

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1,500 students per fielding

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95% probability threshold</li></ul>© 2011, the Book Industry Study Group, Inc.<br />

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Benefits of e-reading devices…<br />

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Why consumers purchase e-books instead of print books<br />© 2010, the Book Industry Study Group, Inc.<br />

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Trade E-Book Market Growth Rate<br />

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[Trade Consumer]<br />

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Who is Today’s Core Trade E-Book Buyer?<br />Woman (66%)<br />~44 years old<br />HH Income ~$77K Yr<br />Predominantly Fiction (58% of all ‘e’ sold)<br />

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Core buyer of trade E-Books is growing and has tremendous buying power!<br />Frequency of Purchase<br />18% of buyers = 61% $$$ for ‘e’ <br />

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Dedicated e-readers Now Dominate the Trade Market…<br />

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Dedicated e-readers are the dominant choice for all book genres now.<br />15<br />© 2011, the Book Industry Study Group, Inc.<br />

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…And Kindle still dominates the trade device market…<br />

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Kindle is the dominant source for Trade E-Book downloads…<br />

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…Not So in the Higher Ed Market<br />Spring Semester 2011<br />

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[Textbook Consumer Data]<br />

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Who is Today’s Core E-Textbook Buyer?<br />Male<br />~23<br />Graduate Student or Distance Learner<br />More likely ‘pirate’ print or digital texts then under-classmen<br />Still only buys a small portion of his texts 17% as ‘e’<br />

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E-Texts do not have a clear source for download<br />

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Feature requirements from students are demanding on E-Books <br />

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When given a choice, students choose print over ‘e’ 3 out of 4 times…<br />

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…And find ‘other’ forms of digital content more useful than E-Books<br />

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While still lacking functionality, students perceive similar value points to trade<br />

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For now…ebooks having significantly larger impact on trade books than textbooks<br />

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Wish list of trade E-Book buyers offer clues for the future <br />

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The rise in e-book units is not offsetting the cannibalism of print. <br />28<br />© 2011, the Book Industry Study Group, Inc.<br />

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E-book buyers still look to ‘free’ as a major component to digital transition.<br />© 2011, the Book Industry Study Group, Inc.<br />

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Downloading of FREE e-books is central to the digital content experience. <br />30<br />30<br />© 2011, the Book Industry Study Group, Inc.<br />

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[practical implications]<br />

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Sourcebooks results at a glance<br />10 years of consecutive sales growth. Of those, 5 years of double digit growth<br />YTD 2011 BookscanPOS (through the register sales) up 8%(industry down 8%) <br />YTD p-book market share is up 23.5%<br />Net sales up over 20% at the end of 1st half 2011<br />

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aninteresting aspect…<br />When add ebooks into both 2010 and 2011, “total POS” has grown by 60% so far in 2011<br />

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[ebooks]<br />

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Licensing &<br />Administration<br />Trademark/<br />Copyright protection<br />Accounting;<br />Royalties<br />Positioning<br />Cultural Filter<br />Content<br />Development<br />Copyedit and<br />Proofread<br />Physical & Digital<br />Warehousing<br />what <br />book publishers do<br />Content Design<br />Physical Distribution<br />Creation of content<br />portable files<br />Digital Distribution<br />Printing/<br />Manufacturing<br />Author branding & <br />career development<br />Trade Shows<br />Niche community<br />building<br />PR, Marketing<br />and Advertising<br />Creative Partner<br />Retail Marketing<br />and Sales<br />eCommerce<br />Administration<br />

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law of diffusion of innovation<br />-Simon Sinek, Ted Talk<br />

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Ebooks. How far? How fast?<br />

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for Sourcebooks,<br />January 2011 eBook dollars<br />= 35% of $ sold <br />

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2 major trends driving this growth<br />

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1. anytime, anywhere…buying <br />

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Trade E-Book Consumers are buying more titles…<br />

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…Majority of trade consumers now report spending more money overall<br />

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2. anytime, anywhere…reading <br />

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80% of ebook readers reported reading somewhat or a lot more<br />

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What categories of books are most impacted by ebooks today?<br />

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What’s Transforming (2010)?<br />

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What’s Transforming (2010)?<br />

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It’s about stories…<br />

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Slower ebook transformation for categories such as reference and children’s books<br />

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Continuing downward <br />pressure on pricing of ebooks<br />

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How much infrastructure is enough? <br />

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[what’s involved in making ebooks]<br />

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ebooks require <br />additional workflow<br />

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with printed books, we ship exactly the same product to different retailers<br />

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ebook distributors timeline<br />Amazon<br />Apple<br />Barnes & Noble<br />Blio<br />Copia<br />Google<br />Kobo<br />Overdrive<br />Sony<br />+ 2-3 more<br />Amazon<br />Apple<br />Barnes & Noble<br />Overdrive<br />Sony<br />Amazon (85%)<br />Overdrive<br />Sony<br />2008<br />2010<br />2012<br />

