Have it Your Way!

1. Have it Your Way! Barbara A. Pellow February 15, 2012

2. Topics • Critical Trends • Barb Pellow, Group Director, InfoTrends • Market Perspectives • Lynn Terhune, Global Digital Print Administrator, John Wiley & Sons • Larry Bennett, President of Distribution, Bookmasters, Inc. • Larry Brewster, Senior VP of Business Strategy and Development, Lightning Source, Inc. • Question and Answer Session

3. The Dynamics, The Challenge, The Uncertainty

4. There is Good News! Book publishers' revenue increased 5.6% between 2008 and 2010 to $27.9 million Unit sales in all formats were 2.57 billion, a 4.1% increase Resurgence across all markets • Higher education at $4.55 billion, up 18.7 % • Trade books at $13.9 billion, up 5.8% fueled by e-books • Professional publishing at $6.3 billion, up 6.3% • Scholarly publishing increased 4.7% Source: Bookstats American Association of Publishers and the Book Industry Study Group, August 2011

5. A Whole New World • Affordable books on demand • High-speed inkjet • Electrophotographic technologies • Service provider support to move seamlessly between print and digital editions

6. Pages Moving to Digital Top 15 Applications Moving to Digital (2010 -2015)

7. Books Dominate the Analog-to-Digital Migration Driven by High-Speed Inkjet • Increase of 45 billion pages • 14.2% Compound Annual Growth Rate • 16.6% of total production at 94.5 billion impressions

8. You’ve Heard it Before… • The Benefits of Books On Demand • Risk Reduction • Cycle Time • Specialty Printing and Fresh Content • Bottom-Line Profitability

9. You’ve Heard This Before Too!

10. What Does the Future Hold? Special Call out

11. The Future of Print Lynn Terhune, Global Digital Print Administrator

12. Who is John Wiley & Sons? • Global publisher of print and electronic products • Specialize in: • Scientific, technical, medical and scholarly • Journals • Encyclopedias • Books • Online products and services • Professional/trade books • Subscription products • Training materials • Online applications and Websites • Educational materials for undergraduate/graduate students and lifelong learners

13. Wiley’s Global Digital Print Activity • Global Demand Print Program • Started slowly with Ingram in 1998 • Today: 2 PVs & 3 SVs • Over 16,000 Wiley ISBNs available through GDP today • Approximately 150 - 200 new titles going into program every month • FY11 (ending April 30, 2011): 804,000 units • FY12 (May-Nov): +478,000 units / +5.6% over PY • Other Wiley Programs that Utilize Digital Printing: • US SR Program back to DCs represented another +161,000 units in FY11 • GOI in US(+190,000 units FYTD), AU (+11,000 units FYTD) & soon to launch Singapore local digital printing

14. What’s the Future of Print? • Clearly DIGITAL • Living in constant industry TRANSITION • Experiencing the industry TRANSFORMATION • Drivers to Digital Print • Companies helped publishers recognize the value of giving customers what they want, when they need it! • Pushing publishers to create Print-to-Order systems/manage inventory differently, tighter • Goal • Offer your customers PPA! • How? Develop internal programs that exploit digital printing as a tool for inventory management to ensure Persistent Product Availability

15. Bookmasters TOC 2012 Presentation to Publishers Larry Bennett, President of Distribution

16. Bookmasters’ Overview • Diversified service provider to book publishers, authors • 40-year-old, family-owned business • Based in Ashland, Ohio • Dedicated, low-turnover workforce; 280 employees • All divisions in company-owned 250,000 sq. ft. facility Combining cutting-edge technology with personalized service

17. Bookmasters’ Business Units • Book Manufacturing • Offset and Digital • Book Distribution • Traditional and POD • Content Services • Pre-pub services, from manuscript to print-ready or e-Book • E-Books • File creation and distribution

18. Manufacturing: Inkjet-Based Digital Printing • 40-year tradition as an offset printer • 10 years as a digital printer • Multiple formats including paperback, casebound, and wire-O; black ink and full-color text blocks • Digital manufacturing includes toner-based and inkjet • Supplying one-offs and digital short runs Print files can be used for e-Book conversion

19. Distribution: Using Digital to Minimize Risk • National sales force for most traditional book retailers/wholesalers • 25 years of experience as a book distributor • Special Markets Group for non-traditional outlets (craft stores, museums, supermarkets) • National coverage of K-12 market • Strong coverage of CBA market • Strongest Spanish department in the industry • Traditional (stock) distribution, POD, or hybrid of the two • International distribution through global partners in the U.K., Europe, Mexico, and Latin America Just submit your metadata once and you’re done!

