How to Be a Bigger, Better Book Publisher
What does it take to achieve marked growth in the book business? The answer is as varied as the publishing companies in the market today. But a few core factors, such as acquisitions, international licensing and monetary support, can represent elements vital to extensive growth. Tapping into a bit of creativity and adapting to specific market needs also help. Dan Oswald, president and publisher of M. Lee Smith Publishers, LLC, and Rich Wohl, vice president of publishing for Wolters Kluwer Health and Lippincott Williams & Wilkins, have seen this firsthand. Here, they talk about the keys to their companies’ significant expansions and offer tips that can help fertilize your company’s growth efforts:
… on building recurring revenue streams
M. Lee Smith Publishers, LLC, Brentwood, Tenn., was founded 31 years ago as a newsletter publisher. Today it is a $22.5 million company that publishes books, newsletters and specialized information, in addition to gaining revenue through conferences and seminars. M. Lee Smith specializes in employment law and the legal field. One of its most recent book titles is “50 Employment Laws in 50 States.”
Was there a specific branch of publishing on which M. Lee Smith focused in an effort to grow in terms of revenue, distribution and number of authors published?
Dan Oswald: Our biggest growth came from selling state-specific employment law newsletters that we prepare with law firms in those states. A lot of our growth came by initially launching those state by state. Then we tried to gain business by working through human resource professionals specializing in law and looked to broaden our offerings to those customers through books, seminars, conferences and loose-leaf products—anything that would deliver information to those customers on specific state and federal laws.
Is there an overall strategy your company used that was successful in your company’s growth?
Oswald: I think the No. 1 thing we do is look for recurring revenue streams. Newsletters by nature are that. They are a renewal product.
We also experience recurring revenue now by publishing directories that are annual. We turned the directories into pieces that are automatically renewed unless a customer requests them to be stopped.
We do the same with book products. For example, we have a product that covers “50 Top Employment Laws in 50 States” that we republish every year. Essentially customers get it every year at the current price, and we send a postcard in advance stating that when they bought the book originally they agreed to take future additions. The next one is about to come out, and if they do not want it they can let us know.
BB: Did M. Lee Smith need to change strategies at some point to better accommodate the changes occurring as a result of growth?
Oswald: We’ve [changed] our internal structure …. We went to a group publisher model and have subject-matter experts in each area.
We have experts in employment law and general human resources, and someone in charge of electronic video training products for supervisors in companies. Those people have top line and bottom line responsibility in their subject areas, and they are product developers. We look for those individuals who are close to and have good relationships with others in the markets we handle.
In the past, we were more centralized with just one or two people handling it all.
BB: Has acquisition played a major role in the company’s growth?
Oswald: We acquired competitive book and newsletter titles. In fact, six years ago we bought out our largest competitor of labor newsletters—The Labor Letter, Inc.—which was based out of California. That company had state employment newsletters in 26 states.
BB: Have you used any creative financing or investment strategies to facilitate growth?
Oswald: I purchased M. Lee Smith a year ago. I’ve known Lee through trade associations, and he called looking for someone to run the business since he was approaching retirement. I said I was interested in buying.
He and I came to an interesting finance agreement, which entailed me buying the business with all its debt and keeping the equity for myself. The way I was able to accomplish this was to divvy the debt. One-third is senior debt secured with the bank, one-third is subordinated debt out of a company called Chicago Prairie Capital, and one-third is considered seller paper from Lee. The terms are structured to service the debt and still invest and grow business.
… on acquisitions and cornering the market
The Lippincott Williams & Wilkins (LWW) imprint continues a publishing history that began in 1785. As J.B Lippincott, the company published the first textbook for nurses in 1878 and launched the American Journal of Nursing in 1900. Today, students and practitioners worldwide continue to look to LWW for information in medicine, nursing and the health
Among the imprint’s titles are “Grant’s Atlas of Anatomy,” “Brunner and Suddarth’s Textbook of Medical-Surgical Nursing,” “Stedman’s Medical Dictionary,” and “Memmler’s The Human Body in Health and Disease.”
Did LWW focus on a specific branch of publishing in an effort to grow in terms of revenue, distribution and number of authors published? Did acquisitions play a part in this?
Wohl: J.B. Lippincott had a long history in general publishing, and moved into educational publishing in the 1950s. This expanded to include medical and nursing education. In 1978 the company was sold to Harper & Row, and in 1990 Wolters Kluwer (WK) purchased all of the health, medical and nursing assets.
WK then merged Lippincott with Raven Publishers to form Lippincott-Raven, acquired numerous other medical imprints, including the medical titles of Little & Brown, and in 1998, acquired Williams & Wilkins. [That year], all of WK’s medical and health publishing assets were merged into one company, Lippincott Williams & Wilkins. In 2000, LWW acquired Springhouse, substantially expanding its nursing publishing assets.
Was there an overall strategy your company used that was successful in LWW’s growth?
Wohl: The strategy has focused on improving market share in the health and medical publishing areas, both through acquisition and through product innovations to capture more of its existing markets.
In addition, our publishing progress is grounded in its paperless workflow systems that improve article submission and tracking through to the published journal. LWW provides the broadest distribution of its journal content through customized society portal pages and through electronic distribution to the 13 million worldwide users of the online medical information provider Ovid Technologies (Ovid is also part of Wolters Kluwer Health).
LWW’s medical content is also sold to pharmaceutical companies in print and electronic formats, providing helpful educational tools and support for physicians worldwide.
Are there any creative financing/investment strategies that LWW incorporates to experience growth? And if so, what are they?
Wohl: LWW is part of the Health division of Wolters Kluwer, NV, a leading multinational publisher and information services company with annual revenues (2005) of $3.4 billion, approximately 18,400 employees worldwide, and operations across Europe, North America and Asia Pacific. With the backing and support of a multi-billion-dollar publicly traded corporation, LWW is able to make significant investments in new product strategies and new products for adjacent markets.
Does LWW utilize international expansion/licensing and new title acquisition strategies? And if so, what are they?
Wohl: LWW has a very strong international presence. We export our products around the world, as well as license translations in a wide range of languages and regions. …
What is LWW’s most successful strategy?
Wohl: Investing in markets that are experiencing growth, and developing products that better serve the education and information needs of our health care customers, in print and/or electronic formats.
For example, recent revenue growth in the nursing and allied health fields reflects both the demographic growth in those areas, as well as significant increases in market share driven by our product innovation and customer focus. This focus on customers and innovation is central to the Wolters Kluwer commitment to being the professional’s first choice.
Sharon Cole is a Philadelphia-based freelance writer serving the print industry.