Digital Textbooks An Abundant New Media Opportunity

1. Digital Textbooks An Abundant New Media Opportunity Kent Freeman VitalSource Technologies, Inc An Ingram Content Group Company

2. Helping Content… Reach Its Destination

3. Vital Source Higher Education focus 1.5 million users 80+ publishers 80,000+ titles 17 languages 3-way access

4. Important Trends • Current Market Situation: • Accelerating Growth • Accelerating Price Pressure

5. Important Trends • Downward price pressure: • Lack of rich media • Lack of integration • Poor quality presentation • “Page under glass” • Perception of cheaper creation • Perception of cheaper acceptable options

6. Important Trends • Sales Drivers/Price protectors: • Multi-platform implementation • Integrated • No single device • Online-Offline-Mobile • Rich Media embedded • Interactivity • Sharing

7. Important Trends • Table Stakes: • Accessibility • Scalability • Ingestion/Conversion • QA • Delivery • Functionality • Basics • Print • Copy

8. In the last 12 months Vital Source: Experiencing Dramatic Growth • Tripled active registered users • 10X online usage • 100X notes and highlights • Mobile growth • Significant institutional adoptions - US and non-US

9. Projected Market Growth Sources: MBS, NACS, Simba

10. Our Growth in Users – 7 Years

11. Global Growth - 2009

12. Global Growth - 2010

13. Global Growth • Market - Global Growth - Online Usage 2011

14. What is an “e-textbook”?

15. Highlight Annotate Portable What is an “e-textbook”? Accessibility Bibliographicsupport Activequizzes Rich Media Sharenotes Changefontsize Search PRINT

16. Devices and Mobile • Nearly every college student in the U.S. owns both a computer and a phone • 80% own a laptop • 3% own an e-reader • 36% own two computers • Two-thirds own Internet-capable handheld device eCar Study, 2010 16

17. Importance of Scalability Vital Source 12-month online growth

18. Mobile Access Options - Cloud

19. Formats Matter

20. EPUB3 – The Accelerator

21. VST Acquires VPG Interactive Learning Objects Mobile Apps Interactive Whiteboards Enhanced eBooks Rich Media

22. <figure id="morrison4264c02-fig-0003"><title><label>FIGURE 2-3</label>Identifying instructional problems</title><graphic picfile="978-0-4700-7426-8_0007" alt="This figure is a flow chart with 3 labeled boxes representing 3 different possible techniques and their relationship with each other. This chart is multi-directional. At each box, labeled arrows point towards one or more boxes. Each arrow is labeled with an action. Here the flow chart is described as a list in which the possible actions are listed beneath each box label. 1. Needs Assessment a. An arrow labeled “Determine if instruction is appropriate“ points toward Performance Assessment b. An arrow labeled “Refine focus” points toward Goal Analysis 2. Performance Assessment a. An arrow labeled “Refine focus” points toward Goal Analysis 3. Goal Analysis a. An arrow labeled “Determine if instruction is appropriate” points toward Performance Assessment b. An arrow labeled “Identify needs” points toward Needs Assessment." w="451" h="275"/></figure> Accessibility

23. Thank you! Kent Freeman President, Vital Source kent.freeman@ingramcontent.com