1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 Digital Publishing Strategies: 1 0 1 1 0 1 1 0 0 0 0 0 the US Trade Book Experience 1 1 1 0 March 26th, 2015 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 Chantal Restivo-Alessi Global CDO 1 1 0 1 1 0 1 1 0 1 1 0 HarperCollins Publishers, New York, NY 0 0 0 1 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 Index 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 • Introduction 0 1 1 0 0 0 0 1 • Market overview 1 1 1 1 1 1 0 0 1 0 1 1 • History of transformation 0 1 1 1 0 0 0 1 • Organization changes: 1 1 1 0 1 1 0 0 – Publishing / production 1 0 1 1 0 1 1 0 – Marketing 0 0 0 0 – Sales 1 1 1 0 1 1 0 1 1 0 1 1 • The future 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Introduction 0 1 1 0 0 0 0 0 1 1 1 0 • About Me: Global Chief Digital Officer for HarperCollins 1 1 0 1 1 0 1 1 Publishers 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 • About HarperCollins: One of the largest trade publishers in the 1 0 1 1 0 1 1 1 world, HarperCollins is a subsidiary of New Corporation. 0 0 0 1 1 1 1 0 HarperCollins has annual revenues of $1.7Billion and global 1 1 0 0 1 0 1 1 operations in English language in the US, UK, Canada, India, 0 1 1 0 0 0 0 0 Australia and New Zealand, now expanded to include global 1 1 1 0 operations with HarperCollins Christian Publishing and 1 1 0 1 1 0 1 1 Harlequin. 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 3 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Insert HC map – locations / languages 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 4 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 HarperCollins is home to many great books & authors 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 5 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 EBOOK MARKET OVERVIEW 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 6 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 In the US the ebook market growth slowed recently 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 US Reported E-book Sales By Quarter 0 1 1 0 450 0 0 0 1 400 1 1 1 1 1 1 0 0 350 1 0 1 1 300 0 1 1 1 250 0 0 0 1 1 1 1 0 200 1 1 0 0 150 1 0 1 1 100 0 1 1 0 50 0 0 0 0 1 1 1 0 0 (millions) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 1 0 1 F11 F11 F11 F11 F12 F12 F12 F12 F13 F13 F13 F13 F14 F14 F14 F14 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 Ebooks as a % of Trade Adult Titles 1 0 1 1 0 1 1 1 0 0 0 1 26% 27% 27% 1 1 1 0 21% 1 1 0 0 1 0 1 1 8% 3% 0 1 1 0 0% 1% 0 0 0 0 1 1 1 0 2007 2008 2009 2010 2011 2012 2013 2014 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 Sources: AAP and Publishing Technology 8 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Key drivers for growth 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 • Publishers : 0 1 1 0 0 0 0 1 – Large ebook catalog 1 1 1 1 – Offer of the right genres in the catalog 1 1 0 0 1 0 1 1 – Merchandising / promotions 0 1 1 1 0 0 0 1 – Standards-based approach to file format and metadata 1 1 1 0 – DRM 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 • Retailers : 1 1 1 0 – Ease of transaction: 1 1 0 1 1 0 1 1 • One-click purchasing 0 1 1 0 • Wireless delivery of content in a few seconds 0 0 0 1 • Ability to read across multiple devices 1 1 1 1 1 1 0 0 • Content synced across devices 1 0 1 1 – Breadth of selection : 0 1 1 1 0 0 0 1 • All titles on the print book bestseller list available in ebook format 1 1 1 0 • Ebooks available on the same day as the print book 1 1 0 0 1 0 1 1 – Competitive pricing 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 8 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Case Example: Digital Transition of Individual Books 0 1 1 0 0 0 0 0 1 1 1 0 Unit Sales Through 5 Weeks 1 1 0 1 1 0 1 1 Impact of Digital Transition Over 4 0 1 1 0 Years 0 0 0 1 1 1 1 1 • Rachel Gibson titles 1 1 0 0 65% • Print Format: 38% decline 1 0 1 1 0 1 1 1 • E-Book Format: 8,000% growth 0 0 0 1 • Combined Unit Sales Through 5 weeks: 1 1 1 0 75% growth 1 1 0 0 1 0 1 1 0 1 1 0 35% Impact on Authors 0 0 0 0 • More readers, faster 1 1 1 0 11% 1 1 0 1 • More royalties, faster 1 0 1 1 1% 0 1 1 0 0 0 0 1 Impact on HarperCollins 1 1 1 1 • More profit per unit 1 1 0 0 1 0 1 1 • Paid faster by retailers 0 1 1 1 • Earn back royalties faster 0 0 0 1 • Less inventory / working capital 1 1 1 0 1 1 0 0 1 0 1 1 Challenges 0 1 1 0 0 