BEA2014 -Understanding the Global Book Market & How it will Change

Jonathan Nowell
BookExpo America
28 May 2014
UNDERSTANDING THE
GLOBAL BOOK MARKET
AND HOW IT WILL CHANGE
Booth
1113

Copyright©2013TheNielsenCompany.Confidentialandproprietary.
2
AGENDA
• DATA SOURCES
• INTERNATIONAL CONTEXT
• PRINT TRENDS (YEAR-TO-DATE DATA TO 19th APRIL 2014)
• E-BOOKS IN THE US
• E-BOOKS IN THE UK (DATA TO 19th JANUARY 2014)
• THOUGHTS ABOUT THE FUTURE

3
• Nielsen’s BookScan
• EPOS sales data supplied by retailers in 10 countries worldwide
• Nielsen’s Books & Consumers US survey
• Survey of 6,000 book buyers per month, selected from a nationally
representative sample by age, gender, location
• Online questionnaire of ~75 questions
• Nielsen Insight into the UK E-book Consumer Market: May 2014
• Data from Kantar panel of 15,000 13-79 year olds, nationally representative
of the UK population
• Online questionnaire collecting monthly book buying data
MAIN DATA SOURCES

5
CONSUMER
CONFIDENCE
TO Q1-2014
Asia-Pac lead
the way
Russia
Brazil
US
Northern
Europe
Southern
Europe and
France

6
0
20
40
60
80
100
120
140
160
121
106
100 100
89 87
82 82
61
45
Global average 96
Q1 2014 Nielsen Consumer Confidence Index
CONSUMER CONFIDENCE INDEX
Base : All respondents n=31972
Nielsen Global Survey of Consumer Confidence & Spending Intentions

7
BOOKSCAN’S TEN INTERNATIONAL TERRITORIES
A combined total of over 1 billion print book sales measured in 2013

8
?
-6.4% -1.1%
-4.4%-6.7%
-10.2%
1.1%
0.03%
9.5%
-9.6%
BOOKSCAN’S TEN INTERNATIONAL TERRITORIES
As of April, three territories showing year to date growth in print book volume sales

9
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0%
Adult Fiction
Non-Fiction
Children's
Total ES
IT
ROI
UK
EUROPEAN GENRE PERFORMANCE, 2014YTD VS
2013YTD
Nielsen BookScan

10
-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%
Adult Fiction
Non-Fiction
Children's
Total SA
IND
NZ
AUS
US
INTERNATIONAL GENRE PERFORMANCE, 2014YTD VS
2013YTD
Nielsen BookScan

11
Volume 2014YTD
41%
29%
26%
4%
F
T
S
Y
BRAZIL BY PRODUCT CLASS
28%
27%
41%
4%
F
T
S
Y
Value 2014YTD
Nielsen BookScan
23%
18%
8%T6
Religion
5%
F2
Y2
Y5
T6
T17
S5
S4
F1
T4
T1
S2
S1
T9
T2
T5
Volume 2014YTD by mid-level product class
Volume YTD: 12 million
Value YTD: R$500 million
Avg. Weekly Sales 2014:
752k, R$31million

12
BRAZIL TOP 20 JULY 2013-APRIL 2014
Nielsen BookScan
Pos Title Author Publisher ASP
1 Kairos: O Tempo De Deus Rossi, Padre Marcelo Globo Livros R$16.54
2
Nada A Perder: Meus Desafios Diante
Do Impossivel - Livro 2
Macedo, Edir Editora Planeta do Brasil R$27.48
3 A Culpa E Das Estrelas Green, John Intrinseca R$27.44
4 Inferno Brown, Dan Editora Sextante R$34.75
5 Destrua Este Diario Smith, Keri Intrinseca R$23.12
6 Cinquenta Tons De Cinza James, E.L. Intrinseca R$24.24
7 1889 Gomes, Laurentino Globo Livros R$38.49
8
Livro - Dona Benta: Comer Bem - Edicao
Especial Completa
Nacional, Editora IBEP R$20.07
9 Cidades De Papel Green, John Intrinseca R$27.14
10 Silencio Das Montanhas, O Hosseini, Khaled Globo Livros R$34.00
11 Cinquenta Tons De Liberdade James, E.L. Intrinseca R$23.90
12 Teorema Katherine, O Green, John Intrinseca R$27.27
13 Cinquenta Tons Mais Escuros James, E.L. Intrinseca R$24.05
14 Pequeno Principe, O Saint-Exupery, Antoine Ediouro Livros R$19.61
15 Casa de Hades, A Riordan, Rick Intrinseca R$35.24
16 Lado Bom Da Vida, O Quick, Matthew Intrinseca R$22.46
17 Casamento Blindado Cardoso, Renato & Cristiane Ediouro Livros R$23.53
18 Eu Nao Consigo Emagrecer Dukan, Pierre Editorial Record R$27.49
19 Quem E Voce Alasca? Green, John WMF Martins Fontes R$28.36
20 Ladrao De Raios, O – Vol 1 Riordan, Rick Intrinseca R$23.51

