Library Acquisitions: Practice & Theory, Vol. 13, pp. 103-107, 1989 0364-~08/89 $3.00 + .OO

Printed in the USA. All rights reserved. Copyright 62 1989 Pergamon Press pit

CHARLESTON CONFERENCE 1988

JOURNALS PUBLISHING: ONE PUBLISHER’S EXPERIENCE

GORDONGRAHAM

Chairman of Butterworths

My presence here this morning is entirely serendipitous. It began with a letter which I didn’t have to write. Writing unsolicited letters is like putting one’s head above the parapet. It can be dangerous, but it’s often the only way to get on with the battle. In fact, I wrote two let- ters, one for publication and one privately, both in response to a salvo fired in the correspon- dence columns of The Bookseller-the British equivalent of Publishers Weekly by Bernard Naylor, Librarian of the University of Southampton.

His subject was “Periodical Prices.” He had monitored the prices of a “constant basket of over 6,000 periodicals,” and had found that they had increased in price by 134% in six years from 1979 to 1985. During the same period, his budget had gone up by 78%. “Since then,” he continued, “periodicals’ costs have continued to rise much faster than the general rate of inflation, and periodical publishers and agents, when s~cific~ly challenged on this point, say they cannot predict any end to this trend. . . Does anyone know of any other industry which makes predictions like that yet remains on good terms with its major customers?”

In my public response, I said that I believed the problem could be ameliorated by meet- ings with publishers (like this one) and that it was possible to have good relations while having differences of opinion. In my private response, I said I had some ideas and invited Mr. Naylor to lunch. He must have thought I was inviting myself to lunch, because he said he was “hesi- tant to spend the library’s money at the dining table.” But he added that if I could “put together some information about the kind of solutions I had in mind, it might well be pas-

sible to take the matter further.” I said that, for my part, I was hesitant to put my ideas in writing until I could formulate them. So my peace pipe became an exchange of grenades. We have still to meet. But I am sure that when we do, we shall get on fine, because I know him by repute and judge him, from his letters, to be a man of ideas and spirit.

One of the mistakes that librarians tend to make about publishers, and which publishers also make about librarians, is that we regard each other generically. Librarians, whom 1 have been meeting for forty years all over the world, are endlessiy individual. It’s not true that when you have met one you have met them all. You have only met them all when you have met them all, and who is ever going to do that? Publishing also is not monolithic; publishers are aggressively individual and compete jeaiously with one another. Each believes that his

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imprint has a stamp of excellence which will distinguish it from all others. Fond though I am of my good friends in companies such as Elsevier, Springer, Pergamon, Academic, Plenum, Wiley, Blackwells, Dekker, OUP, CUP and others, I do not wish to be confused with them. Nor do they with me. I do not presume to speak for them, and I do not expect them to speak for me. So you will understand that I was not best pleased when Mr. Naylor remarked in his letter that, “One of your periodical publisher colleagues is contemplating his next corporate acquisition on his 55metre yacht in the Mediterranean.” Am I responsible for the length of Robert Maxwell’s yacht? 1 found myself also identified in Mr. Naylor’s mind with the tone that his daughter’s Bank Manager uses to refer to her overdraft, since he compared their rela- tionship with that between publishers and librarians, who, I had said, share the problem of periodical prices. I made this point also in my public letter, which had a happy result, since it attracted the attention of my old friend Lyman Newlin, who suggested to the organizers of this Conference that I join you today. Rules which I have followed in my publishing life, and which have contributed to my happiness and survival are:

1. Never miss an opportunity to talk to librarians; 2. Seize every chance for transatlantic dialogue; 3. Always oblige your friends.

This conference qualifies on all counts. Yet I stiI1 would have hesitated to make the trip had it not been for my sympathy with the theme that Katina Strauch outlined in her prospectus: “Questioning Assumptions.” Furthermore, her use of quotations from James Elroy Flecker (who said in addition to the excerpt that Katina quotes that “not for trafficking alone” we seek the golden road to Samarkand), Lewis Carroll and John Locke, suggested an atmosphere of philosophic detachment which is the best solvent for adversarial attitudes.

The assumption that I wish to question is: That librarians and publishers are natural adver- saries. Whatever is discordant in the community of the printed word today is due to exter- nal economic and technological pressures. We compound these by our laager mentality, to which publishers, booksellers and librarians are equally prone. Our essential relationships are not vertical, but lateral, because we all share an inescapable middlemanship between author and reader. When we fail to nurture our lateral relationships, the result is misunderstanding and friction.

