Tea Drinkers, Sandal Wearing Vegetarians and Subscription Agents.
Earlier this month, I attended the Association of Subscription Agents conference in London. It was a bit of a nostalgic trip for me, I’ve only been to ASA once before back in 2011, when the tag line was ‘Recession is the Mother of Invention‘. I was struck by what has remained the same and what has changed since three years ago.
True to form, based on my limited experience of ASA, there were some controversial statements made from the podium, particularly from the keynote speaker Derk Haank, CEO of Springer. Research Information made mention of his unflinching characterization of subscription agents as ‘professional tea drinkers’, questioning their ability to sell new products effectively. It has to be said though, that the colorful analogy that raised most eyebrows in the hall was his comparison of OA advocates to ‘sandal wearing vegetarians’, which offended not only some of the librarians in the room, but many of the vegetarians as well. If you have time, have a read of the Storify. You really can get a sense of how festive the mood got during Haank’s keynote.
What had changed was that the venue, being at BMA house, was a lot bigger and a lot fancier than three years ago but more importantly, a previously key player in the subscription agency world was notably absent. The SWETS bankruptcy was no elephant in the room, it was directly addressed several times, particularly by Paul Harwood, General Manager of EBSCO Information Services (and former Managing Director of SWETS UK), who spoke on the first panel. Harwood claimed that anybody who was surprised by the bankruptcy simply hadn’t done their due diligence.
Harwood’s comments raise an interesting, if somewhat delicate point. In a previous two part series here and here on the Perspectives Blog, I interviewed several of my colleagues at Digital Science about the lead up to and fall out from the bankruptcy. We talked about some of the approaches that other subscription agents have adopted to stay relevant, but we acknowledged that we don’t really know whether SWETS ultimate demise was driven by strategy failings, financial management issues or something else entirely.
What remains clear is that the traditional sales agency model is in trouble. As Haank pointed out, subscription agent market share of journal revenue has fallen from 59% to 40% since 2010. Despite the fact that overall industry revenue is growing year on year, subscription agents are being disintermediated and that puts them under threat. The industry is changing and just as consolidation will likely continue among publishers, there is a good chance that SWETS won’t be the last subscription agent to hit the buffers.
So what do agents need to do in order to survive? During the conference, an unnamed subscription agency executive stood up to complain that while both libraries and publishers claim to value their service, neither seem willing to pay for them. She was echoing the concern that I often hear that the margins are getting thinner. Her question was simple, how can agents get either their suppliers or their customers to pay more for their service? To me, the answer is simple: you can’t. If the market has changed and won’t supply subscription agents with a living, then agents need to change what they’re doing and provide something that the market finds more valuable.
While some agents have been working in that direction and bolting on value-adds, the ones that will ultimate thrive will have to make tough decisions about their strategy. My colleague Betsy Donohue said it best to me the other day,
‘The intermediary of the future will create and sell technologies that solve real problems for multiple stakeholders in the industry thereby creating connections within it. New sales channels will emerge organically from those connections, funded from a variety of budgets.’
I’ll finish by commenting on one final thing from the keynote. Haank said that he doesn’t want agents to disappear from the market. He urged agents to figure out how to stay in business so that publishers can continue to ‘outsource the back office’. Clearly, there is still a need for intermediaries but the question now is whether subscription agents are capable and brave enough to pivot or if a new type of company will emerge to fill the space?