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 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 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) • (1998) • David Fulton (2006) • CRC Press (2003) • Productivity Press (2007) • (1997) • Architecture Press (2011) • (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

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