Channels for EPUB Sales and Distribution

May 12, 2009

Erica Lazzaro, General Counsel [email protected]

V.12012008 |© OverDrive, Inc. 2008 | Page 1 © OverDrive, Inc. 2009 | Page 1 Agenda

Immediate Sales Opportunities for EPUB 1. Online Retailers/booksellers 2. Libraries/schools/institutions 3. Publishers selling direct

© OverDrive, Inc. 2009 | Page 2 About OverDrive

Privately-held, profitable corporation • Founded in 1986 • Headquartered in Cleveland, Ohio USA Global sales channels and industry partners • North America, Europe, Pan-Asia • Publishers, retailers, corporations, agencies, public libraries, schools, colleges One of the largest digital media catalogs, with multiple formats • - Adobe PDF, EPUB, Reader (.LIT), (.PRC) - Windows, Mac, Mobile Devices, • Audiobooks - Windows Media (WMA) with DRM, MP3 format (without DRM) • Video - Windows Media Video (WMV), MPEG4 (without DRM-coming soon) OverDrive Media Console (Windows/Mac/Mobile) • Adding 400K+ new users per month (10 million desktops 12/09)

© OverDrive, Inc. 2009 | Page 3 Publisher Services

OverDrive works with the world’s leading publishers, providing titles in multiple formats in all subjects •Popular •Classic •Fiction & Non-fiction •Travel •Romance •Academic … currently 200,000+ digital titles in our digital media warehouse

© OverDrive, Inc. 2009 | Page 4 Online Retailers/booksellers

• BooksOnBoard.com • First online retailer live with EPUB • Waterstones.co.uk • Largest Retail Bookseller in UK (330 high street stores) • 1st EPUB only retailer (100% EPUB catalog) • Helped launch Sony Reader in the U.K. and in Europe • Over 10,000 titles available for sale • All major UK and US trade publishers participating • Also carrying “enhanced” titles

© OverDrive, Inc. 2009 | Page 5 Enhanced EPUB Content

Examples of Random House “enhanced” EPUB eBooks: • eBooks may include video, audio, a quiz or just extra text • The extra content is designed to be used with

© OverDrive, Inc. 2009 | Page 6 eCommerce, Retail & Point of Sale Services

Hosted websites for booksellers and Publishers • Fully customized and integrated • Promotions & Merchandising • Direct feed from vast inventory & seamless download fulfillment In-store Integration (Brick & Click) • Download in-store kiosk • eBook cards (POS)

© OverDrive, Inc. 2009 | Page 7 EPUB in the Libraries

• Cleveland Public Library: 1st library to add collection of EPUB titles • Seeing good adoption across library partners • OverDrive is refreshing libraries’ websites with updated catalogs, FAQs, etc.

© OverDrive, Inc. 2009 | Page 8 Publishers selling direct: HarperCollins

• HarperCollins merchandising EPUB titles along side e-audio and other eBook formats

• No increase in support calls with addition of new format

• Did see a bump in sales, more consumers opting for EPUB

© OverDrive, Inc. 2009 | Page 9 Driving Consumer Awareness & Adoption of eBooks

Consumer Awareness • Adding icons for device support Now compatible ® • Adding new features/mobility Sony Reader • Digital Bookmobile- National Tour • www.digitalbookmobile.com

• 100 cities – 17,000 new users

© OverDrive, Inc. 2009 | Page 10 Summary

• Significant sales channels for EPUB exist, sell to: • Libraries and schools • Leading booksellers and independent retailers

• Your own channels (publisher direct to consumer) • Focuses for 2009/2010:

• Mobile • Social • New business models

© OverDrive, Inc. 2009 | Page 11