0 0 0 • New marketing capabilities required 1 1 1 0 • New author services 1 1 0 1 • New competition from self publishing 1 0 1 1 0 1 1 0 • Organization must adapt 0 0 0 1 1 1 1 1 12 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 THE HISTORY OF THE 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 TRANSFORMATION OF OUR 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 BUSINESS 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 10 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Managing the transformation of our business 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1. Business Structure 1 1 0 0 1 0 1 1 • Phase 1 -- incubator 0 1 1 1 0 0 0 1 • Phase 2 -- integration 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 2. Update job descriptions 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 3. Upgrade systems for global access and distribution 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 11 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 1. Business Structure Phase I: Incubation 0 1 1 0 0 0 0 0 1 1 1 0 • Took an incubator-style approach for the first 10 years. 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 • Digital products published by a separate business unit 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 • Strategic decision-making 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 • Consistent approach in negotiating contracts and publishing 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 • Streamlined operations Corporate 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 Digital Publishing Print Publishing 1 1 0 0 1 0 1 1 0 1 1 1 Digital Print 0 0 0 1 Publisher Publisher 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 Editor Production Marketing Sales Editor Production Marketing Sales 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 Print Print Print Print ebook ebook ebook ebook 0 0 0 1 book book book book 1 1 1 1 12 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 1. Business Structure Phase II: Integration 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 • Ebook publishing integrated throughout the organization 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 • Revenue going to the imprint who originated the title 1 1 0 0 1 0 1 1 0 1 1 1 • Print editors encouraged to develop new kinds of products 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 • Reengineered the process and constantly improving it 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 Corporate 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 Publisher 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 Editor Production Marketing Sales 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 Audio Print Audio Print ebook ebook 1 1 0 1 book book book book 1 0 1 1 Audio Print 0 1 1 0 ebook Audio Print book book 0 0 0 1 ebook book book 1 1 1 1 13 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 2. Update job descriptions 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 - Create faster & more flexible 1 0 1 1 0 1 1 0 workflows for all products 0 0 0 1 - Create new product types 1 1 1 1 Editorial excellence – 1 1 0 0 From acquisition through - Try new business models 1 0 1 1 - Improve process quality & 0 1 1 1 product release 0 0 0 1 efficiencies 1 1 1 0 1 1 0 0 - Deliver content and information 1 0 1 1 earlier to the market 0 1 1 0 0 0 0 0 1 1 1 0 NEW “CRITICAL PATH” DATE “ZIPPER” THAT LINKS PRODUCTS AND MARKETING 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 - Do earlier and more product 1 1 1 1 1 1 0 0 sampling 1 0 1 1 0 1 1 1 - Leverage size and scale of our 0 0 0 1 human organization in new Marketing excellence - 1 1 1 0 From sampling through scaling 1 1 0 0 channels (social!) 