Key findings from a Boston Consulting Group survey of nearly 13,000 consumers in 14 countries, conducted in March 2010. Among the insights: E-readers and tablets are poised to become popular mass-market devices. Half of respondents said they plan to buy an e-reader or tablet within three years.

1. BCG e-reader survey
Key findings
May 2010

2. Background and context
Competition is heating up in the market for e-readers and tablets. Single-purpose e-readers like
Amazon's Kindle and multi-purpose tablet devices like Apple's iPad are both selling strongly, and
many more devices are poised to enter the fray. In response, content providers are scrambling to
develop immersive applications for these devices.
These devices could dramatically reshape the media and broader consumer electronics industries,
tech, and software industries. Several outstanding questions will determine the degree and nature of
their potential impact:
• At what price will consumers flock to these devices?
• What killer applications/content platforms will emerge?
• In addition to reading, what else will consumers want to do on these devices?
• How much are consumers likely to pay for different types of content on these devices?
• Will widespread adoption destroy the value of media companies (as the introduction of MP3 players did)
or is there reason for optimism?
To begin answering these questions, The Boston Consulting Group (BCG) conducted a survey of
nearly 13,000 consumers in 14 countries, including the U.S., U.K., France, Germany, Japan, and China,
in March 2010. The findings are telling.
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3. Key findings from the survey
The e-reader/tablet is poised to become one of the most successful consumer electronic/tech products
• Over half of U.S. consumers are familiar with the device
• Globally, 30-50% intend to purchase a device within a year; 50-75% within three years
Widespread adoption will depend on a drop in price and a shift toward multi-function devices
• The sweet spot for multi-purpose devices seems to be $130-$200; $100-$150 for single-purpose devices
• 66% of global consumers prefer a multi-purpose device; 24% a single-purpose device
Consumers are willing to pay relatively attractive prices for content
• 100%, 80%, and 70% expect to read books, magazines, and newspapers on e-readers/tablets,
respectively.
• U.S. consumers are willing to spend $5-$10 for a digital book; $2-$4 for a magazine, and $5-$10 for a
monthly newspaper subscription
But they also expect to do more than just read, suggesting that e-readers/tablets will become the first
truly converged device
• 90%, 86%, and 74% of U.S. consumers expect to browse the Web, send email, and view videos,
respectively
Finally, in the context of the battles between Apple, Google and others to define the competitive
landscape of the industry, the survey suggests that consumers are looking for freedom of choice
• 91% of existing e-reader/tablet owners say that the ability to buy content from more than one store would
encourage them to buy more
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4. Survey conducted in March 2010
12,717 respondents from top 14 markets participated in the survey
Finland (n=696)
Norway (n=697)
China
Germany (n=989) (n=813)
UK (n=992)
Italy (n=979)
Japan
USA (n=978) (n=982)
Spain (n=983)
S. Korea
Austria (n=979)
(n=697)
France India
(n=986) (n=959)
Australia (n=988)
Note: All are web users; all are print magazine, newspaper and/or book consumers
Source: BCG e-reader survey (N=12,717, March 2010)
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5. Already very high awareness of e-readers/tablets
Over 50% of US consumers somewhat or extremely familiar
Not heard of them
Heard of them
Somewhat familiar with them
How aware are you of e-readers/tablets? Extremely familiar with them
(% of respondents)
Own one
6 2 7 5 6
9 12 12 10 11 10
15 14
24
23 31
30 39 44
42 44 47
46 53 56 62
33 65
22 54
41
34 29 18
27
32 27
25 19
34 36 22
22 26 18 17
16 19
15 11 13
9 10 7
4 4 3
4 2 3 2 2 2 2 2 2 3 0 4 2
India China Japan US Korea Italy Germany UK Australia Austria France Spain Finland Norway
Source: BCG e-reader survey (N=12,717, March 2010)
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6. Very strong intent to purchase over the next 1-3 years,
especially for multi-purpose tablets
~30-50% intend to ~50-75% intend to Strong preference for
purchase in next year purchase within 3 years multi-purpose tablets
How interested are you in purchasing How interested are you in purchasing What kind of a digital reading device would you like to
an e-reader/tablet within 1 year? an e-reader/tablet within 3 years? own?
