NPD REPORTS THAT eBOOKS MAY BE AHEAD OF THEIR TIME

Port Washington, New York, May 31, 2001 - Are consumers ready for digital books? At the BookExpo America in Chicago, leading market researchers Ipsos-NPD and The NPD Group reported that although two-thirds of online users have heard of eBooks and close to half are interested in the concept, only about one in four are likely to buy one.

Barrie Rappaport, sr. account executive for Ipsos-NPD BookTrends^SM, said, "In a way, eBooks are a generation ahead of their time. Most online users are just not yet ready to give up the feel of a book in their hands. However, for today’s youth who’ve grown up on computer games, ‘reading’ electronically will become second nature, thus providing the eBooks market of the future."

Today’s consumers are not prepared to spend much on eBooks. An Ipsos-NPD/NPD e-Visory® report found that 77% of consumers think that digital books should cost less than either hardcovers or paperbacks. Rappaport went on to say, "More troubling in the short term is the perception that online services should not cost much. Potential eBooks readers feel that the cost savings to publishers in paper, printing and distribution should be passed directly to the end-user. They don’t see the infrastructure that goes into handling the vast volume of digital content."

While it may take another generation before digital material is considered a "good read," people certainly are willing to purchase print books via the Internet. The Ipsos-NPD/NPD e-Visory Report shows that among those who have bought goods and services online, more than half (55%) have purchased a book. This is good news for online book vendors like Amazon and Barnes & Noble. According to Ipsos-NPD BookTrends, the percentage of books bought online reached 7% in 2000 -- up from 5% in 1999.

For people who have been "surfing the Net" for over two years, books were most often the very first online purchase they made (26%). However, newer Internet users were more likely to buy clothing or accessories first. (Fourteen percent of new users’ first purchases were books.) "Early Internet explorers were more highly educated with above average incomes. They flocked to books because there was little else available and books were considered a safe expenditure to test the online-purchasing waters. Today, online users are increasingly comfortable with transaction security. In addition, other merchandise has become well-suited to the Internet, particularly categories (like music) also sold via mail-order catalogs and in brick and mortar locations," according to Rappaport.

NPD e-Visory reports offer a comprehensive view of the Internet retailing marketplace with emphasis on the industries NPD covers. Each report offers detailed information on online shopper/buyer demographics, attitudes, and behavior as reported by NPD Online Research.