The Academic Book Business
Emerging markets, technology opportunities, and trends in delivering content
21st May 2012
1 Roger Horton CEO Taylor & Francis
2 Academic Information Division
Overview of the AI division – books and journals
Characteristics of the AI Book Business
Profile of the Book Business
Digital and e-Books
Summary
Questions
3 Academic Information Division
Revenues of £324m in 2011 (£153m books), Adj OP margin of 36%
Formed in 1798, floated 1998, merged with Informa in 2004
Employ over 1,400 people
Centres in UK, USA, Singapore, India, China, Australia and Europe
Built through organic growth and fully integrated acquisitions
Focused on resilient and growing niches OP
4 Specialist Academic Information
Target markets - university libraries, under/post graduate students, researchers and professionals
Shift from print to electronic delivery 100% journals online, e-book revenues 12% from zero in 10 years
Digital excellence, geographic expansion and high value/margin specialism
Quality specialist content provider
Books and journal businesses thrive on co-existence
Top Humanities and Social Science Academic publisher with STM strengths
Global focus, global reach
5 Academic Information
1,600+ subscription based journals
3,500+ new book titles p.a.
60,000+ titles in books back list
Revenues by Type Revenues by Sector Revenues by Geography
6 The Global AI Business Turnover £m and growth Turnover £m 350 4.5% Books 5% 20% 300 Journals Total
14% 250 13% % Growth 200 5% 29% 8% 3% 4% 150 13% 9% 10% 20% 18% 100
50
0 2006 2007 2008 2009 2010 2011
7 Senior Management Team
Roger Horton CEO
Emmett Jeremy Ian Kevin Dages North Bannerman Bradley President Managing Managing President US Director Director UK US Books HSS Books Journals Journals
Christoph Stuart Chesher Dawson Group COO Sales Director
8 Competing Publishers
Publisher Student Research Professional HSS STM Books Journals Learning & Ref Crossover Taylor & Francis (AI) Wiley/Blackwell Springer OUP Sage Elsevier McGraw-Hill Pearson Cengage
AI - wide reach across fragmented market AI - balanced, specialist, content levels AI - quality books and journal content by subject, format and delivery
9 The Books Business
10 AI Books - Resilient
Publish through the knowledge chain
Content quality is king – print, e-books, online are merely the delivery tools
Depth, scale and price setting
Education resilient through the cycle - seasonal not cyclical
Renewable and repeatable revenue streams
Global not local
11 Books – Core Strengths
Market leading brands in humanities, social science, science and technology
Global reach and infrastructure
Digital strategy and production innovation
Deep back catalogue consistently providing 70% of annual book revenue
Strong control of copyright, margins and pricing
Long standing, strong management team
12 Books Revenue by Geography
24%
UK 51% 8% Europe Rest of World 17% North America
13 Book Revenue Growth by Key ROW Territory
35.0% 32.0%
30.0%
25.0%
20.0% 15.0% 14.0% 15.0% 10.0% 8.0% 2011 Growth Rate Growth 2011 10.0%
5.0%
0.0% Japan India Singapore Middle East China Market territory
14 Acquisition Strategy
Bolt-on Strategic Effective way of commissioning new Strengthening of position in key subjects publishing or levels
For example: Including:
• Kogan Page Education (2003) • Routledge (1998) • David Fulton (2006) • CRC Press (2003) • Productivity Press (2007) • Garland Science (1997) • Architecture Press (2011) • Earthscan (2011)
Value created by full integration, creation of scale and close management
15 Profile of the Books Business
Jeremy North MD Books, HSS
16 Criteria for Success
Quality, global, specialist authorship
Streamlined efficient production and inventory
Global and local distribution
Longevity of content and re-editioning
Clearly defined audience
Global rights and control
Pricing
17 Profile of the Book Business
Teaching & learning
Research & reference
Professional cross-over & self-learning
Repeatable, sustainable, scalable Maximise content up and down the curriculum Author kudos, broad customer base, regional opportunities
18 Marketing in a New World
AI RE- BOOKS END SELLER PUBLISHING CUSTOMER
Marketing Communications
Author Communities
Academic Gatekeepers
Mailing Databases
Print versus e-promotion
19 Marketing in a New World
Evolving rapidly to encompass: social media and digital marketing traditional printed and mailed materials advertising and conference attendance
Email marketing versus traditional mailings now 70% of mix
Metadata and content feeds to aggregators and re-sellers
Greater geographic coverage Greater subject coverage Deeper penetration to the back catalogue
20 Profile of Market and Sales Reach
Christoph Chesher Group Sales Director and President Asia Operations
21 Sales Reach
Decline of high street and campus bookshops
Online suppliers growth and digital momentum increasing
Restructured sales teams to get closer to our customers
Characteristics of selling have changed as buying habits change
The buying decision process – libraries, consortia, booktrade
But the real shift in sales model has been in e-Books
Increasing overlap with the Journal sales teams
22 Profile of e-Book Business
23 23 What is an e-Book
‘Traditionally’ a straight digital facsimile of the printed book
In 2000 several formats available
2012 - Kindle format, Adobe & ePub - trade formats of choice
Why a book is digitised when in the back catalogue. All new are done
PDF still widely used in academic and library markets
Evolution to enhanced interactive eBooks
24 History of e-Book Sales
£m 20
18 e-Book 16 Revenue 14 12 £ (m’s) 2006 2011 Growth Growth%
10 Print 94,7 134,4 39,7 42% 8 Electronic 6,9 18,8 11,9 173% 6 4 2
0
2006 2007 2008 2009 2010 2011
25 Profile of e-Book Business
+38,000 e-Books -> over 45,000 by end of 2012
New T&F e-Books platform to be launched July 2012
Hardback print price to libraries, Paperback print price to public Royalties same as print
Sell directly and through third party library aggregators and eBook retailers. Firm sale and rental.
2011 Sales profile 80% of all sales to the librarian 20% of all sales the retail market
e-Book revenue now over 12% of total book sales e-Book piracy not material
26 26 Digitisation and Online
Content is king but format and delivery is important
Today the key issue is not technology it is pricing
Production efficiencies have been dramatic in the last few years
Books are growing especially since Kindle and iPad
Delivery platforms – build or buy, purchase or partner?
POD, print local
Innovate and experiment – Filmskills.com
27 Book Strategy and Outlook
28 2012 and Beyond
Focus on digital excellence, geographic expansion, and high margin/value business
To blend organic growth with strategic value enhancing bolt-on acquisitions
Continued growth blend across the global markets
Resilience - a non cyclical, robust foundation stone for Informa, delivering consistently for the long-term
29 Selling books that don’t come back, to customers that do
QUESTIONS
30