Digital Textbooks An Abundant New Media Opportunity Kent Freeman VitalSource Technologies, Inc An Ingram Content Group Company

Helping Content…Reach Its Destination

3 Higher Education focus 1.5 million users 80+ publishers 80,000+ titles 17 languages 3-way access Vital Source

Current Market Situation: Accelerating Growth Accelerating Price Pressure Important Trends

Downward price pressure: Lack of rich media Lack of integration Poor quality presentation Page under glass Perception of cheaper creation Perception of cheaper acceptable options Important Trends

Sales Drivers/Price protectors: Multi-platform implementation Integrated No single device Online-Offline-Mobile Rich Media embedded Interactivity Sharing Important Trends

Table Stakes: Accessibility Scalability Ingestion/Conversion QA Delivery Functionality Basics Print Copy Important Trends

Experiencing Dramatic Growth Tripled active registered users 10X online usage 100X notes and highlights Mobile growth Significant institutional adoptions - US and non- US In the last 12 months Vital Source:

Sources: MBS, NACS, Simba Projected Market Growth

Our Growth in Users – 7 Years

Global Growth

Global Growth

Market - Global Growth - Online Usage 2011 Global Growth

What is an e-textbook ?

PRINT Portable Highlight Annotate Rich Media Search Share notes Bibliographic support Active quizzes Change font size Accessibility

16 Nearly every college student in the U.S. owns both a computer and a phone 80% own a laptop 3% own an e-reader 36% own two computers Two-thirds own Internet-capable handheld device eCar Study, 2010 Devices and Mobile

Vital Source 12-month online growth Importance of Scalability

Mobile Access Options - Cloud

Formats Matter

EPUB3 – The Accelerator

Interactive Learning Objects Enhanced eBooks Mobile Apps Rich Media Interactive Whiteboards VST Acquires VPG

FIGURE 2-3 Identifying instructional problems Accessibility

Thank you! Kent Freeman President, Vital Source