1 0 1 1 - Stop doing things that no 0 1 1 0 0 0 0 0 longer scale well 1 1 1 0 1 1 0 1 - Upgrade our communication 1 0 1 1 and sharing tools and methods 0 1 1 0 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 3. Upgrade systems for global access and distribution 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 - Content & information will be centrally stored & commonly searchable 1 0 1 1 - Major work processes will be digital and collaborative – not serial or manual 0 1 1 0 0 0 0 1 - Data is at the core of what we do and is essential across all processes 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 My 1 0 1 1 Data 0 1 1 0 My My 0 0 0 0 Data Data 1 1 1 0 1 1 0 1 Our Data & 1 0 1 1 Content 0 1 1 0 0 0 0 1 1 1 1 1 My 1 1 0 0 Data 1 0 1 1 0 1 1 1 My 0 0 0 1 Data 1 1 1 0 My 1 1 0 0 Data 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 SHARING 1 1 0 1 Integrating knowledge, data, and content 1 0 1 1 0 1 1 0 increases quality and add values for all 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 3. Upgrade Systems: Global Product Manager 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 Press Release, October 11, 2012 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 “HarperCollins to Launch New Global Publishing System 0 0 0 1 Streamlining Worldwide Operations and Data 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 “HarperCollins Publishers today announced that it will roll out a 1 1 1 0 new global publishing system….will enable HarperCollins to unify 1 1 0 1 1 0 1 1 editorial, marketing and business data around the world, widening 0 1 1 0 0 0 0 1 the reach of its print and digital publications in its core target 1 1 1 1 1 1 0 0 markets…. 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 “…It will transform the way staff view, manage and share product 1 1 0 0 1 0 1 1 information throughout the publishing lifecycle.” 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 ORGANIZATION CHANGES 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 17 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Publishing / production process - Before 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 Create QA 1 0 1 1 eBook eBook 0 1 1 0 0 0 0 1 1 1 1 1 Editorial Acquisition1 1 0 0 Review Copy Edit 1 0 1 1 Produce IncorporateDistribute 0 1 1 1 Bound Enhanced eBook 0 0 0 1 Galleys Content* 1 1 1 0 1 1 0 0 1 0 1 1 Tag 0 1Manuscri1 0 Manuscri 0 0pt0 Receipt0 Distribute to Reviewers 1 1 1 0 pt 2nd Pass Review / Distribute Design Book 1st Pass 1 1 0 1 Review, Edit Printed Interior Review 1 0 1 1 etc. Proofs Book 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 Print Typeset Transmit to 1 0 1 1 Proofread Book 0 1 1 1 Book Printer 0 0 0 1 1 1 1 0 Design Front Review 1 1 0 0 Cover Jacket Manuscript 1 0 1 1 0 1 1 0 Print Book 0 0 0 0 eBook 1 1 1 0 Bound Galleys Review / Design Back 1 1 0 1 Soft Dependency 1 0 1 1 Edit Cover Cover / Jacket 0 1 1 0 Interior * only for limited books 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Production process - After 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 EDITORIAL PROCESS CONTENT STORAGE, WORKFLOW AND COMPOSITION 0 0 0 1 All content creation and editing happens using a Content is output from a single source for both 1 1 1 1 familiar, standardized tool - MS Word. TRANSFORMATION print and digital composition. No longer 1 1 0 0 Allows editorial staff to have control of the Content is ingested into a centralized, global content dependent on finalizing the print product in order 1 0 1 1 content throughout the book production cycle. management system and routed via pre-defined to create the digital. 0 1 1 1 workflows for approval. 0 0 0 1 Key Process Change: All editing in MS Word Once content is approved, it is transformed from MS Key Process Change: Separating content from 1 1 1 0 format, instead of print-specific desktop Word to XML and output simultaneously for both print design/style; eliminating editorial corrections in 1 1 0 0 publishing tool (InDesign). and digital. InDesign; standardizing eBook output 1 0 1 1 0 1 1 0 Key Process Change: Implementing a centralized CMS; 0 0 0 0 digital workflows and routing; adopting XML as content 1 1 1 0 storage format. 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 Digital Output (ePUB, PDF) 1 1 0 0 Manuscript 1 0 1 1 Authoring and Editing Content Management System 0 1 1 1 (MS Word) (RSuite) 0 0 0 1 1 1 1 0 1 1 0 0 Print Output 1 0 1 1 (InDesign) 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Marketing – the discovery challenge 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Marketing – a continuous transformation 0 1 1 0 0 0 0 0 • From analog to digital 1 1 1 0 1 1 0 1 – Needs to be integrated – analog and digital 1 0 1 1 0 1 1 0 – Mixing paid, earned and owned media 0 0 0 1 1 1 1 1 – Social is important but so is direct marketing – what matters is the 1 1 0 0 objective 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 • From title marketing to relationship marketing 1 0 1 1 0 1 1 0 – Building email marketing