20. Content Services Capabilities Editorial/Project Management Design/Production Interior Design Integrating print and e-Book workflows in InDesign Typesetting/ Page Composition Cover Design Illustration Scanning 25 years experience in these disciplines • Editorial Assessment • Developmental Edit • Copyediting • Proofreading • Indexing • Permissions • Sense Read • Accuracy Check • Translation/Americanization Same services for “p” and “e” books

21. E-Book Creation and Distribution • Conversion from print PDF to ePUB and/or ePDF • Fixed layout or reflowable • Distribution to all major resellers • Monthly payments, reporting by title • Ability to create Widgets for sampling, promotion • Can create/manage online promotions with specific resellers • DRM wrap capabilities • Ability to sell e-Books through Bookmasters’ store and/or Publisher’s own store • 10 years experience as an e-Book reseller

22. Marketing Options • Trade advertising through major wholesalers and other industry vehicles • Web and social media marketing • Creation and management of social media platforms • Public relations for titles, authors, collections • Pre-pub sampling of printed books and e-Books to reviewers, bloggers, and other industry professionals • Multiple options for Spanish language titles Marketing for print and e-Books at the same time

23. Recommendations for Publishers • When evaluating distribution options, look at total cost, including warehousing, shipping, inventory financing • Strive to achieve a production workflow that produces “p” and “e” books simultaneously, even if that means outsourcing • Seek cost-effective ways to make your titles stand out • Maximize your revenues on your IP through international distribution whenever possible

24. Ingram Content Group Larry Brewster, Sr. VP of Strategy & Business Development

25. Global Supply Chain Solutions for Publishers • Over 45 years in the publishing industry • 3,000 associates worldwide • Distribution to 195 countries on 6 continents • 38,000 channel partners • 25,000 publishing partners • Over 9 million active print titles • 7.7 million global direct-to-consumer shipments in 2011 • 2.1 million books printed each month across four facilities • Performed 13.5 million digital distributions in 2011

26. Our Business Models • Global Physical Content Distribution • Global Digital Content Distribution • Physical Inventory Management • Digital Asset Management • Print Services

27. Our View of Publishing Today (1) • Print is shrinking while e-content is exploding • There are many, many more publishers • Ease of entry to supply chain makes more content available • The supply chain is collapsing/consolidating: retailers can become publishers, publishers can become retailers • Publishers are reducing inventory and lowering supply chain costs • New technologies and communities are creating direct-to-consumer relationships • Consumers expect access to global content

28. Our View of Publishing Today (2) How do publishers thrive in this new environment? Focus on what they do best and find good partners to help with the rest!

29. Looking Ahead Publishers… • Must address the complex array of issues and systems needed for digital asset management and distribution • Will reduce or eliminate physical inventory and warehouse space • Will seek outsourcing solutions to provide physical logistics and warehouse services • Will seek out distribution partners capable of speed-to-market efficiencies and global reach

30. Publisher Decisions

31. Evolving Definition of a Book Electronic On demand Connected Interactive 1:1 Sound & Motion Immediacy Personal content Multiple delivery methods Physical Static Manufactured in large quantities Professional authors/editors Color cover Monochrome internally Hard cover first Soft cover second Bricks & mortar distribution

32. Where Do We Go from Here? ? • Print technology factors • Is the productivity high enough? • Are the running costs low enough? • Is the print quality good enough? • Is the technology reliable enough for production? • Are the substrates cheap enough? • Is the format size big enough? • Market demand factors • Immediacy • Personal content • Relevance • Easy access • Preferred delivery method