With the promulgation of Plan S and negotiating stand-offs over publish-and-read and read-and-publish deals, some professional societies are beginning to think the unthinkable: selling off their publishing operations to the highest bidder. Such transactions are exceedingly rare, but the atmosphere of uncertainty in scholarly communications is making some societies consider getting out now before it’s too late. This takes them down a long and difficult road — of internal discussions, of analyses of their operations, and even of conversations with bankers — for which they are often ill prepared and temperamentally unsuited.

Professional societies are mission-based organizations that do many things; for some, publishing is one of them. Indeed, some societies were founded around the need to create a publication in a specific area. Over time, however, things may have changed. The publishing program may have gotten larger; it may have begun to throw off some money; for some lucky societies this sum of money is nothing to sneeze at. It is not unusual to stumble upon a society whose publications generate half or more of the total society revenues, and some of that money is used for other purposes, such as subsidizing conferences and Webinars, assisting job-hunters, lobbying for governmental support of the society’s mission, or providing continuing professional education. All of these activities directly or indirectly contribute to research and teaching; that value is captured through the commercialization of publication. When society publishing becomes successful, in other words, it is no longer simply a mission-based activity but it is now a business. As such it can be looked at with a cold eye: Hey there, publishing business: what did you do for me today?

Home for sale

To put this another way, for a professional society, publishing starts out as a strategic activity, but it can evolve into a non-strategic asset. When it is viewed simply as an asset — How much money can we derive from it? — the leaders of a society may begin to behave like asset managers anywhere. How can I maximize profit (usually called “surplus”)? What is the appropriate level of investment? What dividends can I pay myself? And most importantly, should I buy or should I sell?

I had occasion to address this issue in the Scholarly Kitchen from a different perspective a while back, but recent events — Plan S in particular — have changed the way many societies think about their publishing assets. There is palpable anxiety in the society world today as compliance with prospective funder requirements would gut the business models of many.

Society publishers vary in their economic strategies. Some are independent publishers — an increasingly hard game to play. Some band together with other society publishers to share some overhead and to provide a bit of critical mass for sales and marketing. Increasingly society publishers license publishing rights to the largest firms (though the university presses of Oxford and Cambridge are also significant players in this area) — Wiley, for example, has literally hundreds of society-owned journals in its portfolio. And then there is the rarely invoked strategy of selling the assets outright, more common for books than journals (as the backlist of books has ongoing economic value).

Why is an outright sale infrequent? There are various reasons for this, but the most important is that the society feels a connection to the publishing operation. To begin with, in many cases the society’s name is in the title of the journal — thus the Society of Phrenology publishes a journal called The Journal of the Society of Phrenology. It is hard for a society to allow something with its name on it leave its control. The second reason is editorial, the desire to maintain standards and also to set the direction for certain kinds of research. It would be awkward, for example, for a journal of continental philosophy to be sold off and converted into a journal of analytic philosophy. Finally, the society’s members may feel that they are losing a publishing venue that serves their interests if another entity takes control.

For these reasons, the preferred course of action for most societies is the third, the licensing of publishing rights to a larger entity, usually for a period of 5-10 years. The license allows the society to retain ownership and control of the publications, and to remain in charge of how the brand is used and of the editorial strategy. When the term of the license is up, the society can determine if the partner was a good one or not and adjust course accordingly.

The problem with this strategy is that it is based on the assumption that the value of the publications will remain constant or rise. If the value falls instead, when the contract is up the society may be offered a far smaller amount of money or none at all. In an adverse economic environment, in other words, the value of a journal may go into secular decline. Society leaders, like individual investors everywhere, know that the way to make money is to buy low and sell high. If the value of a journal appears to be on its way down, is it not best to take the money and run?

People who put deals together for a living are astonishingly creative about stitching together two parties even when they appear to have irreconcilable differences. Concerned about allowing a buyer to use your brand? How about licensing the brand for 5 years (or, for the right price, even 10), giving the buyer time to migrate to a new brand during that time? Editorial control? You could insist that if an oversight committee appointed by the society is unhappy with the editorial decisions of the new owner, the new owner will no longer be able to use the society’s brand. Loss of a publishing venue for society members? Well, is this even an issue with perhaps 30,000 journals to be found in the wild, many of them Gold OA journals with a low bar for acceptance? The people who put these deals together are compensated precisely because they find ways to make the impossible deal happen. The most effective outcomes are those that are conceived with an understanding of the needs and ethos of the research community and the professional societies that link the many academic institutions together.