and CRM capabilities 0 0 0 0 1 1 1 0 – Developing audience platforms 1 1 0 1 – Developing continuous relationships on authors’ behalf 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 • From product marketing to brand marketing 1 0 1 1 0 1 1 1 – Understanding and planning author brand positioning 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 • From local to global 0 1 1 0 0 0 0 0 – Looking at author brands on a global scale 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 • And all while keeping measurements, consumer insight and ROI 0 0 0 1 1 1 1 1 in focus to learn and improve 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Sales – increasing ability to manage complexity 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 Sales Before Sales After 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 Format : Print only Format : Print and Digital 1 1 1 0 1 1 0 1 Relationship : Sell in to physical Relationship : Selling and account 1 0 1 1 0 1 1 0 retailers management across many channels 0 0 0 1 1 1 1 1 Activity : Merchandising products in Activity : Merchandising products on 1 1 0 0 physical stores – at seasonal an on-going basis 1 0 1 1 0 1 1 1 intervals Pricing : Continuous and to 0 0 0 1 1 1 1 0 Pricing : Limited decision making to consumers as well as retailers 1 1 0 0 1 0 1 1 physical format changes moments depending on model 0 1 1 0 0 0 0 0 Channel conflict : only amongst Channel conflict : managed across 1 1 1 0 physical retailers of different kind – owned stores, digital retailers, 1 1 0 1 1 0 1 1 managed via exclusives / custom physical retailers – with limited 0 1 1 0 0 0 0 1 product ability to differentiate products 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 THE FUTURE 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 23 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Monetize across many channels 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 1. Direct Sales from Publisher site 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 2. Subscription 1 0 1 1 0 1 1 1 • Consumer pays a monthly fee for 0 0 0 1 access to an unlimited library 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 3. Sales to libraries 0 0 0 0 1 1 1 0 • Short-term access for library 1 1 0 1 1 0 1 1 patrons 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 4. Sales to schools 1 0 1 1 0 1 1 1 • Purchased by the schools for short- 0 0 0 1 1 1 1 0 term access by students 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 5. Non Traditional channels 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 8 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 Continue to drive new products and consumer 1 1 0 0 1 0 1 1 experiences 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 1. Bundles 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 2. Collections and parts 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 3. Audiobooks 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 4. Enhanced Ebooks 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 5. Apps 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 8 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 Global approach and growth opportunities 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 PwC International Ebook Growth - Publisher 1 0 1 1 Value 0 1 1 0 0 0 0 1 (USD millions) 1 1 1 1 1 1 0 0 12,000 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 2009-2013 CAGR = 30% 1 0 1 1 0 1 1 0 8,000 0 0 0 0 1 1 1 0 1 1 0 1 7,355 1 0 1 1 0 1 1 0 6,302 0 0 0 1 5,216 1 1 1 1 4,000 1 1 0 0 4,237 1 0 1 1 3,287 0 1 1 1 2,521 0 0 0 1 1,692 1 1 1 0 1,173 1,940 2,191 1,354 1,649 791 1,065 1 1 0 0 376 564 1 0 1 1 - 2010 2011 2012 2013 2014 2015 2016 2017 0 1 1 0 0 0 0 0 English Countries Non-English Countries 1 1 1 0 1 1 0 1 But more in local than in English language: Growing to $7 Billion from $1 Billion 1 0 1 1 0 1 1 0 0 0 0 1 Source: 2013 PwC Global Consumer and Educational Book Publishing English International Countries include the United Kingdom, Australia, New Zealand, Canada, and India 1 1 1 1 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 • Questions? 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 • Thank You! 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 1 1 0 0 1 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 1 0 0 1 0 1 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1