1. Market ResearchUnderstanding the ChildrensBook Consumer in the Digital AgeA focused look at activities, purchasing influences and behaviors of todays childrens book consumer Publishers Launch @ Digital Book World 2011 2012 Bowker All rights

2. Methodology Core questions about influences and activities Collaborative effort among all subscribers Proprietary questions for individual clients Fielded October 7, 2011 through November 2, 2011 2 Online Surveys: 0 to 12: N= 2000 (Parents/Guardians respond) 0 to 6: N = 1000 7 to 12: N = 1000 13 to 17: N = 1000 (Young Adult responds, with parental OK) At 95% confidence level, Margin of Error = +/- 3.1% for each segment of 1,000MarketResearch 2012 Bowker All rights reserved 3. Context: Key findings from first wave Books and reading are still very important The inner circle ruleslocal influencers much moreeffective than outside influencers Bookstores and libraries still VERY important in discovery The majority of childrens book purchases are impulsive Kids are omnivorous consumers of media Teens not universal adopters of digital technologytheypick and choose what is useful to them.MarketResearch 2012 Bowker All rights reserved 4. Who buys childrens books?67% are female62% are between the ages of 18 & 44They tend to be squarely middle class76% have attended college Market Research 2012 Bowker All rights reserved 5. They are. 5% more likely to play online games 6% more likely to work online 7% more likely to listen to digital music 8% more likely to read blogs 8% more likely to discuss books online 10% more likely to watch TV on a computerthan adult fiction buyers Market Research 2012 Bowker All rights reserved 6. Key Insights0-12 Purchase & Acquisition Market Research 2012 Bowker All rights 7. Children have big consumer powerWhere do you find out about titles for children 0-6? And 7 -12 Market Research 2012 Bowker All rights reserved 8. Children have big consumer powerFor the last book purchased for a child 0-6, how important are each of the following?MarketResearch 2012 Bowker All rights reserved 9. Reading level on a book is importantDo you like to see the reading level on a book you want to buy?100%90% 24% 20%80% 7%70% 10%60% No preference50% No40%73%Yes30% 66%20%10% 0% 0 to 67 to 12 Market Research 2012 Bowker All rights reserved 10. Consumers still value picture booksTo what extent do you agree or disagree: Picture books are important for young children Disagree Disagree stronglysomewhat 1%N/A Option1% 2%Neutral 17%Agree strongly44%Agree somewhat35% Market Research 2012 Bowker All rights reserved 11. Media & Technology Environment0-12 householdsRemember.todays kids are omnivorous with mediaMarketResearch 2012 Bowker All rights 12. Kids 7-12 still readingExtent to which their children 7-12 have done the following IN THE LAST WEEK Read a book for School - 77% Read a book for fun 61% Played on a gaming system 46% Surf web 36% Watch videos online 29% Read comic bk/graphic novel 21% Social network 20% Play games on tablet 13% Read on eReader 13% Read on tablet - 11% Market Research 2012 Bowker All rights reserved 13. Young Households are wiredand children are active users 2012 Bowker All rights reserved 14. Kids 7 12 not only use but now ownThey have a video game system 68%They share a computer with the rest of the family 61% They surf the web44% They have their own computer27% They own their own cell phone 25%They use my/our mobile device that we let them use20% They have an iTouch 12% They download apps to a mobile phone/device 11%They use an iPad 10%They own their own reading device like a Kindle or 7% They have an iPhone4% 0%10% 20%30% 40% 50% 60% 70%MarketResearch 2012 Bowker All rights reserved 15. E-books & the childrens marketWhat parentssay and whatkids thinkMarketResearch 2012 Bowker All rights 16. Q3 2011 Genre Share and eBook %sAdult Fiction26% Juvenile 11%Adult Non Fiction 15% Religion12% Young Adult 17%Christian Non-Fiction11%Science Fiction29%Christian Fiction 40%MarketResearch 2012 Bowker All rights reserved 17. 