What's the Future of Legal Publishing? (To Anonymous)

Ok. Anonymous, here's an attempt to clear up my earlier post on Westlaw and Lexis. I grant you that stock price isn't necessarily an indicator of profitability. But for a company with a virtual monopoly on a very important (critical?) product, with an ever-expanding market, it seems to me that they should be doing better than they are. (Ie., Not raising prices at double the rate of inflation, not complaining about declining sales, etc.)

Let me try to explain my cynicism about their business models:

Here's a couple of facts that I observe about the state of legal bibliography:

1) the director's email listserv is buzzing with talk of canceling print subscriptions to reporters, looseleafs and costly, large treatises;
2) prices of legal materials are rising at about 10% per year, and more;
3) cost for access to the very titles being cancelled in favor of academic subscriptions to online services is substantially less;
4) each company has become publicly held in the past fifteen years;
5) stock has remained virtually unchanged in value since Yahoo! Finance charts report - shouldn't it have been going up?;
6) the quality and quantity of free government and court information are both increasing; and,
7) publishers complain/comment ceaselessly on declining sales of print materials. (They seem to be blind to the fact that their pricing policies on these materials is making them unaffordable. This is probably the biggest reason sales are declining. But that’s another topic....)

Taken altogether, it seems clear that both companies’ present business models are threatened. Their positions with respect to LMA’s and public access contracts are ruthless and even seem desperate.

What is most puzzling to me is that the Big Two/Three legal publishers just can’t seem to adapt to the current climate. Instead of enhancing their valuable assets - secondary materials - they appear to be focusing on primary material (at extravagant prices) as their primary business. Primary material is free information that is in the public domain. All that the publishers can really do to make a product that is more valuable that mere access to primary material is add their intellectual property: digests, case-verification tools, treatises, handbooks, encyclopedias, etc. These tools provide the intellectual structure that overlays the whole field of primary sources and helps practitioners and citizens make sense of it all. But as they see their subscription base decline, they appear to be simply raising the prices to make up for falling revenue.

The BT/Th should be innovating. Offering users something that’s new and useful and that exploits the fantastic catalog of secondary materials that they’ve built over the years. They should be building mobile device/iPhone apps and 2.0-sites that serve up indexes to all their material: Digests, KeyCite and the whole catalog of secondary materials.

In the end, they could easily cease publication of many books and provide cleaner and more useful access to these valuable tools of research. For instance, why do they publish the Digests at all? A mobile/web app can provide better access to digest information than can a print volume. Likewise, a mobile device can provide better indexing to all their materials than can their print indexes.

As their profits temporarily rise, primarily because they are selling less and less at higher and higher prices, they have to adapt or end up in a curious conundrum: they own the most valuable and important assets to legal scholarship and research, but won’t be able to sell them to anyone anymore because their won't be able to afford them.

Then what?