Librarians, booksellers and publishers do the same thing basically. We run storehouses of printed artefacts. Publishers want to move them out and librarians want to move them in. Booksellers can always move them back when they can’t move them forward. It should be an ideal partnership. But partnership needs dialogue. Publishers and librarians are both wrong when they spend more time talking with booksellers and subscription agents than they do with each other. The fact that they are now talking more with each other-worldwide-year by year, reflects today’s travail of the printed word.

I shall try to illustrate this by telling you something about my own company’s experience in the economics of journal pubiishing. Superficially, such publishing today has the symp- toms of ecological disaster-over-population, limited resources, basic changes in the climate and sectarian prejudices inhibiting aid programmes. Yet, Iike other hard-pressed societies with innate strength to survive, the journal has demonstrated its resilience. Few today recall that the death of the scholarly journal was prophesied in the 1970’s. There was going to be a paperless society-remember? Electronics would eliminate print, and indeed, this has hap- pened - for stock prices, airline timetables and similar non-poetic data. The journal has sur- vived against the odds, because it is concerned, not with the mere need for information, but

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with the greater and better needs for study, reflection and research, which is what librarian- ship and publishing are both substantially about. We should unite in resisting descriptions like “information provider” and “communications industry.” I don’t want to be the first and I don’t want to belong to the second. Journals-and books, of course-provided they meet cri- teria of quality and topicality, are essentially vehicles of ideas, in which authors and readers have common cause. In such a partnership, there can be no exploiters or exploited. If, as some librarians seem to believe, publishers are merely gouging the market, then publishers must be really stupid. The first lesson in economics is that you retain your market by taking care of it. Yet Herbert S. White, Dean of the Indiana University School of Library and Infor- mation Science, is reported in The New York Times of 5th September as saying that schol- arly journal publishers “don’t treat us as customers; they treat us as purchasing agents.” Include me out of that statement, as Sam Goldwyn is reported to have said. White goes on to criticize European journal publishers in particular, on the grounds that they charge pre- mium prices to American libraries. However, American journals cost more abroad than they do in the United States. So do Cadillacs. And Volkswagens cost more here than they do in Germany. The price of journals is a raw nerve end in the United States, because of the crimp- ing of library funds and because Europe is the source of a large number of journals impor- tant to students and scholars in the United States. The “mark-up,” however, is a peripheral issue. Mr. White and Mr. Naylor are singing verses of the same song.

The underlying problem is not price, but the fact that journals are habit-forming. A book is bought only once. That is why limited library funds are today favouring journals at the expense of books. Journals also are more subject than books to specific demand from the scholarly constituencies whom they serve. When librarians “de-select” a journal (what’s wrong with the word “cancel?“), they displease their clients as much as their suppliers. One can only sympathize with them in this sad dilemma. On the other hand, with journals, as with any other commodity, the consumer is in charge. If he cannot afford to purchase, he must either go without, or find some other means of meeting his needs, which often means, in the case of journals, sharing, photocopying or inter-library lending.

There is a paradox. In terms of funds available to buy subscriptions, the supply of jour- nals today appears to exceed the demand. Yet at the publisher’s desk, in terms of editorial space available, the demand for publication exceeds the supply. New journals, started with enthusiastic support from new disciplines, often find that they have more publishable arti- cles than their space can accommodate. Some increases in journal prices are due to increases in numbers of pages per issue, or in frequency of publication. Someone has probably worked out the price per page of all journals, and shown that price increases by the page are closer to normal inflation than subscription prices are. Price, in publishing, is a product of num- ber, If subscriptions fall, prices are bound to go up. This does not deter scholarly commu- nities from ignoring limited library funding and pressing to retain their favourite journals or have new ones added to library collections. Librarians are thus caught in a three-way squeeze between publishers, their constituencies, and institutional library funding. Librarians are beset, and can be excused for regarding publishers as adversaries.

Understanding begins with the exchange of ideas. I used to say to my daughters when they were growing up, “You tell me your problems and I’ll tell you mine.” This may not provide a solution, but it sure provides a perspective. That’s my excuse for telling you about Butter- worths’ journal business. We publish ninety-three journals, seventeen in the United States and seventy-six in Britain. Turnover amounts to about $10 million out of our total worldwide turnover of $175 million. We are principally book publishers-in ten countries-specializing in Law, Medicine, Tax, Accountancy, Engineering and other professional disciplines. About

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one-third of our journal business is in Europe, one-third in the United States, and the remain- der in the rest of the world. Very few journals are sustained by sales in the country in which they are published. Subscribers in countries of publication pay less than subscribers abroad. Take for example two journals thrown together by alphabetical sequence-“Contraception” and “Crop Protection” (somewhat opposite in purpose) ! “Contraception”, published in Mas- sachusetts, costs $160 in the United States and $190 elsewhere. “Crop Protection,” published in London, costs f 1 IO in the UK and f 130 elsewhere. These differentials recognize the addi- tional export costs in postage, collections and handling. Export prices sometimes include hedges against exchange fluctuations. Subscription rates can be changed only once a year, and, because prices have to be publicized in catalogues and fed into subscription agents’ sys- tems, this has to be done six months before the subscription year commences. With the un- predictable fluctuations in exchange rates, this can result in unforeseen and uncontrollable profits and losses.