What is really necessary is for societies to bring the same careful intelligence to thinking through the current publishing environment as their members bring to their own research.

The important question is not whether you can sell a society’s publications outright — if it’s a good set of properties, you will find a buyer; the real question is whether a reasonable forecast puts a higher or lower value on the publications in the future. Plan S is causing panic for the simple and obvious reason that its terms, whether intentionally or unintentionally, are pointed right at the heart of professional society publishing. If all articles everywhere were subject to Plan S compliance, most society publications would be shut down by the end of the year. But is panic the right response? Is panic ever the right response? A good place to start assessing Plan S and its many variants is to inquire whether all articles everywhere indeed are subject to compliance — or ever will be.

Before a society decides to do the unthinkable, it would be a good idea to do some thinking. Does Plan S have legs? How broad is its coverage? How likely is it that the U.S. government, among the largest funders of research in the world, will support the policies of a consortium anchored in Europe whose communitarian ethos is repugnant to the commercial libertarianism of those in power today? What about all those fields that don’t receive funding? How likely is it that librarians will suddenly all stop buying things, even as they have been trained to be exquisitely intelligent buyers? And by the way, has anyone thought to ask well-established researchers, who have fought their way through the traditional environment to their successful perches today, how they feel about the obliteration of the reputation engines that are the key journals in any field? Perhaps Plan S is a shot across the bow, but not a direct hit to the magazine.

What is really necessary is for societies to bring the same careful intelligence to thinking through the current publishing environment as their members bring to their own research. To be alert is one thing; to panic, quite another. We may indeed see an uptick, perhaps even a sharp uptick, in the number of outright divestitures of publishing assets, but let’s hope that such decisions are made in the best interests of scholarship and not in haste.

Joseph Esposito

Joseph Esposito

Joe Esposito is a management consultant for the publishing and digital services industries. Joe focuses on organizational strategy and new business development. He is active in both the for-profit and not-for-profit areas.


48 Thoughts on "Strategic and Non-strategic Society Publishing"

Thank you for this excellent contribution. Society publishing will be one of the top topics at the next APE-Conference in January 2020 (if is not too late).
Best regards
Arnoud de Kemp

We heard these predictions and reports from the canary in the mine, the music business.

Now we know the truth: The business grows. The product to service transition is enriching, given time and funding.

Now we see music companies have never carried greater value. The same will be true of scholarly publishing, whether the measure is financial or societal contribution. Clinging to the old vine is short-term, grabbing the next one is long-term.

Jim, can you provide us a link to data showing that music companies have never carried greater value? (Also relevant would be data showing how many music companies there are in the marketplace today as compared to, say, 1990.)

Yes, I included a link from 2019 showing that Universal, Sony, Warner have exploding market caps. We have a new rough indicator of value because Vivendi is offering half of Universal Music in a potential deal that is attracting the deepest pocketed investors, which apparently include Liberty Media, Google, TenCent and others. Also, a very knowledgeable investor (Sony) recently bought the other half of Sony for a substantial price. Len bought WMG not too long ago and now sees quarterly revenues that dwarf the entire purchase price of the company.

Why? Monthly recurring revenues. Scholarly publishing needs some of that!

I don’t know where you’re getting your figures about the music companies “carrying greater value.” That’s not born out by industry revenues, which the IFPI states as follows:

“Revenues in 2017 were still just 68.4% of those in 1999.”


You’ll also notice that artists have had to rely on performance revenues much more, which is being blamed for vocal fatigue (for singers) and wear and tear for other players, leading to shorter careers.

Jim, the numbers cited in this article apply only to three of the largest companies in the industry, all of which have portfolios that are well diversified beyond music–and in two of the cases cited here, represent “very rough approximations of a crazy-best-case situation.” Note that the data Kent and I have provided measure revenue trends across the music business generally, not cherry-picked results from the industry’s three biggest players.

