Q&A: ERIC VAN AMERONGEN

An agent's view

Q: Your main business is your subscription agent, Swets Information Services. What do you see as the agent's role in STM publishing?
The traditional role of the agent in the publishing industry has been to solve the issues of relationships between many and many. Libraries deal with many players, often more than 1,000 publishers. Publishers, in turn, deal with many libraries.

We offer a number of services that streamline this process; for example, by limiting the number of invoices, and solving multi-currency issues. The agent also checks that the customer receives what they pay for, and manages issues such as subscription renewal.

Some customers appreciate a weekly shipment from a single source and, for them, we collect the relevant journals and send them in one shipment. This approach is usually chosen for logistical reasons, but it may also have a price advantage. The majority of customers, however, opt to have publishers send journals to them directly.

If librarians make contracts directly with publishers, then it is the publishers' responsibility to supply them with the material. If the contract is with an agent, then it is the agent who has an obligation to supply the journal. This can lead to legal complications if the agent cannot supply a particular journal issue because the publisher has not published it, but this is the model that has existed for the last 100 or so years. In the 'e-world' things are even more complex. The role of an agent is essentially no different, but more complicated.

Q: How has last year's collapse of the major subscription agent, Rowecom, affected the industry?
Rowecom had been in a situation of near-collapse for a long while, and was kept alive by some major players. For this reason, it should not have come as a surprise to those players that it collapsed. However, it did cause a shock to Rowecom's customers and the publishers it served. And since this happened, libraries have become much more sensitive about who they do business with. In the past, it was normal to pay in advance for journals subscriptions, but people have become more reluctant to do so now, and often request additional guarantees that they did not ask for in the past. On the other hand, the collapse has created a clearer position in the market, with just two major players (although there are many more minor ones).

We were involved in negotiations to take over assets from Rowecom, as were Ebsco (the other major subscription agent). However, we decided to withdraw from negotiations for business reasons (and Ebsco took over Rowecom's business).

I think it is highly unlikely that a new third major player will emerge, because it requires an in-depth knowledge of the industry and good relationships with many publishers. In addition, a significant part of cash flow today is from print journals, but that is decreasing, so it is unlikely that a new player would find this an attractive sector to get into.

Q: In the past few months Swets & Zeitlinger has sold all its publishing businesses, whilst your main competitor Ebsco still publishes STM journals. Why are your strategies different?
I became CEO just under two years ago. At that time (as now), more than 90 per cent of our revenues came from being a service provider. However, we were also a publisher ourselves. I felt that we should concentrate on one or the other. I felt very uncomfortable about having STM publishing and competing against our customers. There were options to buy other publishing activities and grow that part of our business, but we decided instead to focus on being a service provider. It is difficult to combine a desire to be a reliable, neutral player with being a significant player in publishing, and I think that this business model is risky.

Of course, it depends on the size of the business. Our publishing activities were small, so we were not a seen as a big threat to major publishers. However, if we had bought some of the major businesses, such as Kluwer Academic Publishers, that have become available over the past few years, then we would have become more serious competition to the likes of Elsevier, and that would have harmed our agent business.

Q: What has been the effect of the weakness of the US dollar?
The low value of the US dollar impacted all of us. For Swets and Zeitlinger, this has been offset by us having a significant base in the US, and significant sales of US material. This means that our balance of operations is OK. However, we do report our financial results in euros, so our overall revenue has gone down significantly.

Fortunately, most important STM publishing is unique. If you publish a must-have journal in Europe and invoice in euros, then US libraries must buy it, regardless of the exchange rate. However, if a library spends an increased amount on one journal, then it is left with less money to spend on others.

Q: How is the migration to electronic delivery affecting the STM publishing model?
The Internet does not have a significant impact on the information that is produced. What is changing is the way that it is packaged. The internet world will change the way that we work as agents, because there will be no physical shipment. Instead, it is a purely digital shipment.

The Internet also opens up other opportunities for agents. For example, we offer subscriptions to databases. We also offer services through our Extenza division, which helps publishers, amongst others, to put their content onto the Internet.

A significant amount of information is available online. Almost all of the largest publishers have content online. However, the majority of customers today still order print-only, or print and online subscriptions. The minority buy online-only, but this minority is growing rapidly, particularly in the corporate world. And quite a few university libraries are also starting to do this now. We believe that, by around 2007 or 2008, more than 50 per cent of STM content will be acquired electronically.

Q: Will traditional relationships and pricing models change with increased online distribution?
More and more deals are being done directly with the publishers. In particular, there is a trend towards big deals with libraries. These deals leave only a limited role for agents like us. However, some libraries in the US are objecting to this way of doing business, and there is a bit of backlash against the publishers. In addition, publishers are very likely to outsource part of their work, such as rights management, to current agents. The industry could develop towards a situation where agents become service providers to publishers and to libraries separately, and invoice each group directly.

Eventually, the whole notion of journal subscriptions could disappear. Customers will subscribe to subject areas, rather than individual journals. The problem for this is that very few companies are repackaging significant amounts of content at the moment, but this will change in the future.

The whole pricing mechanism is also changing, and the agent will play a significant role in this. In the electronic world, it is possible to buy a single journal or article, so there will be different pricing models to cater for this. User statistics could also become the basis for future pricing.

It is very likely that the publishers will drive this change, under pressure from end-users, but agents will support this process and be enablers.

Q: Does the Internet threaten traditional STM publishing?
Open access, where authors publish their results for free on the Internet, is a very interesting trend. If it were to really take off, then it would have a huge effect on publishers. Whether agents would disappear too, or whether they would still have a role, remains to be seen. Open access would still require a huge amount of administration, which the researchers are unlikely to want to do themselves, so this is where agents could help.

Although there is very little volume available in open access at the moment, it is starting to see some success in medicine and some other disciplines.

The basic value that publishers give to papers is the peer review process, which guarantees quality. Open access does not have a peer review process embedded in the same way, so there is currently not a similar guarantee of quality. However, if groups of scientists could find a solution to this issue, then it could change the industry hugely.

biography

In joining Royal Swets & Zeitlinger, Eric van Amerongen has returned to his publishing roots. Between 1978 and 1981, he worked for Kluwer in the Jurisprudence Group, and became deputy publisher at WEJ Tjeenk Willink, one of Kluwer's subsidiaries.

After this, he moved into technology industries for a number of years, where he held senior management roles for the Thales Group (formerly Thomson CSF), Alcatel, and ITT Nederland. Most recently, he was president and chief executive officer for Europe, the Middle East, and Africa, for US telecoms giant, Lucent Technologies.

'My experience gained at Lucent, Thales, and Alcatel gives me valuable and perhaps quicker understanding of the IT component of our business, which is an extremely important enabler for a logistics-oriented industry like ours,' commented van Amerongen.

However, he added that experience in running an international and multi-cultural organisation is just as important as specific know-how in the technology field. He believes that having an understanding of STM publishing also helps. 'A combination of all these experiences gives a solid base, but I still have to admit that our business is a special one, which requires thorough understanding of the various process elements that drive it.'

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