ACQNET v6n003 (January 5, 1996) URL = http://hegel.lib.ncsu.edu/serials/stacks/acqnet/acqnet-v6n003 ISSN: 1057-5308 *************** ACQNET, Vol. 6, No. 3, January 5, 1996 ======================================== (1) FROM: Ron Ray SUBJECT: Charleston '95, Part 2 (124 lines) (1)-------------------------------------------------------------- Date: Wed, 06 Dec 1995 15:57:00 -0800 From: Ron L. Ray (Univ. of the Pacific) Subject: Charleston '95: Part 2 The afternoon of the first day was devoted to two panels of library vendor CEOs elucidating what has seemed to some in the library world a rash of takeovers, mergers, acquisitions, and failures among their suppliers. As discussion facilitators Fran Wilkinson (Univ. of New Mexico) and Tony Leisner (Consultancy in Strategic Marketing) pointed out in their introduction, of 30 companies identified in Melcher in 1972, only 5 are still around and even those are significantly altered manifestations of their former selves. I feel little overwhelmed trying to construct a orderly report of what was a fairly unstructured set of panel responses to prepared questions, so I'll limit myself to what seemed the salient messages coming through. First, to identify the first set of panelists: Bryan Ingleby (Dawson), Gerald Garbacz (formerly of Baker & Taylor), Jane Burke (formerly of NOTIS, now of Endeavor), and Ward Shaw (CARL). It didn't take long for these CEOs betray their puzzlement that anyone would ask corporate executives why their companies were engaging in what's generally viewed as fairly normal behavior for business entities; namely takeovers, mergers, acquisitions, and even failures from time to time. Moreover, I think these CEOs were perplexed, if not dismayed, that this line of questioning was coming from the acquisitions sector of the library - the very sector that prides itself on being at the business end of the library and the most attuned to market and corporate forces operating in the library and information industry. Far from viewing recent corporate realignments as alarming, the CEOs viewed them as a sign of healthy adjustment, particularly given the volatility and robust stream of developments in the information industry. They primarily saw mergers and acquisitions as positive strategic tools that often foster a healthier business climate. Using acquisitions and mergers to bulk up a company for increased market share and cash flow can have a stabilizing effect on the company. It's true, they can be misused also, as in the reported case of a vengeful Robert Maxwell buying a company just for the pleasure of firing someone there he disliked. The CEOs agreed we'd likely see an increase rather than stabilization or a decrease in corporate realignments among companies familiar to libraries. Mergers especially are likely, not only as a hedge against the volatile environment, but also for reasons such as there being more ILS vendors than the market can bear. Secondly, bigger players seldom move into a new marketplace without an acquisition. Corporate acquisitions serve as an entree to strategic moves. One panelist predicted more public/private partnerships. Corporations may have capital to invest but don't know the terrain for a new product or service and may look to universities or even libraries for expertise. Burke, in particular, thought large information providers are becoming aware that libraries are experts when it comes to applying organizational principles to a disarray of information, i.e. the Internet. Ward concurred that libraries with their vendors have built some of the largest public access systems in the world; corporations could view libraries as a huge distribution channel; their success in putting screens of information in front of people on the street is matched nowhere else. Ingleby dissented from this view, in reference to the giant Japanese corporations who think of electronic information as their natural domain and are unlikely to give libraries even the slightest notice. It's not clear from my notes or memory how this happened, but the first CEO panel concluded their discussion not with summary statements about mergers and related trends, but by urging librarians to be more assertive and politically savvy in competing for funds and public support. Libraries are in a strategic position to educate the public in use of the Internet and digitized information, but are in danger of squandering that advantage if they don't assert themselves more effectively to get the necessary public recognition and support. As I've suggested, I think these CEOs were surprised that librarians were seeing threats in what the CEOs viewed as business as usual, and took this opportunity to try and embolden their compatriots in the library world. The second panel of CEOs picked up on this theme and weren't far into their discussion before they were digressing to encourage librarians in the audience to get more marketing savvy and skills for the sake of their libraries' health and survival. It wasn't strictly a digression; the question had been put to the panelists - Mike Markwith (Swets), Dan Tonkery (Readmore), Frans von Eysinga (Wolters Kluwer), Jim Ulsamer (Baker & Taylor), and Fred Philipp (Blackwell North America): "What should students in library schools be learning today?" Better rounded management skills, less specific format orientation, and more on handling information processes. Also, especially, including marketing skills is how these CEOs would improve the library school curriculum. The second panel affirmed another theme from the first panel, namely that there is no clear vision of the future for vendors or subscription agents. The environment is changing too fast and from a corporate point of view, mergers, acquisitions, buyouts, and takeovers are effective means for the negotiating the terrain in the near term. Failures are not so effective, but to be expected given the unfamiliarity of the terrain being negotiated. Asked about the future of serials publishing, the panel shared views from harsh to positive. Tonkery noted the decline in overall number of subscriptions, down 4-6% a year in response to price escalation. Serial publishers won't be able recover costs if electronic distribution shifts unit delivery and prices from the title to the article level - publishers have been packaging too much "junk" and article usage won't produce the current level of subscription income. Markwith dissented: "Junk is junk, but the history of junk is scholarship." As far as vendor survival goes, with the threat of publishers going directly to end-users, panelist views were upbeat since the requisite technology is still in infantile or test stages, allowing vendors time for strategic planning and adjustment. Philipps saw vendors' close connections to libraries as having survival value; the value-added services vendors provide along with goods to libraries protects them, to some extent, as a distribution channel. Lastly the CEOs refuted the notion that there is a trend toward European-centered holding companies as far as publishing or other information provision services. Nor did they see arrangements between European and U.S. vendors as any significant issue of concern. They referred to the complexity of sorting out national affiliation, citing the instance of a prominent European publisher being owned by a U.S. investment company. These two vendor CEO panels ranged more broadly in their discussion than I've reported here. I encourage any Charleston attendees who have more in their notes to share them on ACQNET, particularly any topics that we should be exploring further in our discussions here. ****** END OF FILE ****** ACQNET, Vol. 6, No. 3 ****** END OF FILE ******