Jonathan Glasspool is m.d. of for Bloomsbury Academic & Professional and speaker at FutureBook 2013.
Bloomsbury has made 10 acquisitions in the academic and professional space in the past five years. Can you tell us more about the thinking behind that strategy?
Well there are many pros and cons of growing by acquisition, and they are largely cons. It is a very dangerous way to grow a business in terms of the risks you import when you buy a chunk of a new business or an existing company, because it is very easy to underestimate the additional costs, and additionally the time it takes to integrate a business. You tend to overestimate the savings you might make by joining one small company with a larger one.
You’ve emphasised the cons of growing by acquisition, but what are the pros of acquiring a company?
The main pro of acquisitions is that you can grow a lot quicker; academic publishing is a business in which economies of scale do matter, so if you have a bigger business in general you can be more profitable. If you’re growing by acquisition speed is a major advantage, as the cost savings you can make tend to be a lot quicker to achieve.
Does the Bloomsbury name and reputation help when it comes to making a success out of acquiring other businesses?
Well it helps to have some Gringotts gold. It is an exciting work in progress [at Bloomsbury], and while it is quite clear that some of our acquisitions have worked from a financial perspective, with some of our more recent acquisitions, it is still too early to say.
You don’t really know for several years after you’ve bought the business whether it was the right decision to do so, which is why most publishers prefer to grow organically—it is much more manageable and it is much more scalable, too.
Consolidation was one of the big buzzwords at this year’s Frankfurt Book Fair. Do you think growth by acquisition is something the industry will see more of in the coming months?
I think what Bloomsbury is doing at the moment is part and parcel of what is happening across the industry as a whole. The traditional print markets are at best static, and if you look at the bigger publishing companies—like Pearson and Wiley—they are very acquisitive at the moment.
But a lot of those acquisitions are not about content, they are about capability—e-learning companies and web solution businesses are being bought in order for the publishers to move more quickly into the online learning space.
What will 2014 hold for Bloomsbury?
The irony of having spent a lot of my time over the past five years working on acquisitions is that what I have got most excited about it some of our organic publishing.
We launched Drama Online this spring with Faber and that’s doing really well; in May next year we will launch Bloomsbury Collection, an e-book platform through which we will be selling direct to consumers. That ties in with the idea of the benefit of disintermediation and removing the intermediary between the customer and us. That is one of the intrinsic reasons why academic and professional publishers are a lot more profitable than trade publishers: because they deal direct with end users.