I understand your skepticism — it is hard to imagine a recovery when the patient was presumed dead. That was music the product — and not dead, but comfortably niche with vinyl and even cassettes healthy.

At the same time, a healthy on-demand service business has evolved, passing 70 percent of its revenue to music creators, split 90-10 between sound recording owners and songwriters who choose to license their music. For non-interactive use, another service business licenses through SoundExchange another billion dollars split 50-50 between recording owners and performers.

On the other hand, money talks.

As regards allocation, music is now required by statute (the recently passed Music Modernization Act) to use global databases and unique identifiers to granularly allocate money to song writers. The law passed unanimously without objection in committee or either floor of Congress; It vows to get money directly to creators, large or small.

The key to this growth: Aggregation, licensing into new markets.

In other words, make it faster, easier, simpler to access and pay in hopes that more will.

Turns out, that works.

Interesting. What you’re arguing is that companies that pivot to recurring revenues (like the music industry has been able to do via Spotify and other music subscription services — ah, Columbia Records!) become more valuable.

The issue with Plan S and other such matters is that they would move scholarly publishing AWAY from recurring revenues (which has long the been the main business) and into purely non-recurring revenues (work for hire). That’s why there is the concern.

Its disappointing to hear your impression that society leaders are in a panic. I hope calmer heads will prevail. Hasty action here will have irrecoverable impacts.

Joseph, this is a very interesting article. Plan S seems to have hit professional society publishing where it hurts most – publishing journals. I agree that most societies might actually end up putting up their journals for sale. Now, it is common knowledge that journal subscriptions are among the key reasons for subscribing to society memberships. So, with this key element missing from society memberships, what could be the potential new offerings that societies can offer to avoid extinction? What choices do societies have in the light of Plan S developments? Do any alternative and sustainable models even exist for societies?

Historically, this common knowledge re membership to get the publications was true. But, is it anymore?

It might not be so in the near future. But what other revenue model is scalable? I have a feeling that societies might have very little choice apart from selling out to commercial publishers. I’m interested in knowing any potential scalable and feasible alternatives.

Yes. It’s usually a top-rated membership benefit, even to this day.

It appears to be losing its draw as a reason to renew, especially among early career researchers per the Wiley society membership survey. E.g., “Receiving the society’s journals was also a less common factor in the decision to renew for early career members than the average member (36% compared to 49%). For those who’d been members longer than early career members (3-10 years), journals were only slightly more of a factor (42% compared to 49%).” (https://www.wiley.com/network/societyleaders/member-engagement/what-do-early-career-researchers-want-from-society-membership)

On-going subscription ala $10-$20 month for *all* journals?

Spotify for scholarly publishing …

Except Spotify continues to lose money:
Worth thinking about the numbers — they have 87 million paying subscribers, and 191 million total users including those using the free ad-supported version. Total annual revenue looks to be around $6B.

How would that work for a market with a small fraction of that number of users, and that currently operates on around $10B per year (https://www.stm-assoc.org/2018_10_04_STM_Report_2018.pdf)?

Joe great article. However, I am going to present an alternative which is probably full of holes. I don’t think many will outright sell their journal program. Licensing is the avenue that most seem to take. In return for the license the society keeps editorial control of the journal in return for a royalty. The society does a spread sheet and puts costs on one side and revenue on the other and sees what it is actually making. If it is a well run operation it is 20% or so. But, is it? If one takes into account legacy costs such as retirement plans, medical insurance, office space, travel, order fulfillment, warehousing, and archiving etc. That number drops! So one negotiates a 15-18% royalty and maintains editorial control. Thus, the society’s publishing program is still a source of steady revenue. If Plan S actually happens, the publishing partner and the industry as a whole will raise page charges to cover costs while maintaining revenue and profits. Any adverse effects real or perceived will be passed onto the funders! The value of the publication will reach a state of homeostasis. In short, publisher’s are not in business to lose money nor cut profits.

Short-term, they invest in their future. Long-term, they reap the rewards. Market cap speaks louder than quarterly short-term numbers, especially when the real bottom-line is the pile of black ink at Universal, Sony, Warner, BMG etc.

The key point: They lose short-term precisely because they pay 70 percent of their revenues to creators to incentivize and monetize their creative contributions.

