ATG Original: B&T, EBSCO, YBP…..More Changes To Distribution Channels

Nancy Hertherby Nancy K. Herther

Library book distribution channels were reconfigured February 20th with the announcement from Baker & Taylor (B&T) that EBSCO  would be acquiring both YBP, formerly Yankee Book Peddler, and their GOBI book acquisition system – the leading book jobbing service for academic libraries in North America. This follows the 2014 SWETS bankruptcy and other recent changes in especially academic book distribution channels.

In making the YBP announcement, Senior Vice President, YBP Sales & Operations, Mark Kendall noted that “EBSCO fully understands the value that YBP and our outstanding staff bring to libraries and is committed to supporting this while also helping expand our core services through investment in new technologies. They have a leading edge vision for integrating collection development and acquisition services for all formats of content, including monographs and journals, with their discovery solution. This commitment will add significant value to both libraries and end users and we are excited to be a part of this vision.”

B&T has been in the business of distributing books and other media for over 180 years.  The private company, based in Charlotte North Carolina, reported sales of nearly $2.2 billion US in the past year, according to the Million Dollar Database. With over 36,000 customers in over 120 countries, “B&T offers its publishers and customers bundled physical and digital media distribution services. We empower publishers to manage content distribution in multiple formats, to numerous digital devices and merchandising channels worldwide. We supply customers both the physical books and digital content they want, from one trusted source. As the digital future takes shape, Baker & Taylor is delivering success for suppliers and customers.”

YBP was founded in 1971 to serve as a book fulfillment service for academic libraries. Today the company has over 300 employees and serves a global population over academic libraries and consortia in 60 countries. They offer solutions for “acquisition, collection development and technical service needs.” In 1999, B&T acquired the company, merging its academic library services unit with Yankee Book Peddler Inc. The new unit was renamed YBP Library Services and become a subsidiary of Baker & Taylor.

YBP headquarters office - courtesy of YBP

YBP headquarters office – courtesy of YBP

The sale of YBP allows B&T to focus on other market segments.  The company describes itself as “one of the largest in-stock inventories of books, videos and music in the U.S. – about 385,000 titles in inventory and more than 1.5 million titles available for order. We have substantially increased our book inventory with our new Print on Demand Program, allowing customers to access the titles they need when they need them. Baker & Taylor also provides books and entertainment products to warehouse clubs and Internet retailers and publishes several successful lines of books, including the best-selling Uncle John’s Bathroom Reader series.” This move allows the company to concentrate on other market sectors as they work to focus on international and mass markets, moving more into digital areas.  The sales price was not released.

EBSCO Information Services, a division of EBSCO Industries, headquartered in Birmingham, Alabama focuses on many of the same markets that YBP targeted:  Academic, medical, library, K-12, corporate and government. The diversified, private company is listed as having nearly $400 million in sales currently. In addition to their EBSCOhost fee-based online EBSCO logodatabase service and EBSCONET, a e-resource management system, they introduced their own discovery service in 2010.  Having YBP in their stable of companies, EBSCO deepens its penetration and relationships with key clientele. Already self-described as “the largest provider of these services to libraries worldwide,” EBSCO touted their acquisition of YBP as adding to their stable “the leader in delivering academic library workflow and ‘shelf ready’ solutions through its innovative suite of acquisition and metadata resources.”

EBSCO also focused attention on YBP’s GOBI 3 (Global Online Bibliographic Information) which “serves as YBP’s primary tool for the discovery and acquisition of digital and print monographic content. Relied upon by academic, research and special libraries worldwide, GOBI provides access to more than 12 million titles, including more than one million digital titles from leading aggregators and publishers.” These assets clearly move EBSCO into lucrative areas that deepen their daily contact with their primary user groups while giving users hope for greater investment into more fully developing GOBI into a more flexible, comprehensive tool.  Over the past three iterations of GOBI, the database itself has offered few real enhancements or innovations to make the task of acquisitions easier and more comprehensive.  YBP users contacted as a part of this report believe this is a win-win for both EBSCO and, hopefully, for libraries as well.

“As a user of the GOBI system myself,” one librarian reports, “I feel that Baker & Taylor has certainly failed to make any real investments into the product over the years – the system is slow, the search function is very limited and the results pages are poorly designed and for each title, you have to drift through so many entries – for cloth, paper and eBook versions of the same title.” Susan Stearns, Executive Director of the Boston Library Consortium, reports that their member librarians findGOBI logo today’s GOBI “somewhat clunky and that the search capabilities in particular could use a step into the 21st century. Obviously if EBSCO invests some in the technology, I expect the libraries would find GOBI even more effective.”

EBSCO’s president also noted in the press release that “YBP is recognized in the market as the leader at what they do. We want them to keep doing it. We are in a position to help their progress and expedite their vision, and we are looking to continue their operations and partnerships with publisher and aggregator platforms.”

