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1. The new age of Digital Publishing Glen HopkinsVice President and General ManagerImaging and Printing Group, HP O’Reilly Tools of Change | February 2010

2. Explosion of information touch points

3. Worldwide page opportunity 10%will be digitallyprinted 56T pageswill be printedin 2012 200+ billion pagestip to digital annually

4. Market dynamics and printing ecosystems Analog to Digital Transformation Marketdynamics Explosion of Printable Content and Color output Mobility and Wireless Printing Growth of Services Based Models $27B $90B $121B $30B WW 2012market1 1HP internal analysis

5. Publishing Industry The world has gone digital. Publishers determined to follow. 5Confidential Publishing Trends • Publishing – a multi-billion dollar global industry – is searching for a digital on-ramp to the Information Superhighway • Internally, publishers have gone digital. Books, magazines and newspapers are created digitally • computers replaced typewriters • pages constructed on monitors • cameras take digital images

6. Traditional Print Process Content providers have little flexibility to change the output. 6 Confidential Though content creation is digital, printing remains mostly analog. • Start up costs diminish only with large runs of content • content is selected and locked to format early in process • Every copy is identical • Personalization is not possible

7. Distribution and Delivery Analog copies are delivered to stores & front steps. 7Confidential • Publications distributed by truck • networks of distribution centers • warehouses full of books • unpredictable market demand for unsold titles and copies creates waste • Delivery done by hand • newspapers to the doorstep • magazines and books in the mail • books sit on store shelf until interested customer comes along

8. Digital Delivery Leapfrogs Analog Transmission of content can be immediate, effective and efficient. 8 Confidential • HP digital publishing systems can leapfrog analog and deliver directly to the home, a PSP, a retail location or a warehouse • content may remain digital from creation to delivery – from start to finish • digitization enables • customization • reduce cost and waste

9. Customers Take Control and “Pull” Digital broadens availability while focusing audiences. 9 Confidential • What they want • Hard-to-find content becomes easy to find • When they want it • Offering both immediate and scheduled content • How they want it

10. I want to Mash-up my content withmy favorite licensed content… $35 billionIn printable licensedmerchandise is soldin retail today

11. I want to print from my mobile device At home, on campus, in a café, at the library… HP will offer printing from75% of mobile devicesby the end of 2010 iPrint Photo App600,000downloads 85%of smart phone ownerswant to print HP/RIM CloudPrint84% of pilot userssay they will continueusing it World’s first web-connected printer

12. Extend digital content creation and publishing platform Centralized digital library Build vertical - deliver horizontal Make it easier to find, assemble, order, print and distribute Print to Order True Global Network Deliver next-generation digital printing platforms Without comprise in quality or economics HP – The Vision 12 Confidential

13. Mass digitalization of content now seen as strategic • Operational Improvement and cost reductions in the supply chain • Fiscal impact of move to micro/virtual inventory model increasingly compelling • Technology and Intelligent Infrastructures • Environmental issues • Improvements in digital printing and finishing technologies Opportunities 13 Confidential

14. The Pain Point Millions of books that people want are not readily available. ~20% Public Domain 4% In Print ~75% or more The Twilight Zone 90 MillionBooks NOT In Print 14 Confidential

15. High up-front investment at significant risk Eighty percent of titles will lose money for publishers Long Tail Book Formatting Economics High risk business model. Formatting Scanning Sales Fulfillment Book Stores Print to Order Book scanning (i.e. Google, IA, libraries) 15 Confidential

16. BookPrep as a Web Service BookPrep 1 2 3 4 5 • Raw Book Files • Scan book pages • Publishing metadata • Publisher • Book • Digitized Book • BookPrep • Designed to scale • Prepare for PoD • Image Processing • Interactive Tools • Print-On-Demand • PoD ready files • Uploaded to PSP • Consumer • Printed to order • Personalized 16 Confidential

17. Examples of Original Digitized Pages • Challenges: • - Identify page / content boundaries • - Crop • - De-skew • - Color and illumination correction • - Text sharpening 17 Confidential

18. Mash-up: Underlying Magic / Technology Chapters or subchapters New Book Book Other content Original content is scanned, “chunked” and tagged Smart user interface guides selection of appropriate chunked sections to recombine into new book New layouts / designs for mashup output a future capability 18 Confidential

19. Make a “Mash-up” Book Mashup Book Gather and bind information from different sources. 19 Confidential Gardening and cookbooks Travel books with maps, restaurant pages, coupons Textbooks assembled from multiple sources Personal and Professional content

20. The Traditional Publishing Industry Today 35% of all hard covers come back to be pulped 55% of all soft covers come back to be pulped 20 Confidential

21. Breakthrough Digital Print Technologies • Two complementary print platforms serving two major sensitivities of quality and economics for digital book manufacturing • Indigo platform delivers quality and media flexibility with excellent digital economics and productivity • IHPS (Inkjet) platform delivers digital economics and productivity with excellent quality for high volume production requirements • Print and workflow automation • Total cost of ownership • Increased business and customer value • Print to Order • Environmental 21 Confidential

22. Books: Print To Order No more out of print; No more out of stock. • New Business Model • Never miss a sale • No inventory, handling or warehouse costs • 24 hour availability • Allows for customization 22 Confidential

23. Print To Order can help reduce carbon footprint of printing • Economics that allow cost effective short runs – printing what you need, when and where you need it • more customized and targeted content, allowing the same result to be achieved with less printed material • drastically reduced printing process WASTE • reduced print Transportation from printing less and the potential to print closer to the end user Potential to reduce carbon foot print by 30% A better choicefor the environment 23 Confidential

24. The new age of publishing… Digital Anytime Anywhere 24