WW median
WW median
73% 73% US
US 66%
57% 53%
51%
47% 49%
39%
28% 29%
24%
Overall1 Already Overall1 Already Single-purpose Multi-purpose tablets
familiar1 familiar1 e-readers (e.g. (e.g. Apple iPad)3
Amazon Kindle,
Sony Reader)2
1. This excludes those who already own e-readers, 2. Single-purpose e-readers are specifically designed to support electronic versions of books, magazines and/or newspapers, 3. mutli-
purpose tablets support internet access, emails, photos, audios, videos (TV/movie) besides digital books, magazines and/or newspapers.
Source: BCG e-reader survey (N=12,717, March 2010)
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7. US consumers willing to pay ~$100-150 for single-purpose
e-readers and ~$130-200 for multi-purpose tablets
Single-purpose e-readers (e.g. Amazon Kindle)
Willingness to pay for e-readers/tablets Multi-purpose tablets (e.g. Apple iPad)
($) Applie iPad: $499~$829
500
Sony Reader Touch: $299
300
Amazon Kindle, B&N Nook: $259
200
Sony Reader Pocket: $169
100
0
Norway Italy Australia Austria Finland Korea Germany UK Japan France US Spain China India
Single-purpose ($)
Inexpensive 150 130 120 130 70 90 130 110 110 130 100 130 70 60
Expensive 200 260 180 200 130 170 160 150 190 150 150 160 120 90
Multi-purpose ($)
Inexpensive 220 190 180 190 130 140 150 150 110 150 130 130 120 110
Expensive 340 330 280 270 270 260 230 230 220 220 200 200 210 160
Note: Among people who currently own e-readers or who are aware of e-readers and are interested in purchasing an e-reader within 3 years, `Van Westendorp's Price Sensitivity Meter method was used to calculate the
optimal price
Source: BCG e-reader survey (N=12,717, March 2010), company websites
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8. Consumers primarily interested in using e-readers/tablets to
access books, magazines and newspapers
~70-100% of potential e-
~30-90% of e-reader owners currently read digital publications and 65% reader/tablet users expect to read
want to read other magazines and/or newspapers in future digital publications
% of e-reader owners who currently or % of e-reader owners who want to read % of those interested in purchasing an
periodically read... other magazines and/or newspapers e-reader/tablet within 3 years, would
you expect to read ...?
% strongly agree/agree
76 93
100
Digital books Digital books
89 97
80
65 64
45 84
Digital magazines 60 Digital magazines
50 82
40
36 82
Digital newspapers 20 Digital newspapers
34 73
0
0 50 100 WW median US 0 50 100
WW median (%) WW median (%)
US US
Source: BCG e-reader survey (N=12,717, March 2010), BCG analysis
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9. Consumers are willing to pay relatively attractive prices for
content on e-readers/tablets
($)
20 Willingness to pay for a digital book on e-readers/tablets
17
15 13 13 13 13
12 12 12
10 9 Kindle book bestsellers: $9.99
10
6
5 4
8 7 3 2
7 7 7 7 7 7 5 6
3 3 2
0 1
Norway Italy Spain Austria Finland Germany France Australia US UK Japan Korea India China
($)
8 Willingness to pay for a single copy of digital magazine on e-readers/tablets
7
6 5 5 5 5
4 4 4
4 3 3 3 3 Newsweek Kindle: $1.99
2
2 4 3 1
3 3 3 3 2 3
2 2 1 1 1 1
0
Finland Italy Spain Japan Norway France US Australia Korea UK Germany Austria China India
($)
20 19
Willingness to pay for a monthly subscription to a digital newspaper on e-readers/tablets1
15 WSJ Kindle: $14.99
15 14 13 13 12 12 USA Today Kindle: $11.99
11 10
10 8
7
12 11
5
7 8 7 5 7 5 2 2
5 5 4
0 1 1
Spain Italy UK France Australia Germany Austria Japan US Norway Korea China India
1. The result of the Finland survey not included. Note: Among people who currently own e-readers or who are aware of e-readers and are interested in purchasing an e-reader within 3 year, `Van Westendorp's Price
Sensitivity Meter method was used to calculate the optimal price, Source: BCG e-reader survey (N=12,717, March 2010), company websites
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10. Besides digital publications, consumers interested in web
access, email and video on their e-readers/tablets
Majority of single-purpose e-reader owners
1
Web, email and video are key content for and potential users1 are interested in web,
multi-purpose tablets video and other entertainment
What other content would you expect to use What would drive you to increase the usage of e-
on your tablet? readers/tablets?
