DIVERSIFICATION AND EXPANSION: THE 1970s AND 1980s
Crisis
In the late 1960s, things stopped going quite so well, not only for Elsevier,
but for all scholarly Dutch publishers. An unfortunate confluence of events
conspired to create a crisis for the Dutch publishing industry. The trouble
began in the late 1960s when everywhere in the world, starting in the U.S.,
universities ceased expanding, reducing the rate of growth in the demand for
scholarly publications. At the same time, labor costs in the Netherlands rose
precipitously and once inexpensive books and journals from Holland became
costly. In response to the rising cost of books and journals, libraries
expanded their interlibrary loan (ILL) programs as a way to compensate for
their inability to purchase complete inventories of scholarly titles. These
expanded ILL programs were facilitated by the phenomenon of photocopying,
making Xerox® a surprise new factor in an already tight market.
Thus
by the beginning of the 1970s, older expectations of the continuous expansion
of Dutch international journal production were significantly curtailed — and
as a result the viability of newer journals was threatened. Whereas in the
early 1960s a journal could break even in three to five years, by the mid-70s,
a maturation period of seven to eight years became more normal. The prognosis
for the future growth of the companies that published these scholarly journals
was not as good as it had seemed a decade earlier. Responding to the
industrywide crisis, a number of scientific publishing companies joined
forces, choosing to pool resources rather than continue running expensive
individual operations. Thus began a decade of mergers for Elsevier.
Mergers
The first came in 1970 when Elsevier and North Holland merged, a natural
partnering of two friendly and complementary businesses. Next, in 1971, came a
merger with Excerpta Medica an old and innovative
medical abstracts company. Excerpta Medica, an international medical
publishing company in business since the 1940s, was currently in the process
of creating an electronic database that would contain abstracts of all medical
literature published in all languages. That database, born of
neurosurgeon-turned-publisher Pierre Vinken’s personal notes, was ultimately
to become EMBASE,
a product which Elsevier launched in 1972 in its first venture into the field
of information technology. The work of Excerpta Medica was a good fit with the
work of Elsevier and North Holland, and as the newly named Associated
Scientific Publishers, the three merged companies set out to be the premier
provider of international science and medical information.
The
most significant expansion effected by the newly merged science group occurred
in the U.S., where a large-scale foray into clinical medical publishing put
the company on the map in American medical publishing, expanding the scope of
the business as a whole. In the late 1970s Elsevier won its first contracts
for large medical society journals, including the journal Gastroenterology,
the most highly cited journal in the field of gastroenterology and hepatology.
The production of such journals represented a significant shift of scale for
Elsevier, as well as a change in market. Whereas previously the company’s
largest journals — such as Artificial
Intelligence, Brain
Research and Nuclear
Physics— had circulations of approximately 1,500-2,000, the
company’s new medical society journals had circulations ranging from 15,000 to
almost 30,000, representing a sizeable change in the scale of production for
Elsevier. Furthermore, these large-scale journals sold advertising space to
pharmaceutical companies, a new working challenge for Elsevier but also a new
source of revenue. Taking on such challenges built international recognition
for the Elsevier name in the world of clinical medicine.
Expansion
The success of the clinical medical publishing venture encouraged further
confident expansion and a new emphasis on volume growth that made for heady
times at the growing company. Throughout the decade, the company would expand
in multiple directions, establishing its presence in many new geographic as
well as publishing arenas. For example, in 1984, Elsevier established its
French office in Paris, having successfully negotiated the rights to publish
the journals of the renowned Institut Pasteur. Today, the French division of
the company is best known for its publication of the Encyclopédie
Médico-Chirurgicale, a familiar multi volume series that
is subscribed to by almost half of France’s 200,000 French doctors and
specialists, and that can be seen in the background of many French films and
TV series featuring doctors’ offices.
The optimism of early 1980s expansion was also reflected in the company’s
willingness to fund experimentation. During this period, the company developed
a "let a thousand flowers bloom" policy, encouraging many small exploratory
electronic projects in the hope that out of all that experimentation would
come some real, useable, innovation. The "let a thousand flowers bloom" policy
reflected the exploratory and scientific bent of Elsevier’s core personality
and would ultimately prove very successful — even if most of the ideas did not
bloom immediately.
Information Technology
Given the scientific background of so many Elsevier staff, there was, not
surprisingly, an early awareness of developing information technology and a
strong sense of its importance. The company was quick to imagine the promise
such technology held for the publishing business. As early as 1979, responding
to the need for an article delivery system that could compete with Xerox and
interlibrary programs, Elsevier brought together a group of publishers for an
exciting and novel electronic journal distribution project — Adonis. Adonis
was the company’s first attempt to deliver documents, via new technology,
faster and less expensively than anyone else. Adonis was to be the information
delivery system of the 1980s and science publishing’s greatest new innovation.
Unfortunately, the idea didn’t work as well in practice as in theory. The
earliest technology developed by the Adonis project proved far more expensive
than prevailing manual document delivery systems — and too expensive for
customers. When finally, almost a decade later, the cheaper alternative of
CD-ROMs for PCs became available, the Adonis project was reinvigorated.
Unfortunately however, the impracticality of long runs of journals on CD-ROMs
also proved to be commercially unattractive, and the ambitious and expensive
Adonis project was finally abandoned. In spite of the project’s ultimate
failure, however, the early IT experiments it initiated (along with those
developed by others) would eventually evolve into the systems used today on
personal computers, proving that the investment was well worth it in the end.
Fluctuating Prices
Nobody knew this at the time, however. The investment in new technologies
proved frustratingly slow to yield results and by the end of the 1980s,
Elsevier had little to show its customers for a decade of work on information
delivery systems.Worse still, the company was facing a public relations crisis
in the U.S. as a result of the fluctuating exchange rate. As the U.S. dollar
lost ground against the Dutch guilder, the cost of Elsevier’s international
journals to its U.S. clients rose. Pricing journals in the currency of the
country of publication (Dutch guilders, U.K. and Irish pounds, Swiss francs,
etc.) meant that the customer bore the risk of exchange rate fluctuation, and
the fluctuations were great from year to year. This situation was ultimately
remedied when the company began pricing in the local currency of its three
major customer groups (U.S. dollars, euros and yen). Until such remedies were
instituted, however, librarians blamed the company for their rising purchase
costs, a problem that was compounded by the tightening of library budgets.
This tension with science publishing’s greatest ally, the librarian, was a
demoralizing new phenomenon for the company. As the company moved forward into
the 90s then, it faced some key new issues — namely how to best serve
customers and librarians in times of strained library budgets and rapid
technological change.