14
Australia Volume Sales
0
2
4
6
8
10
12
14
16
Adult Fiction Trade Non-Fiction Specialist Non-Fiction Children's Total
Millions
2012YTD
2013YTD
2014YTD
AUSTRALIA – RECENT TRENDS
Fiction only broad genre in decline
Nielsen BookScan

15
India Volume Sales
0
1
2
3
4
5
6
Adult Fiction Trade Non-Fiction Specialist Non-Fiction Children's Total
Millions
2012YTD
2013YTD
2014YTD
INDIA – RECENT TRENDS
Specialist Non-Fiction leads growth
Nielsen BookScan

16
TCM Value Sales
£0
£50
£100
£150
£200
£250
£300
£350
£400
£450
£500
2005YTD 2006YTD 2007YTD 2008YTD 2009YTD 2010YTD 2011YTD 2012YTD 2013YTD 2014YTD
MillionsUK LONGER TERM TRENDS
Year-on-year decline in TCM slowing so far in 2014
Nielsen BookScan
-1.4%

17
2014 UK BESTSELLERS
Nielsen BookScan
2014YTD
2013YTD

18
Adult Fiction TCM Sales
£0
£20
£40
£60
£80
£100
£120
£140
Millions
UK LONGER TERM SECTOR TRENDS
Adult Trade Non-Fiction TCM Sales
Nielsen BookScan
£0
£50
£100
£150
£200
£250
Millions
-6.3%
-4.1%

19
FOOD & DRINK LEADS YEAR-ON-YEAR DECLINE IN
TRADE NON-FICTION AT -15.1%
But Biographies with Atlas, Maps & Travel are leading the long term decline
£0
£20
£40
£60
£80
£100
£120
£140
£160
£180
£200
2009YTD 2010YTD 2011YTD 2012YTD 2013YTD 2014YTD
£18 £19 £24 £19 £21 £18
£25 £22
£21
£19 £17
£17
£18 £17
£17
£17 £16
£16
£24
£19
£20
£18 £16
£16
£15
£14
£14
£14 £13
£13
Millions
T18 Fiction Related Items
T2 Dictionaries & Reference
T7 Politics & Government
T10 Mind, Body & Spirit
T12 Transport
T15 Sport
T13 Humour, Trivia & Puzzles
T6 Religion
T3 Literature, Poetry & Criticism
T17 Personal Development
T8 The World / Ideas / Culture: General Interest
T9 Family, Health & Relationships
T11 Leisure & Lifestyle
T5 History & Military
T4 Biographies & Autobiographies
T1 The Arts
T14 Atlases, Maps & Travel
T16 Food & Drink

20
Adult Specialist Non-Fiction TCM Sales
£0
£10
£20
£30
£40
£50
£60
£70
Millions
UK LONGER TERM SECTOR TRENDS
Children’s (Ex. Y5) TCM Sales
Nielsen BookScan
£0
£10
£20
£30
£40
£50
£60
£70
£80
Millions
-1.3%
+8.7%

21
US Volume Sales
0
50
100
150
200
250
Millions
US LONGER TERM TRENDS
Includes Walmart sales as of 2013
Nielsen BookScan
+0.03%

22
US Volume Sales by Product Class 2013YTD
42%
25%
26%
7% Adult Non-Fiction
Juvenile Fiction
Adult Fiction
Juvenile Non-
Fiction
US MARKET BY GENRE
Juvenile Fiction sales have overtaken Adult Fiction in 2014 so far
41%
28%
23%
8% Adult Non-Fiction
Juvenile Fiction
Adult Fiction
Juvenile Non-
Fiction
US Volume Sales by Product Class 2014YTD
Nielsen BookScan

23
2014 US BESTSELLERS DOMINATED BY JUVENILE
FICTION
Nielsen BookScan
2014YTD
2013YTD