Same with the user market analysis for scholarly publishing, which reminds me of a joke that everyone’s heard and ends with “… and at these prices you won’t see many more of us.”

The market for scholarly publishing is exponentially larger than those who pay, oddly at the same time that it’s become increasingly voluntary to pay. Properly served, STEM is bigger than music.

Market cap speaks louder than quarterly short-term numbers, especially when the real bottom-line is the pile of black ink at Universal, Sony, Warner, BMG etc.

This is an interesting approach — the publishers would continue to produce the material and then would license it to the various “Spotify” services of the world, leaving the publishers in profit, and the problem of finding an audience or making a profit up to the platform provider.

The problems here are that growth already appears to be slowing, long before the point of profitability:

Here’s some specualtion from the head of Apple Music that streaming will be a loss leader used to sell other products:

Properly served, STEM is bigger than music.

On this point we’re going to have to differ. Music is relatively universal. Scholarly research papers, however, are written at a high level of expertise, meant as a conversation between experts with an assumed level of background knowledge. If you’re looking for a mass audience outside of the research community, then you’re going to have to reinvent the scholarly paper or sell a different type of product (if one assumes that audience really exists).

Yes, we differ on drawing a broader base. Hollywood never thought YouTube’s approach to aggregating user-generated content would draw a crowd, either, and yet in today’s world user-generated content outdraws Hollywood.

Properly positioned, the public will pay for access to learn more about the issues they face, whether medical, legal, educational — whatever. Part of the problem: Many already do pay for it through taxes in ways they would never pay for music, so much more important is STEM than music and other media.

Jim, I did read the Rolling Stone piece, and responded to it in the relevant comment string above. As for the additional link you’ve posted from Forbes, once again it discusses the fortunes of only a single music company — one that is very much an outlier. What I’d like to see is data supporting your original assertion: that “music companies” (generally speaking) “have never carried greater value.” The fortunes of Sony and Warner and Universal are relevant, but are they to any degree representative of those of “music companies” generally?

What you call “old data” from Statistica covers the years 2005 to 2017, and shows a steady drop in the revenues of music companies during that period. Is that data wrong? Is it misleading in some way? (For the record, I offered no data from IFPI, which does represent the music industry. To my knowledge, Statistica does not.)

It is fair to question the applicability across the market, but it is also fair to note that I am seeing this effect across the board, with large music companies and the aggregations to which they belong all seeing strong growth to match these valuations.

After all, Universal’s money has its origins in the same place as a tiny music company, even a single artist with a share of a single song: ASCAP/BMI/SESAC (performance), Harry Fox et al (mechanicals), SoundExchange (non-interactive streaming), Spotify/Apple/Google/Amazon (interactive streams).

2017 data from 2016 misses this story, which is the culmination of an industry in transition. In addition, the market numbers reflect easier licensing that will be accomplished with MMA’s Oct 2018 passage — another statutory aggregation that removed statutory damages for those who pay the aggregated collective.

None of this applies only to big companies. In fact, it equalizes their advantages to those who join the same collective aggregations, whether a single artist or a label. Where the trickle down effect we are discussing is most prominent is here: The biggest buy rights from smaller players, a rising ride that lifts all the boats.

Jim, you keep making assertions about the industry-wide data, and not providing any support for them. I’ll ask one more time: on what basis do you claim that “music companies have never carried greater value,” particularly in light of the countervailing data I’ve provided (showing industry-wide data that indicates the opposite)?

If your contention is that music companies have seen a turnaround in their revenues since 2017, can you point us to data in support of that?

By the way, one reason I keep harping on this point is because the publishers Joe is discussing in this piece are not the Sonys and Universals and Warners of the scholarly publishing world. They’re the Rounders and the Imagos and the Alligators — all of which have either gone out of business or have become tiny shadows of their former selves over the past twenty years, and all of which (I believe) are much more representative of the fortunes of music companies generally during that period. For every multinational music corporation that has found ways to continue raking in the big bucks, there are literally hundreds of small independent labels that have been driven out of the marketplace entirely. Saying “music companies” when you really mean “Universal” is just as misleading as saying “publishers” when you mean “Elsevier.”

