E-Book Rental ModelNick RuffiloTOC Frankfurt 2010

*Source: FeedFliks.com

*Source: FeedFliks.com

*Source: FeedFliks.com

~750k

~1.1M

~2M/1.25M

~2.5M/4.5M

~1.5M/7.5M

• ~9M based on sample size of FeedFliks.com Users

• Netflix has ~16M Subscribers

• Netflix spent $117M in the first 6 months of 2010 on streaming

Other Industries With Rental:• Movies• Video Games• Cars• Fashion Accessories• TV Shows (through iTunes)• Christmas Trees

• 49% of e-reader owners claim to buy more books

• 7% of e-reader owners claim to buy less

Source: L.E.K. Consulting

The Right of First Sales Doctrine

No Right of First Sale

Goal of Publishing:

Make a Profit

1 sale at $1,000=10 sales at $100=100 sales at $10=1,000 sales at $1=10,000 sales at $0.10

Cost Saving: Physical Inventory

Average 4 uses per copy amongst complete catalog

Rental Shifts the Long Tail

33% of rentals are from the bottom 80% of the catalog

Goal of Publishing:

Make a Profit

1 sale at $1,000=10 sales at $100=100 sales at $10=1,000 sales at $1=10,000 sales at $0.10