YBP – A NEW BEGINNING AND A BETTER FIT?

All libraries – but especially academics – rely on third-party distributors for handling relationships and order/fulfillment of journals and books. For magazines – as impacted by the SWETS bankruptcy – ACRL President Ann Campion Riley estimated that “large university libraries could have between 20,000 and 40,000 journal subscriptions. One large publisher may oversee a couple thousand journals, but for a library operation the size of the University of Missouri at Columbia’s, the staff is looking at calls to probably 800 different publishers.”  With books, the number of potential publishers to be coordinated is even greater.

YBP has been a critical partner to academic libraries by integrating ebook and print versions from an immense list of publishers – from small presses to academics to textbooks to trade – from all parts of the world.  YBP has properly boasted itself as “the most comprehensive integrated digital and print discovery and fulfillment services in the industry,” and few of their client libraries would disagree. Their value added services include:

  • approval plans & continuations
  • out of print services
  • firm orders
  • print on demand
  • links to reviews from key sources
  • demand driven acquisition programs
  • cataloging and markup service to make materials shelf-ready on arrival
  • retrospective collection analysis
  • peer group selection information
  • ebooks integrated with print versions in the cataloging
  • online ordering integrated with library internal processing

YBP logo

B&T’s services formed an interesting, compatible service structure for YBP; however, in recent years YBP’s GOBI system increasingly appeared outdated in features and slow in operation. Although few were willing to be quoted, even competitors felt YBP was sliding in recent years in terms of innovation and upgrades.

THE WORD ON THE STREET: SOME INITIAL REACTIONS FROM INSIDE THE TRADE

Content Strategies’ Dan Tonkery, information industry veteran and former EBSCO director of development, wasn’t surprised at the announcement. “B&T Venture guys have been trying to sell YBP for nearly two years. The venture firm was looking for a payday and YBP is their best shot of getting money out of the deal. Remember B&T is owned by a venture firm, I think its third one now.”

Tonkery agrees with many in the industry that YBP needs a shot of adrenaline to maintain its position: “I don’t think that EBSCO understands that GOBI is tired and needs a major overhaul. EBSCO has a army of programmers on hand most of them work on their discovery service, EDS. EBSCO just closed their remaining subscription service or regional offices in the US and their subscription business has seen a drop in service levels but with the failure of SWETS they really have no completion in the US market for subscription sales.”

“Having YBP with 78% market share and EBSCO Subscriptions at about 85% market share plus owning the largest discovery system and database company gives EBSCO control of the majority of an academic libraries content budget,” Tonkery continues. “Being number 1 in all your library market product and services is an impressive accomplishment. EBSCO’s database business is larger than ProQuest and Gale combined. EBSCO is in business to make money. The database business is highly profitable, YBP is profitable, and the subscription business can benefit with some continued cost reduction.”

“I don’t expect a great deal of change resulting from the purchase,” Tony Sanfilippo, Ohio State University Press Director reports, “at least in how it impacts the work of university presses like ours for books sold through the traditional methods YBP uses, namely the approval and slips processes. If anything I suspect that there could be a significant upside to this.

“I never really felt that B&T had a sufficient understanding of what YBP did, and being purchased by Castle Harlan didn’t help,” Sanfilippo continues. “It seemed Castle Harlan never understood the book business in general, let alone the library or academic library sector, and as a private equity investment firm, they seemed much more likely to carve up and sell the investment than grow it, which it appears they are beginning to do. At least with EBSCO, YBP is now owned by a company that understands its core business and customer’s needs. It would seem that it’s in EBSCO’s best interest to invest in GOBI, and to reduce the friction required for libraries to make informed purchases. So all in all I think this is a good thing for YBP.”

“A bigger threat to YBP is likely to be non-traditional channels like Amazon,” Sanfilippo forecasts. “Amazon, combined with lower revenue from models like DDA/STL are likely to create bigger problems for YBP than EBSCO might. I suspect EBSCO isn’t going to interfere with what YBP does in significant ways, at least not in areas like profiling and the approval process, but larger market forces are already hurting YBP’s bottom line, and it seems likely we’ll all see that trend continue.”

“On the other hand,” Sanfilippo confuses, “I’m very concerned about what this means for B&T. For many university presses the retail market is a significant source of sales. If Castle Harlan continues to neglect B&T, or treat its remaining parts like they treated YBP, part worth more than the whole, I don’t think it bodes well for the retail market segment which in the long run could mean more consolidation for that sector and more market share for B&T’s main competitor, Ingram.”

