Amazon Kindle DX Test

!"#$%$&'()*+'+%,",$-%(',"*,'(".,+*(,/$'('0$1+2( Today’s Discussion

! eReader Overview

! eReader Device Manufactures

! Device / Screen Convergence

! Leveraging The eReader / Digital Subscription Opportunity

! New York Times / Amazon Kindle DX Test

1 E-Readers – A Print Reading Experience

2 Market Size in the United States

3 Optimum eReader Consumer Experience

! Ubiquitous Connectivity: The consumer should be able to download content anywhere.

! Robust E-Commerce: Purchasing content for the device should be easy, one-click, with credit card information stored on file. Subscriptions should be delivered to the device in a seamless fashion requiring no action from the consumer.

! Ease of Use: The screen should be designed for reading. The device should be light weight, with long battery life. Content should be easy to navigate through.

! Content Catalog: There should be a large offering of books, newspapers, magazines and blogs.

! Advertising Capability: The provider should be developing an advertising ecosystem.

! Price: The price to the consumer should be no more than $200 to $300 with some research indicating $99 as a major tipping point. 4 Amazon Kindle

! Industry leader

! Established minimum expectations that other eReader manufacturers need to meet

! Kindle 2 is $299 / Kindle DX is $489

! New York Times and Amazon conducting a test of a bundled Kindle DX / 1 Year NYT Subscription / Branded Cover

5 Sony Reader

! 3 devices by December 2009

! $199 / $299 tethered

! $399 Daily Reader to launch December 2009

! Daily Reader has wireless connectivity to mirror Amazon Kindle experience

! Best Buy – 1,000+ locations

! Library relationship

6 IRex

! U.S. launch 4th quarter

! Wireless access – international

! 8.1 inch screen

! Touch-Screen

! $399 price

! eCommerce hub

! Partnership announced with Barnes & Noble and Best Buy

7 Plastic Logic

! 10.7 inch screen

! Touch-Screen

! Launch date in 2010

! Looking to better replicate newspaper and magazine reading experience

! Targeting executives

8 Netbooks

! Fastest selling category of computers

! Opportunity to market subscription and Netbook bundle

! Publishers need to consider a paid product for traditional screens

! Opportunity to address device convergence question

9 Possibility of Device and Screen Convergence

! Will consumers continue to carry a dedicated reading device?

! Improvement in Mobile devices

! New computing form factors – Tablets/Slates

! Advancing screen technology

! Device manufacturers are pursuing a multi-screen strategy

! Possible pressure on paid subscriptions in a Browser environment

! Publishers should be prepared for the possibility of convergence

10 The Relationship With Our Customers

! Publisher needs to maintain a strong relationship with its readers and “Own The Customer”

! Publisher should maintain the billing relationship with its readers

! Publisher should determine the price to the consumer

! Publisher should require access to all customer data

! Publisher should require access to all product usage data

! Publisher should maintain the ability to market to their customers

CONTENT OWNING THE DEVICE PROVIDERS CUSTOMER

• Newspapers • Customer Relationship • Kindle • Books • Content Warehouse • Sony Reader • Blogs • E-Commerce • First Paper • Magazines • Amazon • Plastic Logic 11 • Sony • Irex • First Paper Pricing Across Products and Platforms

eReader $$$Price $$$

Replica Edition

Web / Mobile

Closeness to Print Experience

12 Managing Economics of Reader Migration

HYPOTHETICAL EXAMPLE

$200 Gross revenue per print subscriber -$100 Variable costs per print subscriber (fulfillment, newsprint & ink) $100 Net margin per subscriber

Publisher’s Revenue Share

13 Marketing Digital Subscriptions

! New entry point for Web or Mobile audience who are not interested in Print

! Opportunity to win-back expired subscribers

! Develop attractive product packages that bundle Print/eReaders/ Mobile/Web, etc.

! Brand subscription opportunities

! Print/eReader bundle to maintain most profitable Print days

! Target eReaders to least profitable print markets

! Device subsidy with long-term subscription

! March 2007 début

! $14.95 per month

! Free to Print subscribers

! June 2009 re-launch on Adobe AIR

! Runs on PC, Mac & Linux

16 New York Times on Amazon Kindle

! Amazon is currently the largest seller of eReader devices and eReader content. More than 10% of their books are now sold via the Kindle.

! The New York Times has been available on the Kindle for almost two years.

! The New York Times has consistently been the #1 selling newspaper on the Kindle and has amassed a significant number of subscribers.

! The New York Times Kindle Edition currently sells for $168 per year.

17 New York Times / Amazon Kindle DX Test

A unique e-mail promotion to non-routable and expired home delivery subscribers.

$499 for:

! A one-year subscription to The New York Times Kindle edition ! A Kindle DX

! A limited-edition branded New York Times cover

18 The Process And Objectives

Marketing Campaign E-Mail E-commerce Database Tool Tool Web Site

! Gauge demand for subscriptions that are sold bundled with a device at a reduced price ! Create a full New York Times experience for new Kindle subscribers

! Test our capabilities to sell and fulfill a subscription/device bundle

! Sell subscriptions!

19 The New York Times Purchase Experience

Marketing E-Mail

20 The New York Times Purchase Experience

Marketing E-Mail Web Site

21 The New York Times Purchase Experience

Marketing E-Mail Web Site Order Confirmation

22 The New York Times Purchase Experience

Marketing E-Mail Web SiteOrder Confirmation Shipping Confirmation

23 The New York Times Purchase Experience

Marketing E-Mail Web SiteOrder Confirmation Shipping ConfirmationUn-Boxing Experience

24 Thank You!!!

Yasmin Namini The New York Times SVP, Marketing & Circulation [email protected]

Charlotte Gordon The International Herald Tribune Director, Strategy & Marketing [email protected]