1

BookTrack Australia- helping tighten the publishing supply chain

2

> AdRem, C-2-C, JIS etc all show that oversupply ‘clogs’ the supply chain

> Output increasing - over 2m books in print and over 100,000 new ‘commercial’ titles per annum

> Even a small bookseller stocks more product lines than the average supermarket

> Average product life is now below 12 weeks

> Little research into who buys what, when, why and from where

> Generally accepted that a tightened supply chainis essential

Some of the issues ...

3

>Marketing effort and distribution efficiencies are wasted while returns are high

> Reduced returns = increased profitability = industry survival

> EPOS was considered a major breakthrough in returns management but it is proving to be a double edged sword

> EPOS manages stock but itself doesn’t necessarily reduce returns

Returns inhibit profitability ...

4

The EPOS dilemma ...

> Evidence suggests that 2nd/3rd generation systems make retailers more introverted

> EPOS tells booksellers what they are doing well, not what they are doing badly

> Industry efficiency won’t increase if information technology is limited to in-house use

> Need to reference EPOS data against total market performance

5

Referencing to total market ...

> Quality decision making can only be assessed against whole market performance

> Understanding seasonality and author sales performance lets retailers measure themselves externally as well as internally

> Internal measuring can be deceptive

- 300% increase in category sales is poor if market increase is 400%

- Under ordering isn’t the answer… 3 in, 3 sold, no residual stock, no returns is not good bookselling if the book’s a runaway success

6

Measuring against the market ...

> Sales tracking across the whole market forces the supply chain to be reactive

> Booksellers don’t want to take big advanced orders

> Better to take smaller first stock and restock once sales shape ( their own and the whole market) is understood

> Over a product life cycle this may have little effect on publisher revenues, but it lowers administration, reprint, returns costs

> Sales tracking allows the supply chain to better match customer demand

7

BookTrack sales tracking service ...> BookTrack is the only continuous electronic

sales monitoring service for books across the whole market

> Operating within UK since 1996 with over 4600 stores contributing sales data and is now established as the authoritative source of book information in the UK

> BookTrack Australia is a joint venture between ACNielsen in Australia and J Whitaker & Sons in the UK

8

The BookTrack process ...

> Each participating bookseller, reports daily or weekly via their EPOS systems to the UK:ISBNQuantity purchasedPrice paidDate of sale

> Information is matched against bibliographic databases by ISBN

> Delivered as weekly title rankings and 4 weekly reports to clients by Friday, following the Saturday of the previous week’s reporting period

9

Australian Book Industry

Internet

Book club /mail order

Supermarkets

Education

Newsagents

Specialists (non trade)

Publisher (direct to the consumer)

Initially BookTrack

will measure this group

Dept stores

Independents

Discounters

Book chains

Estimated total value = $900m-$1b

10

Australian Book Industry

Dept stores

Independents

Discounters

Book chains

ALP-1 ALP-2+= ALP-3+

BookTrack panel development

will occur in phases

(ALP = Australia Launch Panel)

11

Australia Launch Panel 3

(May/June 2002)

Australia Launch Panel 2 (late 2001)

Australia Launch Panel 1

(Jan - Dec 2001)

- Collins all corporate + franchise selection - Angus & Robertson all corporate + franchise selection- Dymocks- Myer Grace- KMart- BigW- Borders- David Jones- ABC- a sample of general Independents

includes :- A&R franchise - Collins franchise- Target- Borders- WHSmith- additional general independents- ACBA sample (trade sales)

includes :- University Co-operative (trade sales)- ACBA- plus additional booksellers who were not technically able in ALP2, eg BookCity, QBD

Building the Australian panel ...

BookTrack reports Total Australia only.Individual retailer information

is not identified.

12

Australia Launch Panel - 1

> First report in Dec 2000

> Estimated coverage = 50-60% of book retail trade

> represented sales from approximately 700 outlets approximately $7.5 million sales per week 400,000 unit sales per week- 37,000 different titles measured each

week

> ALP 2 to cover 85-90% of retail market

> Data is NEVER retailer identified

13

ALP-1 Market Movement - Value $

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

4 wk Dec 30 4 wk Jan 27 4 wk Feb 24

$75.3m

$32.8m $36.1m

14

$21.14

$20.15

$20.27

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4wk 30th Dec 4wk 27th Jan 4wk 24th Feb

$19.60

$19.80

$20.00

$20.20

$20.40

$20.60

$20.80

$21.00

$21.20

$21.40

ALP-1 market movement - units sold

Units sold

Average price

15

ALP-1 by genre

Total Fiction Non FictionAcademic

andProfessional

Children’sScience,

TechnicalMedical

SchoolTexts

Not yetclassified

30 Dec2000

$75,310,218 $20,264,315 $23,984,798 $12,770,203 $9,569,588 $5,012,874 $51,871 $3,656,569

27 Jan2001

$32,792,144 $6,867,407 $8,201,825 $5,738,116 $3,425,952 $2,688,402 $42,044 $5,828,399

