1. Now welcoming Carl KuloUS Director,Bowker Market Research The State of Higher Ed Publishing: By the Numbers 2013, the Book Industry Study Group, Inc.0

2. Overview of College Textbook Market Academic Year 2012 3. InsertImageHere Carl KuloBISG Making Information Pay Higher Ed Event February 7, 20132 4. PubTrack Higher Ed: What is it? The Go-To source for data about U.S. CollegeCourse material sell through and adoption.Used by over 100 clients3 5. Where does the data comefrom?Course material P-O-SAdoptionDemandTracks new andCourse BookPre-order used Point-of- Data collected in Use and wholesaler Samplefrom over 3630Instructor dataSale Data onrepresents ~60% bookstores, &data from overCourse Materials (FTE) of the USonline e-tailerscollected from4200 stores from 4-yr, 2-yr, Higher Ed market tied to over 2,500 collegeandand For-Profitschools registrarsschools e-tailers office4 6. PubTrack HE Data Sources: .o B&No FollettCampuso Nebraska Books Book o ~ 1,500 Independent campus stores Stores o Discipline level o B&NCollege.com o ISBN taggingOnlineoMBS DirectPublisher o eCampus.com o ReturnsBookFiles o Sell-out Stores PubTrackHigher Educationo Professor ProfilesCourse &o Course codes Wholesalers Departmento Carnegie Codes Demand Data o MBS Information o Follett DemandFor-Profit o Apollo Group-Axia College Institutions o Apollo Group-Univ. of Phoenix (all) o Laureate Education o Corinthian College, Inc. o ITT o DeVry 5 7. What it is and What it isnt. Primarily data comes through college bookstores(including in-store and online) Tracks data that can be tied to a school Data from Amazon and other e-tailers (cant be tied toschools) and are not included Data on other alternate sources (e.g., student swaps,etc) not included BISG Student Survey will give a holistic view of whatstudents are doing regarding course material 6 8. 7 9. The Big Picture . What can PubTrack Higher Ed tell us aboutwhat American college students are buyingfor their courses? 10. The College Textbook market levels offTotal Sales in Billions$9.0$8.0 $7.7 $7.4$7.4$7.3$7.0 $6.3 $6.3 $6.0$6.0$5.0$4.0$3.0$2.0$1.0 $- AY 06 AY 07 AY 08 AY 09AY 10 AY 11 AY 129 11. New Textbook Prices Rising, but Used is holding steady!$90.00 $82.17$80.00$77.25 $73.85$70.00$69.95 $64.31$61.71$60.00$60.47 $60.68 $58.89 $57.27 $56.98$50.00 $50.74 Avg. New Price$47.50 $46.34 Avg. Used Price$40.00$30.00 AY 06AY 07AY 08AY 09AY 10AY 11AY 1210 12. Two Thirds of Units Sold are New Units littlechange over time100% 90% 80% 70% 67% 66% 64%66%67%67% 68% 60% 50% 40% 30% 20% 34% 34% 36%35%33%33% 32% 10%0% AY 06 AY 07AY 08 AY 09 AY 10 AY 11 AY 12 Used Units New Units11 13. Over of Textbook Dollars Sold are New Units100% 90% 80% 70% 71% 72% 70% 70% 70% 72% 74% 60% 50% 40% 30% 20% 29% 28% 31% 30% 28% 28% 26% 10%0% AY 06 AY 07 AY 08 AY 09 AY 10 AY 11 AY 12Used $ New $ 12 14. Which Textbooks are Keepers?Top 10 Disciplines with Lowest Used Book Rates Nursing 22%Mathematics 22% Business Education/Vo-Tech 22% Engineering21%Biological Sciences 20% Computers & Information Systems 18% Foreign Languages and Literature 17% Chemistry17%Accounting17%ESL 11%0% 5% 10% 15% 20% 25%13 15. And which Texts are not?Top Disciplines with Highest Used Book Rates Anthropology 48% History47%Sociology 46% Theater45% Philosophy 44%Classics44%Parks & Recreation44% Art44% Criminal Justice 43%40% 41% 42% 43% 44% 45% 46% 47% 48% 49%14 16. The BasicsTop 10 Disciplines in Total Dollar Sales (est. in millions) .Mathematics $875 English $628Biological Sciences$514 Psychology $455 Computers & Information$303 SystemsAccounting $266Foreign Languages and $262 Literature Chemistry $260 Education $256 Engineering $228$-$500 $1,000 Millions15 17. Finance, Engineering. & C.S. are growing again!Top 10 Growing Disciplines (in $) AY 2011 to AY 2012 Finance 13.3% Engineering 13.3% Computer Science12.1% Animal Science12.0% Social Work 11.5% Quantitative Business 9.2% Legal Studies 7.8% Chemistry 6.9% Physics 6.5% Geography 6.0% 16 18. Where the jobs arent-Top 10 Declining DisciplinesAY 2010 to AY 2011English -9.16%Classics-9.07%Dance -8.61%History -7.78%Art -7.66%Philosophy-7.50%Political Science -7.35%Interdisciplinary Studies -6.23%Sociology -5.30%Education -3.76% 17 19. 