2009 Survey of Book-Buying Behavior

―Nobody knows anything.‖

—William Goldman, Adventures in the Screen Trade

Survey Validation

Conducted in two waves, Nov. & Dec, 2009

Pool: 110 million internet users across 5,100 websites

5,640 respondents

Adults 18 years+

Statistically weighted to mirror 18+ U.S. population:

48.2% male (U.S. pop. = 48.4%)

51.8% female (U.S. pop. = 51.6%)

1.6 percentage-point margin of error

95% probability threshold

Part One: Avid Readers

Who are they?

*av-id → having or showing a keen interest in

or enthusiasm for something…

New Oxford American Dictionary, Second Edition

Avid readers (5+ hours/week) are 28% of U.S. 18+ population

Hours of Book Reading per WeekBase: Total Survey

Less than 1 hour

19.6%

1-2 hours

21.3%

3-4 hours

20.8%

5-9 hours

14.8%

10 hours or more

12.9%

Not sure

10.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

18-24 25-34 35-44 45-54 55-64 65+

Percent Avid Book Readers by Age Group(>= 5 Hours per Week)

Base: Total Survey

Avid readers skew older and…

…female!

Total estimated U. S. avid book readers = 62.4 million

Pct of Avid Readers (> = 5 Hours per Week) by Gender

23,000,000

37%

39,000,000

63%

Female Male

Purchase behavior shows a similar pattern

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

18-24 25-34 35-44 45-54 55-64 65+

Percent Avid Bookbuyers by Age Group

(>= 10 Books Purchased Last 12 Months)

Base: Total Survey

Avid readers buy 10+ books per year

No. of Books Purchased Last 12 Months

One - Two

13.5%

Three - Four

15.9%

Five - Nine

15.8%10 or More

27.9%

None

11.7%

Not Sure

15.1%

Implications

Older Americans (Boomers + Silents +Eisenhowers) represent 41

million or two-thirds of 62 million avid readers

Is this a generational or chronological phenomenon: will younger

Americans read (and buy) more books as they age?

Despite the ambiguity, publishers can exploit the implied

opportunities:

Convert younger audience to book buyers (incremental e-

book sales & new formats)

Sell more books to aging market, especially Boomers

Part Two: Offline vs. Online Marketing

What works?

Indies’ “mindshare” equal to chains and online!Base: All survey book-buyers

Book-buyers Preferred Shopping Location:"Please rank your favorite places to shop for books…in order of preference."

Chain Bookstore (e.g

B&N, Borders), 21.4%

Local independent

Bookstore, 21.5%On-line Retailer (e.g

Amazon), 20.0%

Big-box Retailer (e.g.

Wal Mart, Target),

10.5%

Book club and other,

10.7%

Not Sure, 15.9%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

59%

42%

35%33%

11%

7%

Brick & Mortar Marketing Awareness Factors:

Pct Denoted "Very Important"Base: All Survey book buyers

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

On-Line Marketing Awareness Factors:Pct Deemed "Very Useful"

Total Women

Men Under 35

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Primary Factors in Book-Purchase Decision: Pct. Deemed "Very Important"

Implications

Indies’ $ market share (10-12%) lower than their mind share (22%)

Traditional marketing tools (publicity, advertising, in-store promo) still most critical in bricks-and-mortar space

Search –engine marketing is most critical in online environment

Author sites/blogs, social networks and online ads moderately effective

Final purchase decision (offline and online) driven by author reputation , personal recommendations, and price

Implications (continued…)

Multiple factors impact title awareness and purchase decision

―Symphonic‖ approach to book marketing is most effective

Validates publishers’ critical role in an evolving, hybrid market

Adds pressure to today’s marketing budgets as offline and online components must work in tandem

Part Three: E-Readers and E-Books

What’s really happening?

E-reader Sales: Limiting Factors?

Probability of E-Reader Purchase in 6-12 MonthsBase: Total Survey

Already own one

2.9%Very likely

9.8%

Somewhat likely

15.2%

Not at all likely

49.0%

Not sure

23.1%

Planned E-book Purchases Next 12 MonthsBase: e-Reader Owners

One - Two

25.4%

Three - Four

12.3%Five - Nine

11.8%Ten or more

6.8%

None

8.3%

Not Sure

35.4%

Will avid e-book buyers buy fewer books

than their p-book counterparts?

Primary Time for Using e-ReaderBase: e-Reader Owners

Reading at home for

leisure

27%

Reading in bed

14%Traveling or commuting

24%

During breaks in the

workday

9%

Studying or school

reading

6%

Other

7%

Not sure

13%

Bundling: "How likely are you to buy a 'deluxe' edition of a hardcover if it included a digital

version for a modest surcharge?"Base: Survey Book Buyers

Not sure

35.1%

Very likely

18.9%

Somewhat likely

23.0%

Not at all likely

23.0%

Does bundling pose a real opportunity for publishers?

Does bundling pose a real opportunity for publishers?

Bundling: Males < 55 Years:"How likely are you to buy a 'deluxe' edition of a hardcover if it included a digital version

for a modest surcharge?"

Not sure, 33.7%

Very likely, 28.9%

Somewhat likely,

17.5%

Not at all likely, 19.9%

Maximum $ Willing to Pay for E-BooksBase: E-Reader Owners

Less than $10.00

27.5%

$10.00 - $12.99

13.6% $13.00 - $14.99

8.1%

$15.00 - $19.99

6.2%

$20.00 - $24.99

3.7%

Not sure

37.1%

$25.00 or more

3.8%

E-book Pricing: A Developing Consensus?

E-book Piracy?: "How many times in the last twelve months have you downloaded an e-book from an online file

storage service such as RapidShare, Megaupload, Hotfile, etc.?"

Base: E-Reader Owners

None (63%)

One - two (13%)

Three- four (7%)Five - nine (3%)

Ten or more (6%)

Not Sure (8%)

Over 28% of e-reader owners use un-regulated Torrent services

Over 45% of younger male e-reader owners use un-regulated Torrent services!

E-book Piracy?: Males 18-34 years "How many times in the last twelve months have you downloaded an e-book from an online file

storage service such as RapidShare, Megaupload, Hotfile, etc.?"

Base: E-Reader Owners

None

43.2%

One - two

16.7%

Three- four

9.6%

Five - nine

6.7%

Ten or more

12.9%

Not Sure

10.8%

Implications

No near-term tipping point for e-reader adoption

E-reader penetration could reach 12-15% over two years

Undecided are swing factor at 38%

Significant resistance to e-books among remaining age/gender brackets

Resistance among 45+ consumers ranges 56-60+%

Implications (continued…)

Avid e-book readers plan proportionately fewer purchases than p-book counterparts

Sign of developing hybrid market: i.e. Are avid readers disposed to purchase both e-books and p-books going forward?

At least 42% of book buyers are at least ―somewhat likely‖ to consider bundled e-books

Implications (continued…)

Split on pricing among e-reader owners

28% favor Amazon pricing at < $10.00; 28% accept prices $10.00 -$20.00; 37% undecided

Minority 7.5% willing to pay hardcover prices >= $20.00

28% of e-reader owners use un-regulated file-sharing services

Piracy is across-the-board, but 45% among males <= 35 years

Under status quo conditions, e-book piracy will intensify with growing e-reader adoption

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