The “M” in STM publishing has always held a special interest for me, as medical publishing represents something of an aspirational model for research publishers. Medical publishing finds many markets, from academic libraries to hospitals to individual practitioners. It is also buttressed by a big chunk of advertising, something that, say, publishers in anthropology can only dream about. And health care is 17% of the U.S. economy: surely a market of that size will drive growth for years to come.
An excellent snapshot of the current state of medical publishing can be found in the recent report, Simba Information’s Global Medical Publishing 2013-2014, which you can purchase here. I should disclose that the lead author, Eric Newman, is a friend of mine, both of us part of the extended network that emanates from Gordon Graham, the patriarch (who was, among many, many other things, the founding editor of Logos, to which I was formerly a contributor).
There are lots of nuggets in this report, though its real strength is in the company by company profiles, which cover the entire industry segment. I was particularly intrigued by the section on TruVen Health Analytics, which is controlled by a private equity group. TruVen represents the medical publishing units that were spun out of the Thomson company (now Thomson Reuters). TruVen shares with another Thomson spin-off, Cengage, a penchant for coming up with ridiculous company names. Cengage slid into bankruptcy, so I ask: What’s in a name? Actually, quite a bit. When companies have names that do not describe products or the people behind them, you know that the financiers, not the operators are in control. One of the 10 immutable laws of publishing is that when a publisher strays from its origins in the editorial enterprise, the spark that gave rise to the company in the first place is snuffed out. I don’t know what the other 9 are.
But the nuggets: In 2012 medical publishers had global sales of $10.1 billion, about a third of which came from journals (the figures also include books, conferences, and newsletters). This represents a mild decline, as the Great Recession took its toll. Overall medical publishing has been flat for several years now. But $10 billion is a big number, is it not? And this is without including the non-professional areas for health care (e.g., Web MD). But it is interesting to see that even medical publishing could not fully withstand the aftershocks of the global financial crisis. Isn’t health care supposed to be immune (cough) from the swings in the economy? (According to the Simba report: “Medical publishing is not directly linked to GDP, but the size and relative growth of medical publishing does tend to follow overall economic health.”)
For my part, I am struck by how small $10 billion is. Health care is about 17% of the U.S. economy; that’s 17% of $16.62 trillion in 2012. The U.S. has about 25% of the world economy. $10 billion may be a nice figure for a 27-year-old Silicon Valley entrepreneur, but as a piece of the overall economy, it is a pittance. So one strategic question for medical publishers is how to make their products and services more integral to health care overall–how, in other words, to create more value.
Unfortunately, some of the figures are moving in the wrong direction. Medical advertising is down and, as far as I know, is showing no sign of picking up. The reason for this is one of the unanticipated consequences of the migration from print to digital products, the fall-off in advertising. Advertisers look at print publications and say, Isn’t all the excitement with digital? But when they look at the digital opportunity, they see enormous inventory, which drives the price of advertising down (typically by 90%). I hope there is no one left alive who believes that advertising, outside a handful of key consumer services, is the key to monetizing online publications; it’s either user-pays or author-pays. The secular decline of medical advertising undermines the notion that medical publishing represents a model for publishers in other domains to emulate.
Medical publishers are finding growth in new markets (e.g., Brazil, Turkey) and in mobile media. Since medicine is a global affair, we should not be surprised that emerging economies are generating new opportunities, something that is largely true for many other STM segments. This is yet another area where humanities publishers are more constrained, as the future role of medicine, information technology, chemistry, and physics around the world seems assured, but this is not always true for studies of literature, history, and political science. I am anticipating increased mergers and acquisitions activity as global medical publishers pick up local publishers around the world to accelerate their penetration of these markets.
With mobile media, medical publishers probably have an opportunity that is greater than for any of its peers in the STM world. Doctors see patients; they use mobile devices to access information quickly during an examination. While no professional publisher nowadays can afford to ignore mobile platforms, medicine may be unique in that mobile usage potentially represents additive business as important information is brought to bear on emergency situations. This means new investment in app development and also having to learn how to navigate the difficult business rules of some major consumer technology companies (that is, Amazon and Apple). We should look for signs of a new mobile ecosystem arising around different platforms, as professional publishers seek greater control over their products and services.
So with medical publishing we have a situation that, however varied in some of the particulars, is essentially consonant with that of other segments. STM publishing is mostly mature; companies have to fight for growth. While some growth can be earned in emerging markets, overall this is a market-share battle. Market-share battles lend themselves to consolidation. Thus the financiers will be the key players in STM publishing during this phase. We will be seeing more funny company names in the years ahead.