24
US Volume Sales
0
10
20
30
40
50
60
70
Adult Non-Fiction Juvenile Fiction Adult Fiction Juvenile Non-Fiction
Millions
Backlist
Current
US MARKET BY PUBLICATION DATE
Adult Fiction is the only category that skews toward newer releases
Nielsen BookScan

25
US Volume Sales by Publisher
0
10
20
30
40
50
60
Millions
2013YTD
2014YTD
TOP 10 US PUBLISHERS IN 2014 SO FAR
Four of the top publishers in growth on 2013
Nielsen BookScan
+3.1%
+12.2%
+8.8% +8.4%

26
US Volume Sales – Adult Fiction
0
10
20
30
40
50
60
70
Millions
US LONGER TERM SECTOR TRENDS
Nielsen BookScan
-13.1%

27
2014 US FICTION BESTSELLERS
Nielsen BookScan
2014YTD
2013YTD

28
US Volume Sales – Adult Fiction
0
2
4
6
8
10
12
Millions
2013YTD
2014YTD
US ADULT FICTION BY CATEGORY
Graphic Novels and Westerns are the only categories in growth
Nielsen BookScan

29
Percent Growth in Volume Sales
GRAPHIC NOVELS SEE INTERNATIONAL GROWTH
Eight out of ten territories have increased sales so far in 2014
Nielsen BookScan
0% 10% 20% 30% 40%
ES
IN
US
ROI
UK
AUS
IT
NZ

30
US Volume Sales – General Fiction
-35.1%
+11.1%
-13.7%
+42.8%
+14.1%
Literary
Historical
General
Contemporary Women
Short Stories (single author)
Sagas
Humorous
Family Life
Coming of Age
Erotica
African American / Urban
Media Tie-In
Anthologies (multiple authors)
Urban
African American / Contemporary Women
Biographical
Political
Gay
Alternative History
Dystopian
Native American & Aboriginal
African American / General
African American / Historical
Mashups
Amish & Mennonite
Cultural Heritage
Lesbian
Sports
Holidays
African American / Erotica
Satire
Sea Stories
US GENERAL FICTION BY BISAC DESCRIPTION
Literary and Historical account for almost half of General Fiction sales 2014YTD
Nielsen BookScan

31
US Volume Sales – Adult Non-Fiction
0
10
20
30
40
50
60
70
80
90
100
Millions
Nielsen BookScan
-1.3%

32
2014 US NON-FICTION BESTSELLERS
Nielsen BookScan
2014YTD
2013YTD

33
US Volume Sales – Adult Non-Fiction
0
2
4
6
8
10
12
Millions
2013YTD
2014YTD
US ADULT NON-FICTION BY CATEGORY
Already a top category, Religion/Bibles grew 8.3% on 2013YTD
Nielsen BookScan

34
US Volume Sales – Religion/Bibles
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Millions
2013YTD
2014YTD
TOP IMPRINTS IN RELIGION/BIBLES
Thomas Nelson up 34% year-on-year; only two imprints of top ten in decline
Nielsen BookScan

35
Percent Growth in US Volume Sales – Self-Help
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Personal Growth / General
Personal Growth / Success
Motivational & Inspirational
Creativity
Personal Growth / Happiness
General
Personal Growth / Self-Esteem
Spiritual
Sexual Instruction
Mood Disorders / General
GROWTH IN SELF-HELP BOOKS
More than half of top categories up on 2013
Nielsen BookScan

36
US Volume Sales – All Juvenile
0
10
20
30
40
50
60
70
Millions
Nielsen BookScan
+11.9%

37
YTD Volume Sales in Y Children’s, Young Adult & Educational/All Juvenile (US)
0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000
US
UK
AUS
IN
ROI
2014YTD
2013YTD
GROWTH IN INTERNATIONAL CHILDREN’S MARKET
Five territories up year-on-year in Children’s sector
Nielsen BookScan

38
US Volume Sales – Juvenile Fiction
0
5
10
15
20
25
30
35
40
45
50
2011YTD 2012YTD 2013YTD 2014YTD
Millions
Holidays/Festivals/Religion
Concepts
Animals
Classics
History/Sports/People/Places
Social Situations/Family/Health
Science Fiction/Fantasy/Magic
General
US JUVENILE FICTION BY CATEGORY
Science Fiction/Fantasy/Magic up 47% on 2013
Nielsen BookScan

40
US Volume Sales – All Juvenile
0
0.5
1
1.5
2
2.5
3
Millions
2013YTD
2014YTD
DIVERGENT CARRIES VERONICA ROTH TO TOP
AUTHOR IN JUVENILE FICTION
New entries in top ten for 2014: Roth, Green, Riggs, Zusak
Nielsen BookScan

