Friday, July 29, 2005

40% turn-over from electronic products and service

The publisher Reed Elsevier presented this week its half year figures. For financial people the figures are interesting. But to me there was an interesting statement: 40 per cent of the turn-over comes from electronic products. Reed Elsevier has come a long way.

The roots of electronic publishing of Elsevier lie in the company Excerpta Medica. This company produced so called medical abstract magazines, publications with summaries of scientific articles and keywords. To produce the magazine and keep track of the keywords, the company bought in 1968 a mini-computer. They were in my estimation the first Dutch publishing company to do so. Managing director of the publishing company was Pierre Vinken, who was also a surgeon. As such he got into touch with automated hospital systems and saw the opportunities for the publishing company. In 1971 Excerpta Medica was sold to Elsevier, including the production company Infonet.

Within Elsevier, Excerpta Medica was based within the Elsevier Science division. The medical component of this division grew very fast. The methods of Excerpta Medica were used. Magnetic tapes were used as distribution medium for medical and pharmaceutical research companies and databases were loaded on American host like Dialog and BRS.

When CD-ROM took the role of frozen online, may of the databases of Elsevier Science were put on the silver discs and distributed worldwide. After 1995 Elsevier Science began to move from printed magazines to electronic counterparts. It was in this cross-over, which has not finished yet, that there came strained relationships between Elsevier Science and the libraries. Subscriptions went only up, while libraries were obliged to have printed as well as electronic magazines.

The smartest move came, when Elsevier Science announced the database project, ScienceDirect. Next to the legal database Lexus and news database Nexis, Elsevier set up a database with all its own scientific publications.

By 2000 Elsevier Science brought in the majority of revenues generated by electronic delivery. In total Elsevier made 30 per cent of its turn-over from electronic products. By now, 2005, Elsevier Science, but also Reed Business contribute to the 40 per cent of the Reed Elsevier turn-over. It has taken 5 years in order to add another 10 per cent turn-over from electronic products. I guess that the next 10 per cent will take only half of this time. So by the end of 2007, the balance of Reed Elsevier’s turn-over should tip over the 50 per cent mark.

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