BT logo

However at what many in the industry believe to be an asking price of at least $100 million, there is concern that EBSCO may have paid too much. Also unknown at this time is how YBP will be integrated into the EBSCO structure and culture.  “It will be interesting to see how EBSCO integrates YBP,” notes on analyst who requested anonymity, “or if they let them remain on their own. Being able to sell a library subscriptions, books, and databases provides an opportunity to develop new integrated services. No other company has the depth of services in the library marketplace. EBSCO has been a leader and innovator for over 50 years. Let’s see what the next generation of EBSCO management brings to the marketplace. EBSCO has an established global salesforce and adding YBP allows the company to offer books in addition to other services, which adds to their product catalog in significant ways. YBP already has a strong market penetration in the US, under the EBSCO umbrella; the service has the chance of becoming a truly global supplier.”

Susan Stearns, Excutive Director of Boston Library Consortium, reports her members see two potential issues: “the continued shrinking of options as vendors consolidate and the risk that YBP will lose its neutrality. While vendor consolidation can certainly have benefits, there comes a point where fewer options can really mean almost no options. And, if history is any indication, fewer options seldom means lower prices for libraries. Second, is the concern over the willingness of EBSCO [and vendors in general] to inter-operate and interface their systems and services with other vendors, particularly those with whom they may compete.”

“For example,” Stearns continues, “I know that YBP had worked with Ex Libris to develop interoperability with their Alma resource management service. Ex Libris and EBSCO compete in the discovery market. Is this going to impact the existing interoperability? Similarly, YBP has worked with a variety of other ebook aggregators. Some of these, ProQuest in particular, compete with EBSCO in other areas. What will be the impact of this? YBP has obviously served an important role in the ecosystem of libraries, particularly academic libraries. For the most part, this role has been a neutral one with YBP not servant to any one master [other than Baker & Taylor of course] and this has allowed YBP to bring publishers, librarians and aggregators together without being beholden to or necessarily influenced by specific vendors. It is hard to imagine this role continuing, which is a loss to the community as a whole to my mind.”

DISTRIBUTION IN AN ERA OF CONSOLIDATION…AND AMAZON

In the area of distribution, no report would be complete without consideration of the elephant in the room:  Amazon. Last November consultant Joe Esposito announced a new Ithaka S+R study into a survey of Amazon’s role in book sales toithaka S+R academic libraries. Certainly Amazon has made inroads in areas such as DVDs and audiobooks where their pricing and delivery have been compelling in our era of austerity. In talking about this research, Esposito poses  some interesting questions for which we currently have no information:  “Most university presses list Amazon as their biggest customer and decry the decline of their library sales (which they estimate by looking at their sales figures to such wholesalers as Baker & Taylor, YBP, and Ingram/Coutts), but what if some of the growth at Amazon is actually a shift from one library supplier to another? In other words, are libraries cutting back on university press titles or are they simply switching from traditional wholesalers to Amazon?”

Further, Esposito notes, “the aim of this research is to get a portrait of one aspect of Amazon’s participation in the academic community….We view this as the first step in shedding some light on the black hole that is Amazon.

University of North Carolina, Charlotte, Associate University Librarian for Collection Development and Electronic Resources, Charles Hamaker sees more change ahead. “We are moving as fast as we can away from print-based book acquisitions and maintain our own database of ebooks we can purchase under the conditions we accept. We only buy ebooks that have unlimited simultaneous users. No DRM and perpetual and archival rights. We have identified the least expensive way and most systematic method to do this is to buy defined packages from key publishers. As a result our reliance on approval programs and single title acquisitions has dropped dramatically and as a result we rely much less on GOBI and automatic shipment and processing. Over the last 3 years our YBP purchasing has dropped about 50%. We anticipate this decline to continue. We are much less reliant on Yankee then we ever have been. It is not business as usual anymore for most libraries. Ultimately this acquisition by EBSCO is a move into a declining market from our perspective.”

Book distribution has undergone incredible change in the past ten years – from print-dominate to ebook alternatives, from traditional trade and university presses alone to incorporating a much broader range of small publishers, indie authors and international works.  Midwest Library Services Jay Askuvich sees this as “interesting times. Recently, our marketplace has experienced its share of mergers, acquisitions, failures, and closures. Most of the issues you raise call for speculation that only EBSCO can address with any degree of certainty. As with any corporate acquisition, uncertainty follows.” More change, more opportunities.

EBSCO’s strategic move will be closely watched by its competitors, clients and publishers.  Rest assured that Against the Grain will be watching as well!  Feel free to share your thoughts and reactions with us!

 

Nancy K. Herther is librarian for American Studies, Anthropology, Asian American Studies & Sociology at the University of Minnesota Libraries, Twin Cities campus.

herther@umn.edu

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One thought on “ATG Original: B&T, EBSCO, YBP…..More Changes To Distribution Channels

  1. Excellent overview of this complicated purchase and sale that affects the whole library supply chain. The various perspectives in the article remind me of the tale of the Seven Blind Men and the elephant. All of their stories are true!