It is, of course, not meaningful to compare the circulation of one journal with another. Some cater to very small constituencies. If they attain a few hundred readers, they have reached their maximum. Others run into thousands. Some of the older journals tend to have larger circulations. Of the sixty journals which were started before 1980, twenty-one have cir- culations of more than one thousand. Of the remaining forty, started since 1980, there are only two with circulations over one thousand. Most of the older journals have peaked in cir- culation. It is normal for the circulation of mature journals to go down each year. Newer journals are naturally expected to show an upward trend. Both processes are slow. Even suc- cessful journals may not break even until they have been published for five years or longer. “Break even” means that the subscription income equals the physical costs plus the overheads. The “gross margin” is the difference between the physical costs and the subscription revenue. The overheads of Butterworths’ two publishing companies attributable to journals -that attributable to books is higher-are about 35% of revenue. Of course, overheads of differ- ent journals vary, but, with the average overheads for the whole enterprise of 35%, it requires a gross margin of 35% before a journal is adjudged to break even. Some of our journals are making handsome profits and others hefty losses. If every journal were to be judged sepa- rately on its pro~tability, no new journals would be launched and some old but valued jour- nals would have to close down. Every journal is either being born, growing up, maturing or declining. As in other communities, the strong carry the weak and the old sustain the young. Very high negative gross margins indicate new launches, with very low subscriptions and high costs. Most of the negative gross margins are the younger journals.

In the past five years, we have increased the number of journals that we publish, by seven- teen. Every one of these new journals meets an identified need. This is the net increase. Some journals have been killed off, or amalgamated with a companion publication. This is always to the regret of the subscribers, but there simply have not been enough of them to support their journal. Sometimes, one publisher can make a success of a journal when another can- not, because he is more familiar with, or better known in, a particular segment of the mar- ket. So publishers buy and sell journals from and to one another. Not all of the new journals in the Butterworth list have been launches. Some have been purchases. Some of the journals are under contract with societies, who now and then become dissatisfied with a publisher, and move to another one, or may undertake their own publishing.

Journal publishing is a ffuid business, and a publisher needs to be dynamic and forward- looking. The most vulnerable journals today are often the old-established high-ticket dino- saurs, resting on long habit and asserting their indispensability. We aI need some of these,

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because, without a core list of successful journals, with margins slrong enough to carry the loss makers, there is no basis for a business. The number of negative or low gross margins on the Butterworth list makes it look like an impending bankruptcy, but the overall average is a gross margin of 40070, which means we make a net profit of $0.5 million on our $10 mil- lion turnover. This is not considered an optimum for the shareholders’ interest, but we are young publishers in the field. A successful journals business should probably make a net profit of lo-15070 of sales, out of which, of course, taxes and dividends have to be paid.

Although subscriber numbers and subscription prices are the general instruments of mea- surement, the survival of a journal depends, in the end, on its editorial quality and target- ting of need, reflected in the number of citations. It is in these respects that journal competes with journal and publisher with publisher. Even if library funds were unlimited, this would be the proper criterion. Why buy an inferior product at any price? I assume that librarians check with their constituents whether the journals to which they subscribe are meeting their needs and highest professional standards. If the totality of the funds available is insufficient to enable libraries to fulfil their expected roles, then the only answer, painful to all, is de- selection. Selectivity is the normal answer to over-population. More journals may have to die in order to bring supply and demand into relation. There has to be a balance, not only between the numbers of journals competing for limited dollars, but also among the constantly increasing number of new disciplines competing to have their own journals.

To sum up, I see every reason for toughness in librarians, but none for animosity. I see every reason for professionalism among publishers, but none for apprehension. In times of stringency, both of us have to be conscientious gate-keepers. Together we can gently remind the communities we serve and the institutions on whose funds we depend that neither of us can be taken for granted. We can mourn together over the casualities, but while we mourn, never forget to remind each other, as my daughters wrote once on an anniversary card to my wife and me, “Without you, where would we be?”