Over the past few weeks, Ithaka S+R has conducted conversations with a variety of university press directors to get a sense of how they are faring during this uncertain and challenging time. We spoke with a total of 11 directors representing small, medium, and large presses from public and private universities, all in the US. The discussions were wide ranging, touching on everything from how they were coping with the practical issues around pivoting to a remote workforce, to the broader question of the expected impact of the pandemic on their current and future programs. It should be noted that many of these conversations took place before the killing of George Floyd and the ensuing struggle to address systemic racism that has seized all of us personally and reverberated within our organizations. This too is shaping presses in powerful ways, but we confine this report to our exploration of their responses to the COVID challenge. Here is what we learned from these discussions, starting today with the present circumstances. In a second piece, we will examine how press directors are looking ahead to the future.

Most Presses are Coping Well with the Move to a Virtual Workforce

Every director we spoke with pointed to how seamless the transition had been. Their technology solutions were more than adequate, and for the most part staff was adjusting well, morale was high, and productivity was strong. Here are some of their observations and the steps they have taken.

Health and safety first. Directors were using every opportunity to reinforce with staff the importance of prioritizing personal health and the well being of family and friends during this time. Several directors said they were checking in with staff at all levels, and one director mentioned the decision to give the whole staff a mental health day, commenting “It’s hard for people to take time off in these circumstances when you’re always on, so we wanted to model that and show that it was okay to take time for yourself.”

Staying connected. Presses are keeping staff connected by moving the regular cadence of meetings used to manage the business online, and supplementing those with newsletters and briefings to communicate other key information and policy decisions by the university. Many presses have introduced weekly or biweekly all-staff get-togethers which seem to be quite popular. Some of these are social occasions; others are topically driven. One director said “I don’t know why we didn’t do these regular all-staff meetings before. It’s such a great way to keep everyone connected and aligned. They’re invigorating.” Some presses have adopted new technology like Slack to enhance connectivity, and that has been successful in some cases (“we took right to it”) and less successful in others (“it isn’t really part of our work routine yet”). Everyone spoke of the importance of checking in, creating social times when staff can just hang out together, and especially staying connected to people who are more vulnerable because they live alone, are newer to the organization, or having trouble adjusting.

Maintaining productivity. Directors reported that productivity seems to be surprisingly high, even with the emotional stress and disruption many of their employees were experiencing. The most common measure of productivity we heard was the ability of staff to maintain production targets while working remotely. This was made possible in part because essential services, including printers and warehouses, stayed open, but all the complex systems of production were transitioned easily and the refrain we heard was “Everything is on schedule.” One press even rapidly turned around a timely book on contact tracing, written by faculty at their institution, going from manuscript to published in one week.

Embracing change. Many presses have introduced more process reengineering in the last two months than in the last several years, and directors are welcoming this opportunity for innovation. One director summed it up this way: “During this time people are coming together to do things differently, unleashing innovation and doing it with speed.” Among the changes they highlighted:

  • A move away from print wherever possible, including converting to online submission and contract systems; electronic proofs, review and exam copies; and eliminating the print catalog.
  • A pivot to virtual exhibits and disciplinary conferences.
  • Putting more books into print on demand (POD). One director claimed they moved 2,000 already digitized books into POD in 12 days by remapping their supply chain and changing all of their workflows. Another said they were eliminating all short run printing and going straight to POD.

Despite these positive signs, there have been downsides. Worry about what will happen to their markets in 2021 was shared by all presses. Missing out on the opportunity to recruit critical unfilled positions was another commonly cited concern. And some presses spoke of the impossibility of moving ahead with strategic plans, from major office renovations to reorganizations and investment in new initiatives. One director put it like this: “I created a new five year plan for the press and got a commitment from the university for funding, but now all that is on hold. They have not only withdrawn the extra funding, but I’m being asked for 20 percent operational cuts!”

Financial Picture

Most presses close their fiscal year in June. According to their latest projections for the 2020 close this month, most are expecting to miss budgeted revenue by 5-15 percent, mostly due to poor fourth quarter print sales during the pandemic lockdown. Presses spoke of having strong sales through the first three quarters which helped to mitigate the downturn. All institutions reported major cuts in operating expenses from moratoriums on travel and conferences, while at some, salary freezes, limited unpaid furloughs, and unfilled positions will contribute to offsetting the sales shortfall, although not entirely in some cases.

The picture is decidedly more pessimistic for FY 2021. Projections of 20-40 percent decreases in revenue are the norm for the presses we spoke with. All presses expect cuts to library collection budgets and drastic cuts to library book budgets, especially print. More optimistically, presses noted that during the move to online classes, libraries were scrambling to meet faculty and student demand for books which they usually supplied from the stacks. This could bode well for growth in institutional sales of digital books, but with the cutbacks expected, that may not materialize. One director put it this way, speaking of publisher and aggregator offers that extended complimentary access to books during the COVID crisis: “I hope librarians will see how valuable this time-limited access to digital books has been and will begin spending money on ebooks rather than print. But it’s quite likely that the library side will completely dry up next year because of budget constraints for print and electronic both.” Moreover, there is concern that some e-books models do not provide a sufficient replacement for print revenues. Beyond books, presses with journal programs are looking for guidance from libraries on how they will choose to renew serial packages. There is worry that journal subscriptions, which are often the most dependable and profitable part of a press’s publishing program, may see significant revenue shortfalls due to library cancellations. On the other hand, there is optimism that the retail market will rebound (Amazon book sales took a huge drop in April as essential goods were prioritized for sales and shipping but recovered in May) and help to counter the predicted drop in institutional sales. “I’m bullish on the retail sector,” one director commented. “Books are such an inexpensive entertainment in an era of social distancing.” Regional lists are also a bright spot for some, but presses will need to find alternatives to in-person author events, and there is concern about how a drastic drop in tourism might undermine presses that are disproportionately dependent on regional sales.

With these sharp drops in predicted revenue come expectations for reductions in expenses. Many presses are awaiting final guidance from their administrations, but are anticipating cuts in the range of 5-20 percent. Scenario planning to achieve these cuts is underway. While presses expect to continue to achieve savings in categories such as travel, in-person exhibits and conferences, conversion from print to electronic for promotional material, and more painful line items such as salary freezes, unpaid furloughs, and even suspension of contributions to employee retirement funds, that still may not be enough, especially for smaller presses asked to generate more savings. Cutting too close to the bone is a worry for presses with fewer resources to ride out the crisis. One director put it this way: “After all the other operational cuts, if I can’t find enough savings I may be forced to do layoffs and reduce cost of sales by publishing fewer books, and that becomes a death spiral.”

Directors, at least so far, are expecting their universities to continue to provide the same level of subsidy. But many presses, even those used to operating at break even or better, are expecting to run deficits, and sustainability may be even more difficult for smaller presses. For instance, one small press director who reports to the library told us that her 2020 deficit will likely double, leaving the library with the responsibility to make up the shortfall from its own operating budget. On the other hand, presses with sizable cash reserves and endowments are likely to weather the storm and even see an upside. One director of a large press put it this way: “We’re going to be opportunistic. We have decent reserves. If we can project a good ROI on an opportunity, we’ll be putting the case to the university.”

In the next analysis of university presses, we will turn from the current situation to expectations for the future.