24 Feb2001

$36,144703 $7,321,084 $8,087,577 $6,634,576 $4,090,077 $3,262,258 $65,556 $6,683,576

% ofTotal

100 % 20.3% 22.4% 18.4% 11.3% 9.0% 0.2% 18.5%

16

Monitoring individual title sales

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Week01

Week02

Week03

Week04

Week05

Week06

Week07

Week08

Week09

Week10

Week11

Week12

074754624X Harry Potter and the Goblet of Fire

0747532745 Harry Potter and the Philosopher's Stone

0747546290 Harry Potter and the Prisoner of Azkaban

0747538484 Harry Potter and the Chamber of Secrets

17

Monitoring for reprint decisions

0

50

100

150

200

250

300

19-A

ug-00

26-A

ug-00

2-Sep-0

0

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0

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ep-00

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ep-00

30-S

ep-00

7-Oct

-00

14-O

ct-0

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ct-0

0

Darwin's Dangerous Idea

18

Value of supply chain data ...

> Having both the shape of sales out and actual sales through to the reader are key indicators to good supply chain management

> Sales data analysis can be a valuable indicator to future sell-through rates and can significantly improve ‘out-of-stocks’

> The shape of a title timeline on a backlist title can indicate the latent re-stocking level . This is key information for the reprint decisions

> Although BookTrack will not cover every retailer, the shape of the data is critical. Knowing the universe allows weighting to cover non-contributing outlets.

19

BookTrack data characteristics ...> All titles are measured> All titles are subject classified (6 subject

groups)FictionNon FictionChildrenAcademic & professionalScientific, technical and medicalSchool text

> All titles are categorised (140+ subject categories)

Romance FictionMystery FictionHistorical FictionWar Fiction

> Format (paperback, hardback), RRP and ASP> Publisher and imprint information

20

Chart and report types ...

Delivery Sector Regional

Top 5000 CHARTs

all titlesby format (2)*by subject (6)*by category (140)*

Weekly4 weekly12 weekly

NA NA

Market Share REPORTS

Publisher / imprint :by format*by subject*by category*

4 weekly12 weekly NA NA

Period TREND reports

by titleby publisher*by imprint*by subject*by category*

4 weekly NA NA

* available when bibliographic issues are resolved

21

Chart example ...

IndexCht Pos ISBN Title Author Imprint

Total Qty RRP ASP

Prev Pos

Wks In

Cht DOP Category1 1 014029807X Smoky Joe's Cafe Courtenay, Bryce Penguin Bks 8525 $14.95 $10.54 0 0 1/01/01 Fiction, General2 2 0670886157 Body Business Aston, Donna Viking 3662 $19.95 $19.12 0 0 1/01/01 Health and Hygiene3 3 0552998931 Chocolat (Film Tie-in) Harris, Joanne Black Swan 2818 $0.00 $20.50 2 5 4/01/01 Fiction, General4 4 0733517269 Slade Baron's Bride:Baron's Marton, Sandra Harlequin Mills & Boon2622 $4.95 $4.32 10 13 1/12/99 Fiction, General5 6 0747532745 Harry Potter and the Philosopher's Stone Rowling, J K Bloomsbury Pub. 2359 $14.20 $12.22 3 13 1/09/97 Children's Books6 7 0747546290 Harry Potter and the Prisoner of Azkaban Rowling, J K Bloomsbury Pub. 1924 $16.40 $13.66 5 13 1/03/00 Children's Books7 8 0747538484 Harry Potter and the Chamber of Secrets Rowling, J K Bloomsbury Pub. 1920 $14.20 $12.12 4 13 1/04/99 Children's Books8 9 0141306068 Deadly! Book 6: Pluck Gleitzman, Morris Penguin Books Australia Ltd (Puffin)1794 $4.95 $4.67 76 1 1/03/00 Children's Books9 10 0552998729 Marrying the Mistress Trollope, Joanna Black Swan 1752 $0.00 $19.43 166 1 5/02/01 Fiction, General

10 13 0091842050 Blue Day Book, The: A guide to getting over the blue days anGreive, Bradley Random House Australia1398 $14.20 $13.63 6 13 1/04/00 Psychology11 15 0099280256 Brethren, The Grisham, John Arrow Bks. 1122 $18.60 $14.98 8 13 1/01/01 Fiction, General12 17 0140276335 White Teeth Smith, Zadie Penguin 1014 $19.95 $19.78 21 13 1/07/00 Fiction, General13 18 0140296689 A Taste For it McInerney, MonicaPenguin Books Australia Ltd925 $18.95 $18.29 0 0 1/01/01 Fiction, General14 19 0702231886 True History of the Kelly Gang Carey, Peter University of Queensland Press888 $30.00 $29.21 13 13 1/10/00 Fiction, General15 20 0733613047 Floating Brothel Rees, Sian Hodder Headline Australia (Hodder)848 $27.95 $27.25 11 6 1/02/01 History (Australasia)

22

Market Share Report example ...

