Rice University Press Closes and Why Size Matters

By | August 27, 2010

Rice University Press is being shut down next month, ending an experiment in an all-digital model of scholarly publishing. University officials said that they needed to make a tough economic decision to end the operation, and they acted against the recommendations of an outside review team that had urged Rice to continue. The move ends a high-profile experiment in digital university-press publishing. Closed once before, in 1996, the press was reborn in 2006 as an all-digital operation. But it had proven too expensive to sustain even in its new form, according to a statement by Eugene Levy, a Rice professor of astrophysics who stepped down as the university’s provost in June.

“The hope was that, without the burden of having to maintain a print inventory, the press might sustain itself largely on revenues from print-on-demand book sales,” Levy said. “Unfortunately, book sales remained very slow, and projections discouraged the anticipation that revenues would, in the foreseeable future, grow to a level that could materially cover even minimal costs of operations. Combined with pressures on the university budget from the broad fiscal crisis of recent years, the university concluded that it could not continue indefinite subsidy of the RUP experiment, as painful budget reductions were being absorbed across the entire university, including in the core of Rice’s educational and research mission.”

Supporters of academic publishing had high hopes for the Rice project, which was launched in 2006 with the goal of merging scholarly peer review with the convenience and low cost of digital publishing. Some supporters are in discussions about raising private support to continue the press as a scholarly publishing outfit that might not be attached to any single university. In other words, a University Press in a certain region to support multiple universities.

The demise of the project led to speculation about whether the Rice experience suggested difficulties for the digital printing business model. Especially after rumors spread that the University of Scranton Press was being shut down and the suspension of Southern Methodist University in May. While the Scranton and SMU presses are larger than Rice’s, they are both relatively small. And these are not new. Threats of the closure of university presses are ongoing. For example, the operations of both Louisiana State University and Utah State University were at risk in 2009, but survived – closures have been rare.

Levy said that the press was costing $150,000 to $200,000 a year. Admittedly, I have not done any work for any of these universities, but my experiences with university In-plants and other in-plant printing facilities is the same – it’s all about matching print demand to the investment in equipment. The reasons are obvious. There are different categories of digital printing devices and finishing equipment that range from slower, less expensive equipment to faster, more expensive equipment.

It’s not unusual for in-plant printers considering an equipment purchase to jump right into the deep end and buy the faster, more expensive equipment and build the infrastructure to support it. I often see in-plants make investments in 90 ppm black and white devices, 30 ppm color devices, automated finishing equipment and MIS systems with estimating, job ticketing, and billing modules. This level of investment is very productive but assumes a fairly high demand and if the demand does not exist or is not developed quickly then you are losing money.

Often critics oversimplify this issue and say that it does not make sense for Universities to have their own press, or companies to have their own in-plant printer. But the real questions are how important is convenience and low cost self publishing, what is the demand and could you cost justify the demand.

What do you think? Are you a fan of University in-plants or University Presses?

Howard Fenton is a Senior Consultant at NAPL. Howie advises commercial printers, in-plants, and manufacturers on workflow management, operations, digital services, and customer research.

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7 thoughts on “Rice University Press Closes and Why Size Matters

  1. Dan

    It’s not at all surprising to see this! This has been the same story for over three decades. In-plants, on average, do not provide the cost savings when you consider the overhead is concentrated more so then in commercial/quick print operations. It seems the efforts to “save” an in- house operation is more about egos and status then business common sense. Folks, in today’s world, print is not a hobby!

  2. Buzz Tatom

    I agree with Dan. This phenomena seems to go in cycles of the business environment. When times are good organizations talk themselves into that they can save money on their printing. They should really consider the down market when they are still carrying the overhead of people that they need to staff yet have very little work. What we find is the guy who made the call to purchase equipment is usually gone either before or in fighting for his fiefdom it becomes apparent he isn’t looking out for the best of the organization.

  3. JB

    A well-managed in-plant printing operation should always be more cost effective than its commercial counterparts IF there’s enough of the right kind of work that fits the capabilities of the equipment. The work needs to fit the equipment, and there needs to be enough of work to keep the equipment busy at a 75/80% utilization rate (or better). As the previous authors suggest, overhead needs to be minimized (i.e., less than that of commercial counterparts) and the right kind of equipment obtained. As with any business, expenses need to be managed well – such as labor, space, supplies, depreciation, etc. Please notice that I have said “well managed” and prefaced with “IF.” Not all in-plants do those things. Plus, the absence of other expenses an in-plant doesn’t have (sales commissions, owner profit, possible lower taxation (non-profits), etc.), will increase the savings. Furthermore, if the in-house print dept. handles the buyout of the commercial printing, the ability to manage well, load equipment fully, and keep people busy is significantly enhanced.
    – Alive and well in Minnesota

  4. Howie Fenton

    Wow interesting and provocative posts. I’m not sure I agree with the statement that most inplants “do not provide cost savings”. Of the six inplant projects, I have done in the last year, 3 received high marks and are thriving and 3 got low grades and are gone. I have seen inplants that are competitive with commercial printers and that offer unique value and others that do not. And I would agree that matching demand to capacity is critical as is good management and competitive pricing.

    Has anyone else seen inplants that succeed?

  5. Mihai Paunescu

    I am a fan of University Presses.
    As Dan said before, print is not a hobby (well for me it is but that’s about something else) that’s something to be take into acount.
    Rive wanted again a posibility to publish. They named the project “an experiment” and tried to experiment as litle as posible.
    I’m not at all surpriseb by the end result.
    What if they chose an all digital effort. No printing at all. That’s really an experiment for a University Press don’t you think?

  6. Ray

    First let’s establish something: A University Press and a University In-Plant print shop are totally different entities. A “Press” is a publisher and performs all of the functions of a publisher, including production/production management. It may or may not – usually not – print internally and if it does it may/may not sell services (copies) to the university. The article states that the University press attempted to go to a POD model as a way to avoid inventory costs (it costs $$ to print books and demand forecasting on academic publications is not an exact science) but apparently they lacked the demand to sustain operations. Not surprising for A PUBLISHER.

    Now to the comments on in-plants. Being a commercial printer does not imply efficiency or cost effectiveness. It just means that you can sell your stuff for more than it costs you to make it. As a doctoral candidate studying outsourcing in higher education, I can tell you that I have yet to find a study that meets academic standards (meaning that it’s not hype by a vendor or special interest group) to support the notion that outsourcing printing saves money. If you know of one, send along.

    BTW University Presses and University in-plants rarely work together. They are dealing with completely different products. A few of the largest University In-Plants may print books (hard bound, smyth sewn, etc) but not many and certainly not one at an institution the size of Rice.

  7. proclaimation

    University of Nevada Press is going to outsource its warehouse and customer service. I think an University Press ability to survive on the future is dim. Many will be completely shut down due to lack of funds. There’s importance is at the very end of the scale compared with departments that bring in grant money or lead in research. It doesn’t have to be this way but it is. I give the smaller presses maybe two more years.

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