SWETS Go Bust

We remember well the lucrative STM journals market and the value added role the subscription agents had carved out consolidating subscriptions across thousands of institutions and publishers. It was a classic one stop shop and rewarding for all parties. The likes of Swets and Ebsco dominated and their position looked increasingly secure. Then came the shift to digital and new players who also offered digital consolidation, publishers who wanted to increasingly deal direct and institutions who discovered the power of buying consortia. The market shifted and that was without the ever growing debate on open access and the commercial model that underpinned the market.

This week Swets filed for bankrupcy with its parent company, Swets & Zeitlinger Group B V, being granted preliminary bankruptcy protection by an Amsterdam court and its payment obligations to creditors frozen and JLM Groenewegen appointed as liquidator. The reason for the fall from grace has much to do with the decline in revenues, squeeze on margin and their inability to service their financial covenants. In good times many borrow and to expand, but in bad times the cost of servicing that debt can cause issues and their 2013 Annual report clearly shows many of the warning signs of a company that was still earning, but not at the rate it needed to. Most companies at that stage would take measures to ensure covenants were not breached, or refinance to change their terms. We don’t know what was undertaken, but today that is immaterial as they are bankrupt.

Swets were founded by Adriaan Swets & Heinrich Zeitlinger in 1901. In 2007 Swets acquired by a Dutch investment firm, Gilde and went to open offices in India, New Zealand, Finland, Austria & Switzerland, China and acquire Boekhandel E. Frencken BV. In 2010 they broadened their offer with an e-book catalog and buying options, supplying over 1 million e-books in 2011. In 2011 they acquired the publisher communication services company Accucoms, They had some 572 employees has offices in 20 countries handling subscription services for some 8,000 customers and 800,000 subscriptions in some 160 countries. (see swets.com) 

How much publishers have lost is not clear, neither is the position of digital services to institutions, but Swets demise will have a big impact on those who relied on that consolidation and alternatives may be around, but as they say. ‘once bite, twice shy.’ Some major publishers have already issued notices some stating that they have not received any 2015 subscription payments for 2015 from Swets and inferring that there may well be money in the pipeline.

The STM Journal market is essential for the dissemination of research and information and has long been a moral and commercial battleground, but it is changing and being challenged not just by academics and institutions who want a better deal, but also by what are often the primary funders – governments. 

Update from The Bookseller 10th Oct 2014: Publishers will soak up the costs...

Swets UK go into Administration : The Bookseller 14/10/14 

What do you want to call it?

Some of us have always struggled to see textural works as books or journals and remember the shock and horror of many when all works were first referred to as ‘product’ or worse still ‘stuff’. But the reality is that it is hard to keep these fine lines of definition when the works themselves are being digitally exploded. Books have always come in many formats, or renditions and often belong to a series or have associated works. Today there are now many more digital formats and as with training course packs and reference works, they are now also being fragmented within the works themselves. Journals were always broken down into issues and articles but in the online world the referential linking to supplemental information is very real.

Ingram Digital Group, and Swets, a leading worldwide subscription services company, have announced a joint initiative which combines the features of Ingram’s MyiLibrary and Swets offers, to provide organizations a single access interface to manage both their journal subscriptions and eBooks.

It is clearly a step forward in breaking down the demarcation barriers between subscription and purchased product and the article and book worlds. We also see others such as Cengage (previously Thomson Learning EMEA) starting to combine their article and book offers within services such as BizEd Premier. Others, such as in the travel sector, are starting to combine multimedia not as an afterthought, but into the original design and development. We are clearly entering the world of stuff or whatever we want to call it.