Much of the book industry is hard at work developing and implementing digital strategies. But when will we experience the tipping point? How will this impact campus stores? And what do you do in the interim to prepare. In this presentation, Thought Leader speaker Kelly Gallagher, Vice President of Publishing Services at Bowker, provides his unique perspective on this industry “game changing” event. Kelly shares with you recently published data from the Book Industry Study Group (BISG) that examines both students and consumer book/e-Book behaviors and his insight on where e-books are headed. This presentation provides suggestions on what you can do now to prepare, Kelly Gallagher’s thoughts on potential roles for campus stores, and how you might make money along the way. This was presented on 2/26/11 at CAMEX 2011 for college bookstores.

1. The eBook R/Evolution: Where Do Campus Stores Fit In? Presenter: Kelly Gallagher, RR Bowker

4. the times they are a chang’n

5. rate of… motivation for… direction of… CHANGE …in strategy

11. Who’s problems are we looking to solve?

12. Publisher? Piracy Used Books Open-Source Rentals COGS e-Book Transition

13. Administration? Funding Enrollment Faculty Facilities Tuition

14. Bookstore? Administration e-tail Off-Campus Rentals Faculty e-Books

15. Student? Expertise Convenience Relevance Requirements Cost

16. So looking ahead… …how do we set strategies in times of uncertainty?

17. Know the market trends… Know the end user… Know your value proposition!

18. Know the market trends…

19. 19 Overview of Textbook Market for AY 2010

20. Pop Quiz!!

21. True or False? For the first time on record, the textbook industry shrank ($$$) last year?

22. 22 The College Textbook market continues to grow in spite of dire predictions

23. Multiple Choice The average price of a new textbook in AY2010 was a) $74b) $84c) $94d) $104

24. 24 Students are Right: Textbook Prices Rising

25. Multiple Choice The used textbook market isa) >60%b) >50%c) >40%d) >30%of the total (units) market?

26. 26 Two Thirds of Units Sold are New Units

27. 27 Over 70% of Textbook Dollars Sold are New Units

28. Career Texts are Keepers - Top 10 Disciplines with Lowest Used Book Rates 28

29. Liberal Use of Used Texts -Top 10 Disciplines with Highest Used Book Rates 29

30. True or False? Math, English, and Science comprise the top 3 selling ($$$) disciplines?

31. 31 ‘The Basics’ Top 10 Disciplines in Total Dollar Sales (millions)

32. Jobs, Jobs, Jobs – Top 10 Growing Disciplines 32

33. Liberal Arts Not Supported -Top 10 Declining Disciplines 33

34. Multiple Choice Psychology and ________a) Spanishb) Chemistryc) Biologyd) None of the aboveare the top selling ($$$) courses?

35. 35 101 - Psych & Spanish Top 10 Courses in Total Dollar Sales (millions)

36. Speech & Biology TextsTop 10 Textbooks (ISBN’s) in Total Dollar Sales (millions) 36

37. A Tale of Two Revenues – The “Myers” Intro to Psych Franchise 37

38. Know the end-user

39. 39 Student Attitudes Study The semi-annual survey focuses on college student perceptions related to educational content in the higher education market. Key areas of focus were to determine: Rate of change and preference for digital texts Value of content and learning platforms Illicit behaviors with content It is powered by Bowker's PubTrack Consumer Panel, the publishing industry's exclusive resource for understanding buying behavior. The online survey polled 1505 college students drawn from a nationally representative panel.

40. Multiple Choice By the end of 2010 e-Books represented over ___%a) 5%b) 10%c) 20%d) 25%of the total book market.

41. Overall eBook Trends

42. Do readers really prefer digital? Trade Publishing – After reading ‘e’ 17% say that they prefer print And 17% say that they were not satisfied with the digital display 66% report they are generally satisfied with digital books 42

44. Now 38% of iPad owners are reading digital magazines (Changewave Research)43

45. What About E-Textbooks, 44

46. Wide Arayof ‘e’Top 10 Disciplines with Highest e-Textbook Rates 45

47. Multiple Choice When given a choice ___%a) 55%b) 65%c) 75%d) 85%of students would choose print over text.

48. 47 Key Finding-Print vs. e-Textbook 75% of students preferred traditional printed textbooks over digital replica e-textbooks. Like the look and feel of print Potential for permanence of ownership Opportunity for resale

49. 48 Students reported low satisfaction with e-Textbooks © 2011, the Book Industry Study Group

50. True or False? Kindle, iPad, & Nook have now surpassed PC’s as the primary eText reading devices?

51. Laptops remain the top device for reading eTextbooks

52. Multiple Choice Trade ‘e’ sales are expected to hit 25% by 2013. Most predict Higher Ed will reach that number ina) 2014b) 2015c) 2016d) 2017

54. Most students are unlikely to purchase and carry multiple devices.

55. DRM

56. Tech-savvy does not = instant conversion

57. Digital Fatigue

60. Compete on the value propositions you know you can win on… & choose no more the two! 5 Core Retail Value Propositions Price Service Convenience Selection Relationship or Experience

61. Student & Bookstore Affinity – what values are you already winning on? Source B&N College

63. Keeping Perspective

64. Multiple Choice My Alma Mater is…a) The College of New Jerseyb) Yalec) Northern Arizona U.d) University of Houston

65. Kelly Gallagher VP Publishing Services Bowker Kelly.Gallagher@Bowker.com www.pubtrackonline.com 60 Thanks!