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University of Michigan Press print sales revenue, 2015-2016.

University of Michigan Library

The University of Michigan Press, like many university presses these days, is facing two realities.

First, there is the perception of the press as an innovator in its field. It is recognized as one of the first to argue that university presses can better serve the needs of scholars by working with their own university libraries, applauded for its commitment to accessibility in digital publishing and respected for its participation in projects that aim to transform scholarly publishing.

Then there is the economic reality of being a university press in 2016. The press shared sales data stretching back to 2005 and strategy documents with Inside Higher Ed, showing its core business -- print monograph sales -- is crumbling away with no clear revenue source to replace it. Used and rental books are eating into the press’s textbook sales. Returns on ebook sales are downright alarming.

The press is better off than many smaller presses, some of which are fighting for survival, but it is not among the most prestigious. Charles T. Watkinson, press director and associate librarian for publishing, acknowledged that sales have reached a point where the press now needs the decline to level off.

“It is clear that this is not a sustainable situation,” Watkinson said in an interview.

Yet Watkinson, who joined the press in 2014, is optimistic about the future of university presses and their role in advancing scholarly communication. Based on the work the press has done and continues to do to reinvent itself within the university library, he said, the press is more effective than ever at advancing the university’s academic mission and helping faculty members from all over not just with gaining tenure but with all their publishing needs.

Coping With Collapse

The University of Michigan Press, which is part of the umbrella organization Michigan Publishing, has two main divisions: one producing academic monographs and regional books, the other English language teaching books. Together, they generate about $3.5 million in revenue -- nearly three-quarters of Michigan Publishing's total annual revenue. The university, through the library and provost’s office, contributes slightly less than $1 million (as well as significant in-kind contributions such as computers and office space).

But that balance is shifting. In fiscal year 2005, the press published 155 titles, selling 292,407 copies and generating more than $5 million in sales revenue. Eleven years later, the press is publishing and selling less. The number of titles published has dropped by 46; unit sales, 143,319. Sales revenue has plummeted about 40 percent.

While the press has seen declines across all its print products, Watkinson pointed to the “collapse of the market for print monographs” as the main reason why the press finds itself in its current situation. Its academic monograph division in 2004-5 generated more than $3.3 million in revenue on its own but made barely half that -- $1.7 million -- this past fiscal year, which ended in June.

Now Michigan Publishing’s finances are upside down. During the 2016 fiscal year, its costs exceeded its revenue by about $150,000, eating into the organization’s cash reserves of about $800,000. Since more than half of its expenses -- about 51 percent -- are tied to staffing, it has little flexibility to cut costs without cutting jobs, Watkinson said.

Moving from print to digital does not appear to be the solution, whether looking at reducing costs or increasing revenue. Michigan was one of the universities that in 2015 participated in a study of the cost of monograph publishing conducted by Ithaka S+R, a nonprofit research and consulting firm. The study found that the average monograph at Michigan costs around $26,000 to produce -- but most of those costs are tied up in staff time, meaning the press wouldn’t save much by cutting all print production. Only 11 percent of overall expenses come from printing.

At the same time, Watkinson said he is increasingly concerned about how university presses are meant to make money from digital monographs.

“In no cases at the moment are we getting anywhere near the returns from any ebook sold that we would have from print sales,” Watkinson said. At most, he said, the press is able to recoup maybe 25 percent of the price of a retail ebook -- half of what it would expect to make from a print book sale.

In spite of what the sales figure show, the monograph continues to be an invaluable part of scholarly communication -- particularly for scholars in the humanities and social sciences, but also for the press. In the last five years, dozens of its books have won awards, many of them from major academic associations.

"It’s not just an important product because it’s the coin of the realm for tenure and promotion,” Watkinson said. “It’s important for us to still do, but it means making some very distinct choices about how we measure impact and how we think of ourselves as a publisher.”

The Question of Success

As monograph sales continue to dwindle, many university press directors and others involved in scholarly communication and publishing are asking themselves a question they say might not have a straightforward answer: How do you evaluate a university press in the 21st century?

