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Re: Information Access Alliance Takes Action on Proposed Wiley Acquisition of Blackwell

The library community is understandably concerned about the acquisition of Blackwell by John Wiley. Some perspective:

The chatter among people who are involved with the buying and selling of companies is mostly to the effect that Blackwell did not fetch a premium price. It sold for 2.7 times revenue, a discount to the going market price of 3-3.2 times revenue. (Revenue is not profit, by the way.) Why the discount? Perhaps because Blackwell's journals business consists in large part of society journals, journals that Blackwell publishes admirably but does not own outright. There is leverage here for the library community.

While nothing is going to stop various organizations from working to prevent the merger on antitrust grounds, with a Republican administration in office, one that approved the acquisition of Web CT by Blackboard, it seems unlikely this deal will be stopped. (What European regulators do is another matter.) Activists, however, may find it more productive to lobby society publishers to press the combined companies to hew to progressive trade practices. These publishers, after all, have other places to go with their journals when the currect contracts expire. The point is not that libraries should not fight for their interests; rather the point is that the best fight is a winnable one, with clearly defined objectives. Think about Iraq.

As a friend noted to me, a principal driver for these mergers is the need to get more influence with library consortia, whose fundamental structure favors the largest publishers. Consortia commonly start a year's negotiations with the biggest players, get the best deal they can, and then work down the list of vendors from there. By the time small publishers get a hearing, there is no money left. Consortia could alter the economics by reversing the process, by starting with the smallest publishers. This assumes that libraries want small publishers, though I have not seen any evidence of that.

To state this another way, the mergers of publishing companies (which will continue) is a direct, rational response to the structure of the marketplace, including the purchasing patterns of academic libraries. To influence the mergers, change the structure of purchasing.

And let's not forget that Wiley and Blackwell are both outstanding publishers. Surely there is something to be said for that.

Joe Esposito


On 12/5/06, Liblicense-L Listowner <liblicen@pantheon.yale.edu> wrote:
Of possible interest.

---------- Forwarded message ----------
Date: Tue, 05 Dec 2006 15:44:58 -0500
From: ARL Communications <commlmgr@arl.org>
To: Activities and Programs of ARL <ARL-ANNOUNCE@arl.org>
Subject: Information Access Alliance Takes Action on Proposed
    Wiley Acquisition of Blackwell

INFORMATION ACCESS ALLIANCE TAKES ACTION ON PROPOSED WILEY ACQUISITION OF
BLACKWELL

John Wiley and Sons recently announced its plans to acquire
Blackwell Publishing, a publisher of scientific, technical, and
medical (STM) journals, for a price of $1.08 billion. This
increase in concentration in an already concentrated market is
cause for substantial concern on the part of the library
community. The combined company will control more than 1,200
titles, many of them scholarly society journals.

The Information Access Alliance (IAA), representing the
Association of Research Libraries (ARL), the American Library
Association, the Association for College and Research Libraries,
the American Association of Law Libraries, the Medical Library
Association, SPARC, and the Special Library Association, wrote to
the US Department of Justice on November 29 asking that they act
to issue a second request for information from the two companies
and review the market and the merger. The IAA letter to the
Department of Justice is available on the Web
http://informationaccess.org/wiley.blackwell.pdf.

The IAA is deeply concerned that this transaction will exacerbate
market dysfunctions and result in further reduction in access to
critical research information that fuels the entire higher
education and research enterprise. Both John Wiley and Sons and
Blackwell Publishing currently use bundled pricing models; a
recent study by ARL gathered data from its member libraries
documenting that bundling practices reduce customer choice, hurt
small publishers, and create barriers to entry (see
http://www.arl.org/newsltr/245/bundle.html).

Information on publisher mergers and related antitrust issues is
available on the Information Access Alliance Web site
http://www.informationaccess.org/.

 :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
Kaylyn Hipps
Managing Editor, Web Content
Association of Research Libraries
21 Dupont Circle NW #800
Washington DC 20036
tel: 202.296.2296 x103
fax: 202.872.0884

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