As an integral part of the industry, I feel qualified to offer a timely report on the current fortunes of my clients and colleagues. I also run a large music community of over two decades with five figures of people participating. We discuss their views and opinions on a listserv daily. They work at music companies large and small.

As evidence, I point you to the press, which sees *surging* revenues and *exponentially larger* market capitalization. Here’s the irony: They are seeing their fortunes rise (largely on the strength of their catalog) at the same time that individual artists may not even need a record company to glean even greater value from their music:


So, yes, not only have the biggest companies never had a higher market cap, but even unsigned artists are making money going direct. It’s an arc that covers the field: Service revenues pay.

Jim, I absolutely agree that you’re qualified to offer a timely report on the current fortunes of your clients and colleagues. But I’m asking you for something different: data to support your assertion that “music companies have never carried greater value.” I’ve offered data that seems to indicate the opposite, the validity of which you have not disputed. Can I conclude from our exchange that you don’t have (or aren’t willing to share) data that support your assertion? (For the record: “I’m an integral part of the industry” isn’t data; it’s an appeal to authority.)

My point is that the value of music has never been higher than it is now, whether you are looking to buy the biggest company, sign a new artist, shop a single artist’s catalog or sell a large, medium or small record company or publishing company.

In addition, their money is funneled through the same aggregators, and those aggregators finances show the same results — record-high for the fourth-straight year — here’s the ASCAP example:


Or SoundExchange:


If I haven’t offered you enough evidence of that, I’m surprised, but I guess we’ll need to declare you unsatisfied with my evidence and accept that.

Thanks — this is finally some data that directly supports your assertion.

Interestingly, though, the RIAA disagrees, saying that between 2016 and 2107 “the industry was up 14.6% to $2.7 billion. This growth reflects a continuation of the trends from 2016, but overall market revenues are still significantly below the levels they were in 1999.”

Of course, the RIAA is a trade group — but so are both ASCAP and Sound Exchange. All three of these organizations have some vested interest in the data they’re providing.

Maybe the difference is between the fortunes of the record industry (examples of which you were providing earlier to support your assertion about “music companies”) and music publishing overall?

Last year, streaming finally overtook analog industry remnants, crossing 50 million subscribers in the US alone:


BTW, RIAA / IFPI trade group. Pays no royalties.

ASCAP is a collective management organization, as is SoundExchange. Each pays royalties to recipients and releases precise records of the amounts. ASCAP is a court-supervised performing rights organization for songwriters, just as is BMI, SESAC, GMR. SoundExchange is a quasi-governmental performing rights organization for performers and record companies.

Each also administers collective licenses supervised by the government. I assign their numbers a high level of credibility. They point up.

Lobbyists seeking additional government dispensation have their own story to tell. Economists call it rent-seeking. Example: Compact disc, vinyl, cassette, etc., numbers were based on units shipped multiplied by full retail price, taking no account at all of actual sales.

Raising the question: How will we feel if Google buys half or more of Universal Music Group, pondered here:


In the 1990’s the average American spent much less than $2 month on recorded music, worldwide significantly less. Industry figures were entirely contrived from shipments, not sales.

Today’s monthly spend is much higher, often across multiple services, and is seeing great global growth. Anyone can and does get paid directly from new services.

For the big players, the greatest cost is gone: Opportunity cost from allocating inventory, music unsold because it isn’t in stock, but sits on a shelf somewhere else. Trucks. Warehouses. Artists once toured in cities with no inventory, and so on. All changed dramatically for the better, including access for all. Where once the industry was reserved for those who owned disc pressing machines, now anyone can — and does — play, record and create, even using video and interactive software to create.

In addition, catalog is now more golden than before. Much of what is driving valuations is the increasing value of owning a catalog of rights with an on-going predictable revenue stream.

So are you saying that there’s no reliable way to compare industry revenues/valuations in the 1990s to those of today?

The 1990s was a product business, for the most part — performance (airplay, mostly) was largely viewed as product promotion.

Now music is largely a service business.

You can compare! Simply watch the price of a piece of a music company, large or small. What does it cost to buy Universal? What does it cost to sign an artist? Buy one of their songs or sound recordings? Etc.

