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The Academic Book Business

Emerging markets, technology opportunities, and trends in delivering content

21st May 2012

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Roger HortonCEO

Taylor & Francis

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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

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Academic Information Division

Revenues of £324m in 2011 (£153m books), Adj OP margin of 36%

Formed in 1798, floated 1998, merged with Informa 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 nichesOP

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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 Science Academic publisher with STM strengths

Global focus, global reach

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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

Academic Information

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The Global AI Business

10%9%

13%8% 4%

18%

20%

29% 3%5%

13%

14%

20%5%

4.5%

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011

Turnover £m

Turnover £m and growth

BooksJournalsTotal

% Growth

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Senior Management Team

Roger Horton

CEO

Emmett Dages

President US

Books

Jeremy North

Managing Director

HSS Books

Ian Bannerman

Managing Director UK

Journals

Kevin Bradley

President US

Journals

Stuart Dawson

COO

Christoph Chesher

Group Sales

Director

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Competing Publishers

AI - wide reach across fragmented market

AI - balanced, specialist, content levels

AI - quality books and journal content by subject, format and delivery

Publisher Student Learning

Research & Ref

Professional Crossover

HSS STM Books Journals

Taylor & Francis (AI) Wiley/Blackwell Springer OUP Sage Elsevier McGraw-Hill Pearson Cengage

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The Books Business

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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

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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

Books – Core Strengths

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Books Revenue by Geography

24%

8%

17%

51%UK

Europe

Rest of World

North America

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Book Revenue Growth by Key ROW Territory

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Japan India Singapore Middle East China

14.0%

32.0%

10.0%8.0%

15.0%

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Gro

wth

Rat

e

Market territory

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Acquisition Strategy

Bolt-on

Effective way of commissioning new

publishing

For example:

• Kogan Page Education (2003)

• David Fulton (2006)

• Productivity Press (2007)

• Architecture Press (2011)

• Earthscan (2011)

Value created by full integration, creation of scale and close management

Strategic

Strengthening of position in key subjects

or levels

Including:

• Routledge (1998)

• CRC Press (2003)

• Garland Science (1997)

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Jeremy NorthMD Books, HSS

Profile of the Books Business

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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

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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

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Marketing in a New World

Marketing Communications

Author Communities

Academic Gatekeepers

Mailing Databases

Print versus e-promotion

AI BOOKS

PUBLISHING

RE-

SELLER

END

CUSTOMER

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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

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Christoph Chesher Group Sales Director and President Asia Operations

Profile of Market and Sales Reach

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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

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Profile of e-Book Business

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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

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History of e-Book Sales

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2

4

6

8

10

12

14

16

18

20

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06

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07

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08

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09

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e-Book Revenue

£ (m’s) 2006 2011 Growth Growth%

Print 94,7 134,4 39,7 42%

Electronic 6,9 18,8 11,9 173%

£m

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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

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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

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Book Strategy and Outlook

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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

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Selling books that don’t come back, to customers that do

QUESTIONS