Today, I want to introduce a scenario that I believe should be modeled out by strategists, both in the publishing and library communities. In introducing this scenario, I want to underscore that I do not believe it to be inevitable, nor do I wish to advocate for it. But part of my job is to wonder about the future and to identify some scenarios that can inform planning in our sector. One of the scenarios that I have been considering more and more is a major consolidation among humanities and social sciences (HSS) publishers.
In this piece, I focus primarily on consolidation among the US, UK, and EU commercial primary publishers. In this segment, consolidation is pursued largely through market-driven acquisitions and strategic partnerships. The same market factors that I discuss below will equally impact not-for-profit HSS publishers, but they may not wish, or may find it difficult, to consolidate in the same fashion. In some ways, though, this analysis may be of greatest importance for those that will find it most difficult to lead.
As open access has snowballed, particularly in Europe, academics and publishers have raised substantial questions about whether the HSS fields, and the humanities in particular, have a mechanism to keep up. Here at the Kitchen, we’ve published a number of commentaries on this issue over the course of time, including from such leading lights as Jasmin Lange and Karin Wulf. HSS fields are more book focused, and in general they remain more reliant on fees to read, as compared with STEM. There is no sense of clear market leaders in HSS, like an Elsevier or Springer Nature, nor is there a major innovator that is proving disruptive like MDPI.
Among the major commercial houses, the flight to scale has already largely been completed, certainly for STEM lists. A series of major acquisitions and mergers, such as of Academic Press and Cell Press by Elsevier, of Blackwell by Wiley, and between Springer and Nature, resulted in the large publishing houses we know today. The largest publishers have STEM lists of a magnitude that, on their own, support the kind of global sales footprint that is needed today to negotiate transformative agreements and future models for publishing services, as well as to support a technology infrastructure and roadmap they control themselves. In addition, many of them have extended their umbrella to smaller publishers, in particular societies, which benefit from their scale while further contributing to it, albeit at the risk of various forms of lock-in. While several primarily STEM or diversified commercial houses have achieved this scale, as of yet, no primary HSS publisher has followed suit.
If the HSS marketplace experiences further consolidation, then, depending on market structure and conditions, a number of scenarios may emerge. For example, we could see the disappearance of largely HSS-focused publishers as they seek to diversify their portfolios — or become subsumed within more diversified publishing houses. Or several HSS publishers could combine in an effort to drive to the scale necessary to compete effectively in the emerging marketplace. Whatever the specifics, a consolidation scenario would result in fewer independent HSS publishers.
Consolidation may not yet be inevitable, but it is also not entirely theoretical either. There are some early signals that we may be entering into a period of greater consolidation for the HSS fields, and recent examples in the last year or so bear scrutiny.
Several midsized commercial HSS publishers have completed acquisitions that signal an interest in bolstering their STEM lists and/or building their open access portfolios. Towards this end, the publicly listed Brill last year acquired Wageningen Academic Publishers, which strengthened its portfolio in several scientific fields and added EUR 1 million in revenues. Unfortunately, Brill today seems to be experiencing an unplanned executive leadership transition, which might suggest a strategic pause or redirection.
The privately held DeGruyter has also been in an acquisitive mode. This fall, DeGruyter acquired the open access publisher and publishing services provider Ubiquity Press, which strengthened its ability to engage with the university press sector. And, just a few weeks ago, DeGruyter acquired Mercury Learning and Information, part of a “strategic growth initiative in North America” that also strengthens its STEM portfolio.
While these Brill and DeGruyter acquisitions have yet to receive very much attention given that each is comparatively minor from an overall market perspective, together they represent an important pattern. Each represents an effort to bulk up and diversify, on a quest to pass the threshold that will allow them to remain independent in the long run. To succeed on this quest, these companies will require further acquisitive activity.
A larger purchase, albeit one that has attracted scarcely more community attention, is CIG’s acquisition of Emerald last summer. CIG, or the Cambridge Information Group, is the family-driven investment vehicle that built up ProQuest over the course of many years through a combination of organic and inorganic investment (and more recently sold ProQuest to Clarivate). The acquisition of Emerald represents a new strategic direction for CIG, which now for the first time owns a primary publisher, in this case one with a portfolio that emphasizes business and the social sciences. It should not come as a surprise if CIG approaches its management of Emerald with a willingness to make fairly major long-run strategic investments. If it does so, will CIG take the path of adding additional primary HSS publishing to the Emerald portfolio or will it instead seek to add STEM publishing — or for that matter various types of platforms and services?
SAGE Publishing, with its important social sciences lists, also has the capital resources to fuel acquisitions. It has recently been reorganized into a trust, which is important to a discussion about consolidation, because the intention of introducing the trust structure is “ensuring SAGE remains an independent company.” It is in parallel pursuing an acquisitions strategy of its own, one focused beyond primary publishing.
There are also diversified major houses, which publish a combination of STEM and HSS. These publishers have invested major strategic bandwidth in recent years into incorporating open access into their STEM portfolio strategies. Some of them may see a future in maintaining a diversified model, at least for journal publishing, if they can successfully transition HSS publishing to a business model suitable to an open access environment. Of them, Taylor & Francis is notable, because it also has a major HSS books business, under the Routledge imprint, which may indicate some distinctive considerations. None of the major diversified houses, however, has made any major acquisitions in the HSS primary publishing space of late, nor has SAGE. It is perhaps telling that none of them, if they bid for Emerald, did so successfully.
If acquisitions activity continues and an HSS primary publishing landscape consolidation scenario comes to pass, it will produce a very different market structure, with a clear leader or leaders for this sector. In considering how such a scenario could develop and what some of its implications might be, we can forecast a number of marketplace opportunities and concerns. Here are some of those that I believe would merit scrutiny:
- Some HSS houses could be available for purchase, but there are complexities associated with family and trust ownership as well as public listings. It may be that thinking beyond a traditional M&A mindset and towards other kinds of strategic partnerships would be fruitful. If this were to be the case, who could lead them?
- Few and possibly none of the not-for-profit organizations that focus on HSS primary publishing have the scale and associated access to capital resources necessary to lead on consolidation. Put another way, they are unlikely to be the buyers of for-profit firms. That said, both Oxford and Cambridge have a level of scale that has allowed them to think as platforms and service providers to others. What are the possible impacts on, and responses from, the not-for-profit HSS publishers, both from the broader market dynamics as well as the consolidation scenario itself? Is it possible to imagine deep enough strategic partnerships across not-for-profit HSS publishers (including university presses and scholarly societies) to achieve meaningful sales and technology scale?
- Given the book-focused nature of many of the HSS fields, distribution is an important consideration and there is an argument to be made that certain kinds of consolidation have already taken place, including through GOBI and Amazon, a topic that fellow Chef Joe Esposito and I have examined (along with co-authors) in previous work. Are other forms of consolidation therefore less relevant — or perhaps more needed? And, would consolidators prefer acquisition or partnership targets based on their format emphasis?
- What would the implications of this scenario be for other active participants in the HSS scholarly communications sector that are not themselves primary publishers, for example aggregators and infrastructure providers like EBSCO, Clarivate’s ProQuest businesses, Project Muse, or JSTOR (the latter of which is a service of my employer, ITHAKA)?
- Finally, given the largely reactive concerns in academia and academic libraries to consolidation in STEM scholarly communication and infrastructure segments, is there any form of strategic investment or advocacy that can, from advocates’ perspective, constructively shape the HSS market before the consolidation scenario develops any further?
Are you already engaging in planning for this scenario or interested in doing so? Please drop a note in the comments or feel free to reach out to me directly.