101 - Psych & SpanishTop 10 Courses in Total Dollar Sales (millions)English Composition$170Intro Psychology $169Elementary Spanish$130 CIS: MS Office Suites $125 Intro General Chemistry $104 Non-Majors Biology $94Human Anatomy and Physiology$89Majors Biology $81Mathematics: Softw are$79 $- $100$200Millions18 20. Top 10 Textbooks (ISBNs) in Total Dollar Sales (millions)The Art of Public Speaking (PK w /Connect Lucas)9.6 Publication Manual of the American Psychological Association 9.0 CINS 101: Computer Concepts (PK w /MyItLab) 8.9 Microsoft Office 2010: Introductory8.6Campbell Biology 8.4 Campbell Biology (PK w /MasteringBiology)8.2 Human Anatomy and Physiology6.7 A Writers Reference6.6Exploring Psychology 6.2 Intermediate Accounting 6.2 $- $2 $4 $6 $8 $10 $12Millions19 21. But its not just about the ISBNConsider total size of these franchises. Total Sales (est.)Marieb $ 44 millionCampbell Biology $ 5 millionLucas$ 12 million20 22. InsertImageHere Formats of CourseMaterials: Focus on Digital21 23. Sales by Format100% 13%90% 17% Custom80%12%19%70% Digital Textbook (including ebook pkg/bundles/custom)60%50% Package/Bundle (primary40%67% print)58%30% Print20%10%Spring/Summer 20117% 5%Supplements 0% 2012 units 2012 $ 22 24. PricingOverall average textbook price: $65(New & Used unchanged from 2011)Overall average digital textbook price: $61(up from $56 in 2011) 23 25. Wide Array of eTop 5 Disciplines with Highest e-Textbook Rates AY 2012 Units Foreign Languages and Literature6.15% Computers & Information Systems 5.28% Marketing 2.10% Quantitative Business 1.87% Film Studies1.53% 24 26. Rental growth strong for used: Used RentalNew Rental New Rental Used RentalSales (Millions)TermUnitsSales (Millions) UnitsFall Term 2010485,636$ 22.9297,786 $11.7Spring & Summer2011997,245$ 45.91,344,498 $51.2Fall Term 20111,969,199$ 92.81,830,288 $60.7Spring & Summer20121,248,288$ 53.62,246,607 $79.5Note: Rentals as sold through PT-HE Data Suppliers: Not including Chegg25 27. Top Disciplines for Rentals:TopDiscipline1 English2 Psychology3 Mathematics4History5Biological Sciences 26 28. InsertImageHereCurrent Expectations of Higher Ed Institutions27 29. InsertImageHerePublishers interested in..Sell through What percent of students enrolled actuallybuy the required textbook? How does this differ by format (printtextbook, custom, digital text)? How does this differ by Discipline? How does this differ by Pub Date? 28 30. InsertImageHerePublishers interested in..Sell through What percent of students enrolled actually buy the requiredtextbook? Data shows one large publishers sell-through in 4 courses80%70%4%60% 4%50% 20% 5%4%used rent2%3%3%3%new rent40%9% 16% 10%used30%new20% 40% 29%32% 28%10% 0% English Economics Mathematics Psychology 29 31. InsertImageHerePublishers interested in..Sell through What if its custom? Data shows one large publishers sell-through of customproduct in same 4 courses 100% 90% 1% 80% 12% 70% 60% 1%used rent 1% 0% 50% 6% 7% 13% new rent 40% used 73% 30% new50%50% 20% 44% 10%0%English Economics Mathematics Psychology 30 32. InsertImageHerePublishers interested in..Shift to Digital Despite high costs of textbooks, why does print stilldominate? When can we expect the instructor/higher ed marketto transition? Will the nature of the textbook have to change? 31 33. Textbook Purchase Source(Source: Bowker Market Research: Book Buyer Tracker N= 842, annually)60%50%40%In Store (in person)30% Onlinedevice/app20%10%0%2009 2010 20112012 32 34. Textbook outlet sources: 40% 35% 30% 25%Amazon.comother eCommerce 20%Large chain storesCollege Bookstores 15% 10%5%0% 2009 20102011 201233 35. Textbook binding trends (BMR):80%70%60%50% Paperback40% Harcover Digital textbook30%20%10%0%2009 2010 2011201234 36. SO LETS HEAR FROM THESTUDENTS! 35 37. Thanks!Carl KuloUS Director Market ResearchBowkerCarl.Kulo@bowker.comwww.bowker.com@Bowker36