The professional publishing landscape looks a bit different heading into 2016 after a busy 2015 that brought some unexpected headlines. The year's top stories centered on changes and challenges affecting the market's most recognisable players.
Ever since its 2007 merger, Thomson Reuters has held probably the broadest portfolio of professional publishing and information businesses. The company competes in legal, tax, business and science publishing. However, the merger's anticipated payoffs, particularly in the brokerage and financial information sector, have not materialized. The company announced in November that it would explore strategic options for its Intellectual Property & Science business, which provides tools to help scientists find, use and share scholarly articles and data. Its Web of Science research platform is an industry standard.
While the unit remains profitable and growing, increasingly these scientific and technical (S&T) workflow tools are being developed by small players from research community itself — a phenomena that didn't exist when Thomson first acquired the businesses that make up the unit. Intellectual Property & Science, like the Healthcare unit sold in 2012, is also not seen as supporting the objectives of Thomson Reuters' other global businesses. Intellectual Property & Science's revenue was $1 billion in 2014. Simba estimates about $725 million of that is scientific and technical publishing. Analysts anticipate that the business could be valued at more than $3 billion, or more than 10 times EBITDA (earnings before interest, tax, depreciation and amortization).
If and when Thomson Reuters sells its Intellectual Property & Science business, it will mark the exit for a company that has consistently held the No. 2 spot in Simba Information's S&T competitor rankings. The new owner will find itself immediately knocked down to the third spot due to one of the year's other big stories.
In May, regulatory authorities approved the merger of Springer Science+Business Media and the majority of Macmillan Science and Education. The new company called Springer Nature is projected to generate $966 million in S&T revenue and vault into the No. 2 position.
Meanwhile, Elsevier, the market leader in S&T publishing, was in the headlines throughout 2015 as open access advocates continue to stage protests against the company and its pay walled business model. In September, all six editors and the entire editorial board of the linguistics journal Lingua resigned because the publisher would not take steps to make the journal completely open access. Elsevier defended its position by pointing to range of open access options available at Lingua and committed to moving forward under a new team.
The publisher had already drawn the ire of open access advocates in June by filing lawsuits against the websites Libgen and SciHub, which upload PDFs of copyright protected articles for free. Even an attempt at altruism brought Elsevier grief, as in September when it donated 45 free ScienceDirect accounts to Wikipedia editors and open access crusaders balked that it could turn Wiki's science articles into a "front page" for Elsevier's paid content.
In other contentious news, book authors who sought to take on Google for scanning millions of copyrighted works had their hopes dashed in October when a three-judge panel of the Second U.S. Circuit Court of Appeals unanimously affirmed a lower court ruling and dismissed the suit. The court ruled Google's scanning wasn't infringement because what the company makes viewable online is so limited. Google allows people to search the texts of the copied books, but users see only tiny snippets at a time. The case stretches back to 2005.
Another major publisher announced its plans in 2015 to return to the public markets. News of McGraw-Hill Education's planned IPO broke in April, but the company took until October just to announce the underwriters. The company still has not chosen an exchange, but it plans to list under the symbol MHED.
Should the offering be completed, it is expected to value the company at between $5 billion and $6 billion, including debt.
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