42
0
5
10
15
20
25
30
35
40
45
50
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Jan-14
%
Volume
Value
E-BOOK SHARE OF US BOOK PURCHASES
Source: US Books & Consumers © Nielsen 2014 2014 data provisional and require caution

43
0
10
20
30
40
50
60
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Jan-14
%
Adult fiction
Adult NF
Children's
E-BOOK SHARE OF US BOOK PURCHASES,
WITHIN CATEGORY: VOLUME
Source: US Books & Consumers © Nielsen 2014 2014 data provisional and require caution

44
E-BOOK SHARE OF US BOOK PURCHASES WITHIN GENRE:
VOLUME, Y/E JAN 2014
Source: US Books & Consumers © Nielsen 2014
35%+
Crime
SF
Romance
25-34%
Thriller
General fiction
Historical fiction
Fantasy
Horror
Action/adventure
Christian fiction
Children’s fiction
True crime
10-24%
Biography
Fitness/health
Religion/MBS
Sport
Humour
IT/business
YA fiction
Literary fiction
History
Travel
Cookery
Self help
Art
Children’s NF
<10%
Graphic novel
Bibles
Science/nature
Home/garden
Picture books
Early learning

45
44%
70%
5%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Jan-14
Smartphone
Tablet
eReader
HOUSEHOLD OWNERSHIP AMONG US BOOK BUYERS

46
68
35
42
4
7
0
10
20
30
40
50
60
70
80
90
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Jan-14
%
eReader
Tablet
SmartPhone
DEVICE SHARE OF US E-BOOK PURCHASES

48
Cumulative Volume sales of e-books among the UK population aged 13-79
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
23-Jan-11
20-Feb-11
20-Mar-11
17-Apr-11
15-May-11
12-Jun-11
10-Jul-11
07-Aug-11
04-Sep-11
02-Oct-11
30-Oct-11
27-Nov-11
25-Dec-11
22-Jan-12
19-Feb-12
18-Mar-12
15-Apr-12
13-May-12
10-Jun-12
08-Jul-12
05-Aug-12
02-Sep-12
30-Sep-12
28-Oct-12
25-Nov-12
23-Dec-12
20-Jan-13
17-Feb-13
17-Mar-13
14-Apr-13
13-May-13
09-Jun-13
07-Jul-13
04-Aug-13
01-Sep-13
29-Sep-13
27-Oct-13
24-Nov-13
22-Dec-13
19-Jan-14
125.1m
Fiction Non-fiction Children's
GROWTH AND COMPOSITION OF UK E-BOOK
MARKET, JAN 2011- JAN 2014
Nielsen Insight into the E-book Consumer Market

50
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
23-Jan-11
20-Feb-11
20-Mar-11
17-Apr-11
15-May-11
12-Jun-11
10-Jul-11
07-Aug-11
04-Sep-11
02-Oct-11
30-Oct-11
27-Nov-11
25-Dec-11
22-Jan-12
19-Feb-12
18-Mar-12
15-Apr-12
13-May-12
10-Jun-12
08-Jul-12
05-Aug-12
02-Sep-12
30-Sep-12
28-Oct-12
25-Nov-12
23-Dec-12
20-Jan-13
17-Feb-13
17-Mar-13
14-Apr-13
13-May-13
09-Jun-13
07-Jul-13
04-Aug-13
01-Sep-13
29-Sep-13
27-Oct-13
24-Nov-13
22-Dec-13
19-Jan-14
UK MARKET PENETRATION OF E-BOOKS
Percentage of the UK population aged 13-79 that have bought an e-book: Jan 2011-
2014
22%
Nielsen Insight into the E-book Consumer Market: May 2014

51
Numbers of individuals aged 13-79 entering the e-book market: period-on-period growth in population number terms
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan11
Feb11
Mar11
Apr11
May11
Jun11
Jul11
Aug11
Sep11
Oct11(1)
Oct11(2)
Nov11
Dec11
Jan12
Feb12
Mar12
Apr12
May12
Jun12
Jul12
Aug12
Sep12(1)
Sep12(2)
Oct12
Nov12
Dec12
Jan13
Feb13
Mar13
Apr13
May13
Jun13
Jul13
Aug13
Sep13(1)
Sep13(2)
Oct13
Nov13
Dec13
Jan14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep14(1)
Sep14(2)
Oct-14
Nov-14
Dec-14
Jan-15
New buyers projected to fall below 100k throughout 2014
Nielsen Insight into the E-book Consumer Market: May 2014
Forecasted E-book Adoption
GROWTH IN E-BOOK BUYERS SLOWING