Then I guess this brings us back to the original question, which you still haven’t answered: where’s the data showing that “music companies have never carried greater value”? The reason I keep asking is that my strong impression is that music companies (and not just the major labels) were doing much better in the 1990s, so I’m genuinely curious about this. If it really is possible to compare how they’re now to how they were doing then, then let’s see the comparative data. It’s certainly possible that they’re doing better now, but I’d like to see evidence. (And to be clear, demonstrating that revenues have been on a strong upswing in recent years does not answer this question.)

I assert this based on the following data: The price tag for rights has never been higher. Never.

Neither has the legal foundation ever been sounder. MMA passage — unanimous — has buoyed investors.

Two questions:

1. That’s not data; it’s an assertion. Can you refer us to some data?

2. Assuming the data is there, is the price of rights really a reasonable proxy for “the value carried by music companies”? Price, revenue, and market cap aren’t three terms for the same thing.

Societies depend on their publishing programs to fund the majority of their programs. From my experience the revenue from publishing is more like 80% of the revenue generated each year. If a society loses this revenue, how will it continue to exist? Yes you can contract out your publications to a commercial publisher and in that case you reduce your percent of the revenue from 100% to 60% as you now have to split your revenue with a commercial publisher. A society should think long and hard before selling off their journal publishing program. Society membership fees do not generate sufficient revenue to sustain a society.

Often when a society is self-publishing, their costs and overheads are much higher than those that can be achieved at scale by working with a larger publishing partner. In my experience, where we’ve signed on societies as publishing partners, through greater reach, increased sales, and lower costs, the journals earn enough extra money to pay a decent amount to the publisher and keep society net steady, if not increasing it significantly. And for the society, this is continuing revenue, rather than a one-time payment for a sale, and it leaves their options open at the end of their 5 year contract to re-sign, find a better partner, or to make that sale.

This is precisely the situation my society is in (upfront, it is with OUP!). It ceased to be a “mass membership” (mass being relative) a while back, since the journal is available in many libraries, and the share of revenue is the main source of funds for other society activities

And of course nonprofit cooperative models, as Joe states, have the oppty to offer scale/access advantages, assurance of society independence, and potentially more value control— not to be overlooked. There are avenues for fresh thinking about models and partnerships, which will be ultimately be healthy for industry diversification (and can be operated competitively).

“To be alert is one thing; to panic is another”. Indisputable!

Perhaps more difficult is to reconcile whether to observe, or to act.

Joe is spot on about the mission-driven benefits that accrue from a publishing programme in surplus. We see that surplus invested in increasingly diverse ways – the traditional conferences and proceeding (and guidelines in the medical space), but also clinical decision support tools, researcher support and services, career support, funding support, advocacy, CME/CPD etc. and much more. These are so vital to advancing research and practice and engaging community.

It is an area where good publishers MUST step up to help articulate the scenarios, the relative likelihoods, the resulting set of choices and make recommendations.

From a personal perspective, I fully recognise the dilemmas. On the one hand there remain very strong fundamental reasons for societies to believe in their publishing income (consistent with the continued and significant growth in research volume and impact); yet on the other, the scenarios one can currently construct around subscription, OA and commercial revenue have broad ranges. Transition is complex, as we are all seeing.

It makes sense to derisk in that environment. And divestment is an option. However, I suspect it is some way down the list options, for at least three reasons:
– Firstly, there are softer degrees of publishing partnership: self-published societies taking their first step into conventional publishing partnerships; those already in partnership moving further towards rebalancing risk (Harvey’s suggestion being one good mechanism).
– Secondly, we would and do encourage actively and positively embracing OA. It is both a service to those authors and funders who favour it and a good commercial and strategic risk-balancing choice.
– Thirdly, diversification through publishing partnership is a gateway to incremental services and revenue for the society. We frequently find our society conversations today are about using publishing leadership to springboard into additional mission-driven (and sometimes paid-for) services: advancing research and practice and engaging community beyond the reading experience. These are activities that seem more productive for the society and the publisher when the partnership remains close.

There is no credible one-size-fits all answer to the challenges of the current economic and policy environment, and every case is unique. The world is changing but not uniformly changing. But I do reflect on one consistent theme: we rarely see a publishing portfolio strong enough to dismiss the drivers of change. We must indeed be alert – and in most cases should also act.

Disclosure: I help manage Elsevier’s society publishing business

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