By its finances? Not according to Katherine Skinner, executive director of the Educopia Institute. “Scholarly communication is a mess right now,” she said in an interview. “Something having financial success doesn’t mean it’s creating something that’s going to be sustainable in the long term.”

By its scholarly impact? Perhaps, but not by itself, said Roger C. Schonfeld, director of the libraries and scholarly communication program at Ithaka S+R. “I have the sense that some of the presses … are at least as much about building strength for transformation of the model as they are about continuing to maximize scholarly impact in the ways they’ve tried to do in the past,” he said in an interview.

Comparing one press to another is also an imperfect evaluation method, because presses are increasingly acting on different motivations, Schonfeld said. Some presses today are exploring -- sometimes to the detriment of their bottom line -- what the future of the monograph looks like. Others are experimenting with the best way to support born-digital research. Others yet might specialize in conference proceedings, open educational resources or scholarly journals.

“There may be some things that they all have in common, but they ultimately may be designed to pursue different outcomes,” Schonfeld said. In his opinion, “the question of success really connects back to outcomes.”

Another complicating issue is the presses’ varied organizational and reporting structures. Michigan Publishing, the press’s home since 2012, also includes Deep Blue, an institutional repository, and Michigan Publishing Services, an office that mostly assists faculty members, staffers and students with one-off publication needs. Michigan Publishing, in turn, is a part of the university library.

Compare that structure to the University of North Carolina Press. It bears the name of the university system but is actually a nonprofit with its own governing board. The press is not completely independent, however. It reports to the university system’s office of the president, and its board members are approved by the system’s board.

John Sherer, director of the UNC Press, said “thinking in aggregate” about everything a press does may be the best way to evaluate its performance.

“It’s about the cumulative body of work you’re doing, and I don’t know how to measure that,” Sherer said in an interview. “We don’t have dashboards of data. We have anecdotes -- all of this really squishy stuff that we know to be true but is very hard to gauge.”

Like Michigan, the UNC Press is seeing concerning numbers about ebook sales and use. The press has offered digital editions of its books for almost a decade, and the usage analytics are “not looking great, to be honest,” Sherer said. In fact, he added, “I’ve had librarians telling us, ‘We’re not sure if we should be buying your books.’”

Yet seen from a different perspective, the press is diversifying and growing. The press is printing 500,000 books a year and projecting its library will grow by 8 percent this year, Sherer said. It is halfway through a three-year grant from the Andrew W. Mellon Foundation to expand Longleaf Services, a company that provides fulfillment services to other presses. And last year, the press launched the Office of Scholarly Publishing Services, which supports publishing initiatives at campuses in the University of North Carolina System.

If those initiatives become significant sources of revenue for the press, it could blunt the effect of declining monograph sales. Monograph publishing would still remain an important part of what the press does -- both financially and symbolically -- but the press would no longer be “living and dying by sales,” Sherer said.

“All these diverse things support our core,” he added. “If we do these other things successfully, it actually makes the organization healthier to fund [open-access publishing] or just to publish more content.”

Selectivity or Service?

Initiatives such as the publishing service providers at Michigan and UNC are perhaps particularly worth monitoring, as they represent both a shift from publishers being paid for content to being paid for services, and from primarily serving authors outside of the university to also serving faculty members on campus.

Those shifts challenge university presses to reconsider their traditional definition as independent, selective organizations, experts said.

“Presses have this intrinsic independence that gives you permission to literally just keep doing what you want to do,” Sherer said. That can be both a good and a bad thing, he added. “You can watch trends come and go, but it also gives you permission to not catch the one that is meaningful.”

At Michigan, for example, the press has built a reputation in part because of the academic monographs it publishes, but its dependence on that form of high-input, high-investment format has in a sense “handcuffed” it, leaving it less flexible to serve authors who may want to publish conference proceedings, digital projects or journals, Watkinson said.

At many universities, including Michigan, libraries have stepped forward to fill those gap.