52
0
5
10
15
20
25
30
35
40
45
50
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Jan-14
%
Volume
Value
E-BOOK SHARE OF UK BOOK PURCHASES
Source: UK Books & Consumers © Nielsen 2014 2014 data provisional and require caution

53
0
10
20
30
40
50
60
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Jan-14
%
Adult fiction
Adult NF
Children's
E-BOOK SHARE OF UK BOOK PURCHASES,
WITHIN CATEGORY: VOLUME
Source: UK Books & Consumers © Nielsen 2014 2014 data provisional and require caution

54
E-BOOK SHARE OF UK BOOK PURCHASES WITHIN GENRE:
VOLUME, Y/E JAN 2014
Source: UK Books & Consumers © Nielsen 2014
45%+
Crime
Fantasy
Romance
25-44%
Thriller
General fiction
Historical fiction
Erotic fiction
Horror
Classic fiction
Sci fi
True crime
Self help
10-24%
Biography
Fitness/diet
Religion/MBS
Sport
Humour
IT
YA fiction
<10%
Graphic novel
Food & drink
Science/nature
Travel
Art
Business
Home/garden
Picture books
Children’s NF
Early learning

55
46
61
14
51
21
24
0
10
20
30
40
50
60
70
80
90
100
%
Smartphone
Tablet
eReader
HOUSEHOLD OWNERSHIP AMONG UK BOOK BUYERS

56
84
47
40
5
8
0
10
20
30
40
50
60
70
80
90
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Jan-14
%
eReader
Tablet
SmartPhone
DEVICE SHARE OF UK E-BOOK PURCHASES

58
CHANGING FACE OF THE AMERICAN CONSUMER
With important implications on the future …
URBANIZATION &
INDUSTRIALIZATION
DECLINING BIRTH
RATES
AGING POPULATION
Uneven Population
Growth
Older Consumers
With New Needs
Changes in Per
Household
Spending
Immigration &
Growth in
Ethnic Families
Declining % of
HHs with
Children

59
KEY ATTRIBUTES OF TWO SPENDING POWERHOUSES
Hardwired Untethered
By Appointment Always On
Listeners Sharers
Physical Virtual
BOOMERS MILLENNIALS

61
DO YOU KNOW YOUR CATEGORY’S ENTHUSIAST?
Source: FreshFacts® Shopper Insights powered by Spire, 52 weeks ending 8/10/13
1%
of muffin buyers
23%
of muffin sales
account for

62
DO YOU KNOW YOUR BOOK ENTHUSIAST?
Source: FreshFacts® Shopper Insights powered by Spire, 52 weeks ending 8/10/13
1%
of book buyers
15%
of book sales
account for

63
THE WORLD IS YOUR OYSTER
Source: BBC
• 2.0bn people
learning
English
• 600m as first
language

64
Our brains process 11,000,000 bits of sensory information every second.
But our conscious minds can only handle about 40 bits per second.
That’s a selection ratio of 0.000004%.
What happens to the other 10,999,960 bits of information?
Consumer brains process them subconsciously.
The majority of processing is subconscious

65
TWO THINGS WE HAVE LEARNED FROM
NEUROSCIENCE
Milliseconds matter
We make decisions differently than we thought

66
If this is true,
our goal is to
persuade.
TRADITIONAL VIEW
THINK
ACT
FEEL
If this is true,
our goal is to
engage emotion.
EMERGING VIEW
(FROM COGNITIVE SCIENCE)
FEEL
ACT
THINK
Rationalize Our
Decisions
EMOTIONS LEAD, REASON FOLLOWS

68
SUMMARY – OPTIMISTIC!!
• Global consumer confidence is patchy but improving
• English language markets are huge and digital makes them
reachable
• Traditional book markets are flat – some in decline
• Emerging markets are growing fast
• ebooks will continue to grow – but pace will be wildly
different in each market
• Consumer $ is moving from boomer to millennial – maximise
boomer spend now!
• We will need to publish and sell books differently … as we
compete for consumer time and $ …

Jonathan Nowell
BookExpo America
28 May 2014
Booth
1113
jonathan.nowell@nielsen.com
jonathan.stolper@nielsen.com
charlie.friscia@nielsen.com

BEA2014 -Understanding the Global Book Market & How it will Change

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