Of those interested in purchasing
Of those interested in purchasing
WW median Of e-reader single-purpose e-readers/tablets
multi-purpose tablets within 3 years
US owners (%2) within 3 years (%2)
(%)
84
Web browser 90 64 65
81 Enhanced web access
Email 86 64 71
73
Video (TV / movie) 74
60 59
65 Ability to purchase and
Music 65 watch videos (TV/movies) 62 66
56
User-generated content 60
62 57
61 Ability to play songs, video
Personal photo 58 games and other entertainment 51 68
43
Video game 45
WW median
E-readers/tablets will become first truly converged device
US
1. Those interested in purchasing e-readers within 3 years, 2. Strongly likely/likely (%)
Source: BCG e-reader survey (N=12,717, March 2010), BCG analysis
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11. Convenience is the major driver of e-reader/tablet usage
Marked preference for accessing content from multiple sources
The U.S. survey
Of those interested in reading digital books/magazines/newspapers on e-
readers/tablets, what is the primary reason?
Of those interested in purchasing e-
Of e-reader owners (%)
readers/tablets within 3 years (%)
28 16
Convenience of purchase 35 16
30 12
21 36
Not carrying around heavy print copies 13 23 21 26
18 15 23
Convenience of delivery 13 15 28
14 6
Price 20 11
17 6 9
ConvenienceEase of saving the content 5
11
10 8
4 2 Digital books
Screen quality of e-reader 5
1 2
2 3 9
12 Digital magazines
Better for the environment 8
17 Digital newspapers
2 3 1
Durability 5 3
0
What would drive you to increase the usage of e-readers/tablets? (%)
Strongly likely / likely (%) Strongly likely / likely (%)
Ability to purchase the content from different 91 83
retailers, not being committed to a single one
Greater selection of books, 72 84
newspapers, and/or newspapers
Consumers would favor the more "open" models
Source: BCG e-reader survey (N=12,717, March 2010), BCG analysis
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12. Summary of the survey methodology and sample
Description of survey
methodology Sample composition (N=12,717 in 14 countries)
BCG conducted a proprietary Sample distribution • All are web users
multi-country survey about e- 12,717
reader/tablet consumption • All are readers of print books,
US
978 US
magazines and/or newspapers
992 UK
The survey was conducted from
March 8 to 19, 2010, via the web 986 France • 50% men, 50% women
978 Italy
Research Now managed the Europe 983
• Located in all regions in each
Spain
online field work and survey country, except
process 989 Germany • Australia focusing on Melbourne and
697 Austria Sydney
697 Norway • S. Korea focusing on Seoul,
696 Incheon, Gyeonggi-do, Gwangju,
Finland
Busan, Daegu, Daejeon
988 Australia • China focusing on Beijing, Shanghai,
Guangzhou, Chengdu
Asia Pacific
982 Japan
• India focusing on New Delhi,
979 Korea Mumbai, Chennai, Bangalore
813 China
959 India
Source: BCG e-reader survey (N=12,717, March 2010)
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