Defying Amazon: how academic presses can profit

Synergy can help university publishers cut prices, argues Felipe Fernández-Armesto

July 3, 2014

“Put it like this,” the entrepreneur said when I asked how he made millions of pounds out of building and managing halls of residence. “The average student drinks four cups of coffee a day. The average profit per cup is 50p. I make £2 a day out of every resident even before counting rent or exploiting all the other opportunities for screwing cash out of the little chickabiddies.” He said it smilingly – but was the smile ironic or vulpine?

“It seems,” I suggested, “like running a hotel with guaranteed occupancy rates, or a prison without the security costs.” He agreed.

I understand why top brass may want to farm out tiresome tasks in order to concentrate on what I suppose management-speakers call “core business”. I realise that universities without large cash reserves may have to forgo future revenue to enable big capital projects. But there seem to be no really effective money-spinning projects in the dim administrators’ purview, apart from hawking satellite campuses to Arabs or East Asians, and pinching professors’ copyright on their inventions – which is a surefire way to alienate boffins and drive them into better-paid employment. There are fortunes to be made from the huge academic marketplace. Why do universities leave so much of it to outsiders?

I get resentful when I read about Amazon and the huge discounts that tentacular corporation extracts from university presses

Of what my fellow professors do, learned journals and monographs are the output I consume most. I get especially restive, therefore, when I think about the middlemen’s profits and the academics’ impoverishment. I don’t mind if private publishers muscle in on the action, if – as few do – they behave honourably, pay decently, maintain standards and forbear to arrogate copyright. I get resentful, however, when I read about Amazon and the huge discounts that tentacular corporation extracts from university presses and small, private academic publishing houses. In the old days, when shops were the only means of distributing wares, it made sense to pay out pip-squeakingly large proportions of potential profit to get a product into the marketplace. Those days ought to be over.

Amazon is, I suppose, an efficient distributor, but it does not offer much to university presses. They have their own warehouses and distribution systems. They have their own websites. E-publishing and printing on demand are already parts of what most of them do. They have privileged access to their own markets. They can publicise products directly to end users. If they organised operations effectively they could undercut or cut out middlemen and still make a profit. They lack at present only three crucial advantages, which Amazon has pretty nearly engorged: market share, gigantic economies of scale and “consumer recognition”. The last of these is like appetite: vient en mangeant. With a bit of imagination, and relatively little capital investment, the others are attainable.

We need a consortium of academic presses big enough to exercise a near-monopoly of sales of new titles via the web. For publicity and marketing purposes there is a long tradition of collaboration between small, non-profit presses; but none has ever been powerful enough even to challenge the traditional book trade. Whenever a lot of mice set out to bell a cat, a big problem arises: someone has to take the lead. If visionaries capable of taking the initiative emerge, determined to galvanise presses into cooperation, with the clout to defy Amazon, they will have to overcome two obvious further obstacles.

First, the really big players among academic presses – such as Chicago, Oxford, Yale and Cambridge – have big trade lists and a lot of educational and reference works that sell way beyond the limits of the academic marketplace. They will have to face a period of transition in which they lose an important outlet before the consortium establishes itself as a resource for the general public, schools and education authorities. Persuading them to take the risk, or to make their academic divisions independent of the rest of their output, will take art that may be beyond any visionary. In time, however, trade publishers will surely want to join an originally academic consortium, with advantages all round.

Second, the financial basis for collaboration will need sensitive negotiation. Should costs be shared according to the size of the publishers’ lists or the volume or value of their sales? Or should profits be distributed according to shares in capital costs? How should presses that are not shareholders be admitted to the scheme? Low costs will make the problems solvable. Although individual presses may need more distribution personnel, the consortium will not need warehousing or distribution facilities of its own, only a website capable of taking and passing on orders.

Amazon justifies aggressive discounting policies by claiming that its service to the customer is relatively cheap. If you want to buy a popular title, I daresay the claim is true; but only a sliver, if anything, of the discount gets passed on to the buyer of academic texts. Presses are forced to charge high prices in order to satisfy Amazon’s appetite for discounts. An academic bookselling consortium could cut prices, maintain reasonable terms for good, old-fashioned bookshops and make money for university presses to reinvest in scholarship. That’s not just a win-win situation, as those management-speakers might say, but a win-win-win one.

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