1. Digital Books & the New Subscription Economy Ted Hill, THA Consulting May 2014 - NYC 1

2. Introduction 3. Introduction Will we see a subscription economy for digital books? 4. Introduction Focus on: Consumer fiction & non-fiction Scholarly monographs Professional & technical reference Higher Ed textbooks 5. Introduction Extensive research Broad review of current models for digital media 50+ interviews with industry stakeholders Survey of BISG and PCG members Ongoing coverage in the press 6. Introduction Our findings 7. Introduction Theyre here 8. Introduction Or, theyre near 9. Introduction Get used to it! 10. Survey Highlights 11. Survey Highlights 80% see subscriptions as inevitable 12. Survey Highlights 84% see a positive impact in next 5 years 13. Survey Highlights 86% of scholarly presses work with aggregators 14. Survey Highlights 65% of professional publishers sell direct 15. Survey Highlights 33% of textbook publishers see very significant revenue today 16. Survey Highlights (Only 7% of trade publishers do) 17. Dominant Models 18. Dominant Subscription Models Purchase for Perpetual Use 19. Dominant Subscription Models Rentals, Pay-per-Use & Short Term Loan 20. Dominant Subscription Models Paywall Access 21. Dominant Subscription Models Freemium & Open Access 22. Dominant Subscription Models The market drives the model 23. Dominant Subscription Models Selection Purchase Use Market drivers: 24. Dominant Subscription Models Selection Who chooses? How important is the breadth and depth of the collection? Purchase Is the money spent by the reader or someone else? Is there competition from lower-priced alternatives? Use: Does the reader need whole works, or just parts? Is it important to own the digital works or have long term access? 25. Dominant Subscription Models Access vs Ownership Price Sensitivity Breadth vs Depth Additional factors: 26. Dominant Subscription Models 27. Dominant Subscription Models The market drives the model 28. Four Markets 29. Consumer Publishers Amazon Prime/KOLL, Audible have been with us for a long time Some publishers already in the game All publishers know they must reach digital readers who subscribe to other forms of digital media 29 30. Consumer Publishers Impact of Netflix model 31. Scholarly Presses Slower adoption of ebooks Bigger players already selling direct access to collections Established and newer aggregators are offering more choices to librarians 32. Scholarly Presses Library budget process 33. Professional Publishers Early migration of database reference titles Many have tradition of DTC marketing How to meet the changing needs of information workers? 34. Professional Publishers Integration into workflow 35. Higher Ed Textbooks Student preferences for print over digital are at a tipping point Rentals (digital & print) are a major part of the business today For many product lines, publishers see Integrated Learning Systems as the future of their business 36. Higher Ed Publishers Migration to learning platforms 37. Open Issues 38. Open Issues Customer & publisher acceptance 39. Open Issues Degradation of high value markets 40. Open Issues Will emerging channels increase revenues? 41. Open Issues Direct-to-consumer vs 3rd party aggregators 42. For more information On Sale June 2014 Buy your copy today at: BISG.org 43. Thanks! ted@THAconsulting.com