75% of parents have not yet bought an eBookOf those 56% are likely to begin reading eBooks soon7% Not at all likely, I will only buy/read print books and never read ebooks 44% Somewhat likely, I may read eBooks in the near future 49% Very likely, I am actively considering reading ebooks in the near future. Market Research 2012 Bowker All rights reserved 18. Parental attitudes What do parents prefer children read?100%90% 22%29%80% 6%70%5%60%No preference50%In ebook format40%72% In print30% 66%20%10% 0% 0 to 6% 7 -12% Market Research 2012 Bowker All rights reserved 19. Why arent your kids reading eBooks? Major reason Critical reason They dont yet have the device 26%35% Reading a print book helps them focus 38% 20% Less distraction from other content (links to video 34%23%Prefer the look and feel of print 36%18% Less costly30%19%Theyll read more 33%15%Easier to discover more titles on impulse (e.g., on a33%13%Theyve already got enought technology in their life29%16%Easier to swap books with their friends 29%15% More convenient 31% 11% 0% 10%20% 30% 40% 50% 60% Market Research 2012 Bowker All rights reserved 20. And why they might prefer an ebook Major/critical 7-12Major/critical 0-644%They think its fun and cool 35%43% Easier to carry around more titles37% 42%Theyre drawn to the technology37% 37% More convenient 33% 37%Theyll read more33% 34% Easier to find more titles theyll like 29% 34%Titles cost less 28% 31%They can try the content out before buying 26%25%Allows them to interact with other content 24%0%5%10% 15% 20% 25% 30% 35% 40% 45% 50%MarketResearch 2012 Bowker All rights reserved 21. What parents report for kidsDoes this reflect parental attitudes as much as kids preferences?50%46%40% 37% 30%30% 19%20% 22%20%12%10% 9% 2% 2%1% 1%0%They stronglyThey generally They have no They generally They strongly Dont knowprefer print books prefer print, books preference prefer ebooks prefer ebooksbut are open toebooks 0 to 6%7 -12% Market Research 2012 Bowker All rights reserved 22. The Teen Audience A new openness to eBooks?MarketResearch 2012 Bowker All rights 23. Context: What teens are doingIncidence of the following among young adults. Went online4%7%19% 69% Read a book required for school 7%23%32% 38%Read a book not required for school 21% 28%28%24%Read a print magazine or magazine 20%37%29% 15%Read comic books/graphic novels 57%23% 12%8%Read online newspapers/magazines 45%30% 17% 8% Read an e-book 70% 15%8%6%0%10%20%30% 40% 50% 60% 70%80% 90% 100% Not at allonce or twice fairly oftenvery often Market Research 2012 Bowker All rights reserved 24. Teens report tripling their reading rate of eBooks100% 6%90%19%80%70%60%50% Yes 94%40%81%No30%20%10% 0%Market2010 2011Research 2012 Bowker All rights reserved 25. Role of Books compared to other media Teens are valuing books more does increased use of eBooks have a part here? 100% 90% 17%23% 80% 70% 60% 40%44% More important role 50%About the same 40%Less important Role 30% 20% 43%33% 10%0% 20102011Market Research 2012 Bowker All rights reserved 26. The hand-me-down factorA majority of teens (60%) report getting technology devices as hand-me-downs Yes - Always5%Yes - Most ofthe time 14%No - Never 40% Yes - Occasionally41% Market Research 2012 Bowker All rights reserved 27. Apple is the format of choiceWhat devices do you have or are you considering buying?iTouch28% 17% 56% iPhone 17% 32%51%iPad13% 37%50% Netbook12% 17%71%Kindle (original or DX)6% 15% 79% Kindle Touch4% 18% 78% Other e-book reader 4%12%84% Nook4%13%84% Nook Color3% 15% 82% Kindle Fire2% 19%79%0%10% 20%30%40% 50%60% 70% 80% 90% 100%Currently own or haveConsidering a purchase/acquisitionNo interest in purchasing Market Research 2012 Bowker All rights reserved 28. MarketResearch 2012 Bowker All rights reserved 29. MarketResearch 2012 Bowker All rights reserved 30. Some things weve learned Kids a very clear consumer force Picture books still an important format Parents and children very close not a big technology gap Screen size & price are limiting factors for e-book adoption Kids may be more interested in reading digital then parents Parents concerned with kids focus re: digital versus print Teens growing in acceptance toward e-book adoption Privacy and DRM concerns are on the rise for teens Apple products very aspirationalMarketResearch 2012 Bowker All rights reserved 31. Market Research Thanks!Kelly Gallagher Kristen McLeanVice President, Market Research Founder & CEOBowkerBookigee, Inc.Kelly.Gallagher@Bowker.comKristen@bookigee.com 2012 Bowker All rights