Market Share Publ Grp by Subj Grp (4 W/E Sat 22-APR-00) All Titles General Retail Market

All Subjects

Academic and

ProfessionalChildrens Fiction

Non Fiction

School Textbooks

Scientific, Technical

and Medical

Unknown

All Publishers 100 100 100 100 100 100 100 100Penguin Grp 9.72 8.67 13.9 10.92 10.44 0.1 1.53 13.21HarperCollins Grp 8.9 9.06 5.1 13.21 8.05 7.82 4.53 4.01Random House Grp 7.73 6.06 4.36 15.32 5.76 0.15 1.95 2.92Transworld Grp 6.97 1.36 5.87 14.7 3.2 0 9.96 0.2Hodder Headline Grp 6.79 5.57 4.12 14.34 3.69 3.74 1.42 0.84Orion Grp 3.49 3.39 0.53 6.66 3.06 0.02 1.49 1.01Macmillan Trade Grp 3.19 2.2 2.47 5.2 3.19 0 0.78 3.73Little,Brown Grp 3.05 1.55 0.02 6.6 3.01 0 0.42 0.46Bloomsbury Grp 2.86 0.64 14.81 1.37 0.56 0 0.96 0

23

Period Trend Report example ...

Trend Title within Imprint by Period (13 x 1 W/E Sat 29-JAN-00) Little,Brown Titles Dop November 1999 General Retail Market All Periods Wk45 Wk46 Wk47 Wk48 Wk49 Wk50 Wk51 Wk52 Wk53 Wk01 Wk02 Wk03 Wk04

All Titles 715,852 35,856 40,585 51,891 57,498 73,694 85,621 107,230 133,339 36,819 31,786 23,677 19,878 17,9790316648574 Whatever Love Means 105,215 2,551 4,695 7,200 10,748 13,299 14,831 18,393 21,454 4,287 3,118 1,591 1,819 1,2290316853615 Forever Spice 89,725 8,213 7,367 6,667 7,199 9,074 11,487 14,402 16,507 4,025 2,051 1,428 622 6820316852635 Ranulph Fiennes: Fit for Life 37,470 1,279 1,678 1,838 1,876 3,187 4,975 4,775 6,177 3,072 3,151 1,805 2,021 1,6360349112274 Joseph 36,288 2,749 2,516 3,129 2,995 3,363 4,578 4,333 4,970 1,606 2,101 1,425 1,167 1,3570316648493 Crimea 23,874 1,148 833 3,496 2,833 2,019 2,678 2,510 4,363 1,148 833 1,161 540 3150751526509 Born 1900 22,438 919 1,252 1,329 1,869 3,004 3,593 3,723 3,703 703 703 768 559 3121857237404 Swordsman's Oath 19,404 4,065 2,880 2,193 1,992 1,150 1,607 1,143 1,144 930 587 685 566 461

0316648574 Whatever Love Means

0

5,000

10,000

15,000

20,000

25,000

Wk4

5

Wk4

6

Wk4

7

Wk4

8

Wk4

9

Wk5

0

Wk5

1

Wk5

2

Wk5

3

Wk0

1

Wk0

2

Wk0

3

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4

24

BookTrack trend so far ...

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

9th

De

c

31st

De

c

20th

Ja

n

10th

Fe

b

3rd

Ma

r

24th

Ma

r

14th

Ap

r

5th

Ma

y

26th

Ma

y

16th

Ju

ne

7th

Ju

ly

28th

Ju

ly

18th

Au

g

8th

Se

pt

29th

Se

pt

20th

Oct

10th

No

v

1st

De

c

22n

d D

ec

Christmas

Mothers Day

Easter & School holidays

Back to School

Mid Year Sales

Fathers Day

25

Tracking average selling prices ...

$21.14

$20.15 $20.27

$19.73$19.47

$19.87$19.52

$18.41

$19.40

20.43

$17.00

$17.50

$18.00

$18.50

$19.00

$19.50

$20.00

$20.50

$21.00

$21.50

4w

k 3

0th

De

c

4w

k 2

7th

Ja

n

4w

k 2

4th

Fe

b

4 w

k 2

4th

Ma

r

4w

k 2

1s

t A

pr

4 w

k 1

9 M

ay

4 w

k 1

6 J

un

e

4w

k 1

4 J

uly

4 w

k 1

1 A

ug

4 w

k 8

Se

p

26

Bridget Jones’ performance ...

0

1000

2000

3000

4000

5000

6000

0330375253 Bridget Jones's Diary (film tie in) 0330367358 Bridget Jones : Edge of Reason

0330332775 Bridget Jones's Diary

27

Comparing category titles ...

01000

20003000

40005000

60007000

80009000

10000

073361342X Dawn 0732269199 Nancy Wake Biography 0733310125 John Eales

28

Desk research is a much cheaper and more productive use of time and

money than publishing a title and hoping it will sell!