Formal Annual Report for 2007
Commercial in Confidence; please exercise discretion and do not release to those who might pass this on to competitors.
It is well understood by contributors and editors that The Literary Encyclopedia seeks to provide an integrated information resource for English-speaking students, amateurs and professors of literature. In practice this means that we provide biographical information about major literary, philosophical, historical and cultural persons; descriptive profiles of major cultural works, and introductory coverage of the history of the English-speaking peoples and those non-English cultures whose literatures are included.
In 2006-2007 we have been increasing our rate of commissioning and currently have over 1000 new articles scheduled for delivery in 2008. Nearly 200 new contributors have joined us since September 2007 and we now have a total cadre of 1740. We have also been consistently improving the historical detail of our information in many respects, and we will be continuing this work in 2008 and 2009. By way of example, our listing of historical events, which gives context to literary activity, has increased this year from 1600 stub entries to 4000, and is about to increase by a further 3000. Many of these stubs now have sufficient entries to orientate the literary reader and we aim by 2009 to provide short descriptions of all major world events since 500 BCE, and more mentions of significant events in Europe, North America and the English-speaking world.
The salience of this work is more and more revealed through the latest feature we have added – “author timelines” which give month-by-month calendars for major authors, and which integrate with historical timelines to reveal the cultural context. We aim to commission many more of these timelines this year, aiming eventually to have one for every major author.
The other major software innovation this year has been the process for adding annotated lists of recommended reading. We will send a briefing circular about this process in February. We aim to add 10,000 recommendations in 2008 and a similar amount in 2009. This will then become a huge scholarly boon and a considerable reason for libraries to subscribe to our publication.
If I may speak for us all, I would like to thank all who have contributed their time and knowledge to The Literary Encyclopedia this year. Through your work we go from strength to strength and can share a healthy sense of pride in our collective achievement.
Budgetary Review
For those who have joined us in recent months, some narrative may be helpful.
When we appeared before the world in October 2000, we hoped that advertisements would enable us to pay our way and remain a free-to-user resource, but by October 2005 it was clear that even with the 8 million page-views per month the advertising revenue was never likely to be more than a mere trickle: Google adverts pay tiny fees (0.01 cents), Amazon only pay commissions if purchase occurs within 24 hours, and the marketing budgets of academic presses are so small one wonders how they survive. In consequence The Literary Encyclopedia was running into debt in an unsustainable way.
We decided we had to seek subscriptions, implemented the necessary software, and started collecting individual subscriptions in December 2005. By August 2006 we were able to offer institutional subscriptions. The process of becoming commercial was expensive, and by the time it was achieved our accumulated deficit had reached ?75,000. However, since early in 2006 we have covered all our costs of development and we now have 56 institutional subscriptions. In 2007 income from individuals and Ask Jeeves (the only commercial link we maintain, and this because it pays well) reached ?24,000, and institutional subscriptions reached ?8500. Expenses were ?30,000. In 2008 we expect individual memberships to earn about the same amount, and institutional subscriptions to rise to around ?20,000, giving a budget of ?40,000. Whilst the competition what is challenging we have the respect of librarians, colleagues and users, and we are adding features which are very attractive. The addition of annotated recommended reading will be a particularly strong feature and may well enable us to double the charge to individuals, as well as commending us strongly to librarians. We thus expect to be able to increase institutional subscription income to at least ?60,000, and possible ?80,000 by the end of 2010, and at this point the publication will become profitable on a year-by-year basis. Thereafter the prospects are enticing. We believe the publication can thrive with two assistant editors who should be paid on the UK lecturer scale as soon as we can, implying annual wage costs between ?60,000 and ?80,000. Other expenses (interest on debt, accountancy, software) should be around ?20,000, implying annual running costs not exceeding ?100,000. Revenues, on the other hand, should increase with the extent of information provided: We believe we can achieve ?300,000 from institutional subscriptions by 2012. Revenue could be less, but it could also be very much more since there are at least 3000 potential subscribers in higher and further education around the world. Assuming we meet our 2012 target we would expect revenues to increase to around ?1m per annum between 2018 and 2020.
Assuming we have published 7000 articles by 2011-12, this implies earnings per article of about ?30 p.a., thence rising as profitability grows, perhaps trebling by 2020. Whilst the rate per annum is less than what one would normally be paid for such an article, the earnings across time could be considerably better than a one-time fee. Furthermore, the equity value of the publication would be at least 10 times profits and once there are profits of a substantial order we envisage developing a share buy-back scheme which will enable contributors to take equity value out of the publication if they wish.