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ebook retailers use different file formats<br />

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Two kinds of changes:1. Changes to workflow process2. Additional workflow<br />

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ebooks were a by-product of the file out<br />

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creating a new workflow;<br />from bookmaking to content delivery<br />

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What conversion costs (will vary by kind of publisher/list):<br />Simple Titles: $54.93 <br />Moderate Titles: $96.70 <br />Complex Titles: $180.95Average price<br />per title: $111.00** <br />

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What do ebook sales look like(average unit sales per month):<br />Top 10 Titles: 479.6 Units <br /> Top 50 Titles: 235.3 Units <br /> Average for all ISBNs: 13.3<br />(October 2010)<br />

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What’s next for ebooks:<br /><ul><li> content management systems

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epub 3

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bundling

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still no good reporting mechanisms

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there are new devices every day</li></li></ul><li>[what’s beyond ebooks]<br />

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3 different kinds of digital opportunity<br />e-books<br />apps<br />web-based<br />1.<br />2.<br />3.<br />enhanced e-books<br />communities<br />book <br />publisher<br />content sites<br />developer<br />interactive programs<br />

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developing a digital roadmap<br />

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some of what we’re seeing…<br />

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1. Vertical focus means we compete harder in fewer categories<br />

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developing reader (user)-centric models ~<br />based on key verticals<br />

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?<br />ebook<br />$0.99 - $4.99<br />$$$<br />$19.95<br />$12.99<br />$5.99<br />$4.99<br />Complete Book of Baby Names<br />25,001 Best Baby Names ebook<br />25,001 Best Baby Names MM<br />Baby Name Treasury<br />iPhone<br />apps<br />

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2. greater need for partnership between authors, agents and publishers<br />

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ebook<br />$0.99 - $4.99<br />$$$<br />$19.99<br />$14.99<br />$12.99<br />$17.99<br />Gruber workbooks<br />Gruber SAT ebook<br />Gruber Word-Master<br />Gruber’s Complete<br />SAT<br />MyMaxScore<br />Gruber Test Prep software<br />iPhone<br />apps<br />

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2. Metadata matters<br />

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3. Digital has cultural implications within your organization <br />

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impacts every department<br />

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4. Conceptualizing beyond the physical book<br />

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The Book Wheel<br />Print<br />Apps/interactive<br />/software<br />Audiobook<br />RTF<br />Web PDF<br />Book/Content<br />Kindle/Mobi<br />ePub<br />Enhanced/<br />additional media<br />Other/licensing<br />

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3 different kinds of digital opportunity<br />e-books<br />apps<br />web-based<br />1.<br />2.<br />3.<br />enhanced e-books<br />communities<br />book <br />publisher<br />content sites<br />developer<br />interactive programs<br />

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Author <br />Publisher <br />Developer<br />

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software<br />developer<br />book <br />publisher<br />Software/App customerSoftware retailersPublicity, marketing and advertising that drives software purchasesContent editing for flexible format productUser-Interface and designTechnical programmingDatabase design and programmingPlatform and device portabilityOngoing content updatingOngoing software updatingOngoing consumer support<br />Book or ebook customerBook or ebook retailersPublicity, marketing and advertising that drives book purchasesContent editing for fixed format productDesign and layoutPrinting and warehouse/storage capabilities<br />Content<br />

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Let Every Nation Know<br />Apple iBookstore <br />November 2010<br />

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iDrakula<br />App • Free, $1.99 <br />Book<br />

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Where is the line between a book and an app?<br />

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enhanced<br />ebook<br />iPhone app<br />software<br />interactivity<br />

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5. focus on the user/reader & that person’s experience<br />

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“You’ve got to start with the customer experience and work back toward the technology — not the other way around.”<br />Steve Jobs <br />May 1997<br />

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user interface=<br />experience design<br />

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“We don’t pay for content. <br />We pay for the experience.”<br />Nick Bilton<br />I live in the future and here’s how it works <br />

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Digital opens opportunities <br />beyond ebooks<br />Focus on key verticals<br />Metadata matters<br />Digital has cultural implications<br />Publishers can conceptualize books in new ways<br />Focus on user experience<br />

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enhanced e-books<br />e-books<br />web-based content<br />the world for book publishers <br />just got a lot BIGGER<br />apps<br />user-generated content<br />communities<br />

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It’s not just the book that’s transforming. <br />It’s the book publisher.<br />Digital changes everything.<br />

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“We should try to be the parents of our future rather than the offspring of our past”<br />-Miguel de Unamuno (1864-1936)<br /> Spanish essayist, novelist, poet,<br /> playwright, and philosopher <br />

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Thank YOU! <br />Email: dominique.raccah@sourcebooks.com Twitter: @draccah<br />LinkedIn Group: Ebooks, Digital Books and Content Publishing Network<br />