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Another seismic shift

26 May 2003

The purchase of BertelsmannSpringer by buyout specialists Candover and Cinven has brought about another seismic shift in the rapidly-changing world of scientific and academic publishing. The new owners will pair the huge German publisher BertelsmannSpringer with recently-acquired Kluwer Acadmic Publishing to create the world's second-biggest academic publishing conglomerate, with a turnover of about £628 million ($1,020m). Between them the two publishers have around 1,400 academic journals and publish around 5,000 books a year

Candover and Cinven plan to invest heavily in digitising material and to deliver this online through their Internet platform. This will enable them to compete directly with the world's largest academic publisher, Reed Elsevier, which has reaped enormous benefits by investing £750 million ($1,218m) in setting up to deliver its material online. This investment meant that the company was able to achieve Internet sales of £1bn last year, around one-fifth of the total. It has bounded ahead of its rivals, making a pretax profit of £289 million ($469m) in 2002.

Increasingly, academic publishing - and particularly journals - seems to be where the money is to be made in publishing. Unlike general publishing, academic publishing is wonderfully stable and the revenues, based largely on subscriptions, are relatively predictable. The Internet provides an extremely effective, fast and cheap way of selling the journals to the growing international academic market. But this is a business requiring scale and access to massive investment.

The Internet has had the democratising effect of opening up communication directly between authors and their readers, and making small-scale publishing more feasible. But it has also created huge opportunities for big publishing companies, especially those with captive markets of academics and a big 'stable' of journals which are essential reading.