The Educopia Institute, which assists groups with forming organizations, in 2013 helped launch the Library Publishing Coalition, a membership association for libraries involved in publishing activities. The launch of the association tapped into an interest not even its founders -- including Watkinson, then at Purdue University -- had anticipated. Skinner said the institute had hoped to attract about 20 libraries for the launch. Instead, it got 61.

“The vested interest of libraries in undertaking publishing projects hasn’t come from libraries suddenly desiring to step into that territory,” Skinner said. “It’s come because there have been demands at a campus level for different types of publications. … It hasn’t been because university presses weren’t interested, but because they were driven by a bottom line.”

But the fact that both libraries and presses are interested in serving faculty members doesn’t mean it has to turn into a competition for business, Skinner said. “It’s a reimagining of what the business of publishing might look like, and what the roles of the library and presses might be,” she said.

In some cases, the line between libraries and presses has been blurred. The University of Michigan Press moved into the library in 2012. Many other universities have completed similar mergers. According to Educopia’s data, about 20 percent of university presses share lines of reporting with libraries or are embedded within them -- a “radical departure” from a decade ago, Skinner said.

While a merger may in the past have been viewed from the press’s perspective as a demotion, the perception is changing, Skinner said. “Others are realizing how much power there is in melding the voices, given the challenges that both are facing in the digital space,” she said.

Skepticism about mergers still lingers, however. Sherer said the press’s work with libraries in the North Carolina system through the Office of Scholarly Publishing Services has been a “very positive experience,” but he outlined a “fundamental contradiction” between libraries and presses that makes merging the two organizations problematic. Libraries, he said, help make content available; presses filter.

“We sometimes joke that we’re in the business of saying no,” Sherer said. “When you have a scholar who walks into your business, the healthy reaction from a library is ‘Yeah, let’s find a way to do it.’ For us at a press, it’s ‘Well, let’s take a close look at this. Let’s send it out for peer review.’”

Still, he added, “It’s kind of silly to think we’re going to do something transformational at university presses without librarians being completely on board.”

Mergers also raise the question about who pays the bills and who gets to set the agenda, Sherer said. He pointed out that the UNC Press receives a stipend from the state that totals about 6-8 percent of its budget. Michigan Publishing receives about one-fifth of its revenue from the university.

“If you’re going to align these two organizations, you’re going to have to address this somehow,” Sherer said.

Watkinson said he is not worried about losing editorial independence, which he said is “right at the heart of our brand.” The topic was on the minds of many faculty members when the merger was proposed, he said, and so the Faculty Senate created what he called a “firewall,” building different approval mechanisms for each division of Michigan Publishing. An executive committee decides what the press publishes. The library council, meanwhile, ensures Michigan Publishing Services is meeting the needs of faculty members and staffers.

Merging with the library did take some of the pressure off the press when it comes to its financial situation, Watkinson said. In 2014, an internal accounting change meant the press would no longer be judged primarily for its ability to generate revenue, but on how it furthers the university’s academic mission.

That doesn’t mean the press is free to disregard its financial situation, Watkinson said. The move into the library came with a caveat -- the press “shouldn’t be too much of a burden” to the university financially.

“We don’t want to use mission as an excuse or inefficiency,” Watkinson said. “We are a mission-driven organization, but we are trying to make money to advance our mission. That’s how we can square what is apparently a circle.”

But the merger has also given the press new ways to gauge success, Watkinson said. In the past, the press looked to increase revenue from book sales and licensing agreements. Those factors still matter, Watkinson said, but now the press is exploring emerging financial measures such as revenue from supporting open-access initiatives and publishing services in addition. Beyond finances, the press still cherishes positive book reviews and celebrates when a title wins a prize, but it also cares about engagement analytics, how many different centers and departments on campus it supports, and how many digital projects it helps faculty members realize. And it is still able to expose the kind of scholarship that commercial publishers normally wouldn’t touch.

“One of the amazing things of being integrated into a library is at least it’s given us some breathing room,” Watkinson said. “This decline in revenue doesn’t have to be this thing that I and my colleagues think about every day. We don’t always have to look over our shoulder for that next dollar. It gives presses the capacity and freedom to innovate and, perhaps, on the revenue side, dig themselves out as well.”

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