Finally, the compelling logic of all our efforts rests on our contributors recommending the publication to students and colleagues, and helping us to achieve institutional subscriptions. Once the habit of consulting The Literary Encyclopedia takes hold, its use can become very impressive: in November 2007 students at the University of East Anglia accessed the publication over 1200 times, primarily because we promote it to the large first and second-year courses. Please liaise with Alison Searle about setting up a trial for your university, but do not rest at that – it is important to enable colleagues to consult the publication and we will gladly provide individual inspection facilities for any colleague you wish to recommend.
Costs and Staffing in 2007
Costs in 2007 break down into the following heads:
Internet servers and computers
2400
Wages
14000
Interest
5000
Software development
8500
Total
29900
Software costs remain very low because we have no hierarchy of managers and intermediaries to support, and because Robert Clark invents everything needed in maquette form before web coding begins, so our costs are a small fraction of commercial rates. Staff costs were very low because we had only part-time support from Cris Sandru during the period August 2006-August 2007. In September 2007 Cris accepted a post at 0.6 FTE, and in the same month Alison Searle joined us full-time. The publication now has 1.6 FTE editorial assistants and has been able to develop very much more quickly as a result of their support. Other editors, including the General Editor, work for shares in the publication like everyone else and are not otherwise remunerated.
Growth in Articles, Contributions and Editors
In 2007 as a whole we published 575 new articles. In the last quarter of 2007 we agreed 379 new contributions, many from contributors new to the publication, and published 170, which implies, all being well, that publishing may double across the next year. This is in part thanks to the efforts of Cris and Alison, and in part thanks to increased commitment by our editors. Here we are particularly pleased to note the rapid increase in coverage of French literature, and the recent appointment of Professor Jacqueline Eales (University of Canterbury) to develop the seventeenth century, Dr Liapis Vayos (University of Montreal) to develop classical Greek literature, Dr Richard Dance (University of Cambridge) to take over from Hugh Magennis in Old English, Dr David Huddart (Chinese University of Hong Kong) to develop post-colonial, Dr Nick Selby (University of East Anglia) to develop postwar American poetry, Dr. Christopher Gair (University of Glasgow) to develop postwar American prose, and Professor David Roberts (University of Birmingham) to develop Restoration drama. Further appointments are expected shortly.
Software Innovations
Apart from author lifelines and recommended reading (mentioned above), many small improvements were made during the year, and our other major achievements were to install Shibboleth user-authentification which is the evolving standard for libraries and to install COUNTER compliant reporting of usage statistics, also required by libraries. We also survived two phishing invasions of our server during the summer, which tested our mettle and had not insignificant costs.
We are currently working on further improvements to author lifelines, the Contributor and Editor Interface, and improved representation of historical and political geography.
Review of Aims, in relation to current commercial situation
When we founded The Literary Encyclopedia ten years ago, we already realised that the web would make it possible to harness international scholarly co-operation to create an unparalleled reference work. We also were aware that established print-publishers were moving to digitalise their back-catalogues so that they could defend their existing commercial dominance. However, we thought then, and still believe, that this was not good enough: firstly, some of us are concerned that publishing should not be dominated by the shareholders of four multinational corporations. (It is interesting to note in this respect the sale during the year of Gale Research to a hedge fund for around ?4 billion.) Secondly, we believe the web makes it both possible and necessary to constantly update and revise, and also possible for authors to achieve much more appropriate returns from their scholarly investments and abilities. Thirdly we believe the web makes it possible to reconsider what a “reference work” is, allowing the invention of many new ways of looking at information.
We now find our original conceptions and beliefs more and more vindicated. Librarians do not like being encouraged to pay for major online reference works which offer old articles, some of which are marvels, but some of which were of dubious value even when first published. The Literary Encyclopedia is the “new kid on the block”, all of it being published since 2000, and all of it being created within a very refined and purposeful digital environment. We have independent adjudicators who tell us that article for article we are better written and more helpful to the reader, and that readers can get to our materials more quickly and surely than they can with other web resources. Librarians are always very pleased with the quality of what they see and the professional and purposeful manner in which it is delivered. The only defect reported is when gaps in our provision are noticed, but this matter is being very positively addressed. We therefore remain confident that the publication will achieve considerable financial success within the targets indicated above.
Robert Clark
Editor and Managing Director
19/01/2008