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Copyright Clearance Center Acquires Infotrieve
by
Posted On November 18, 2014
Copyright Clearance Center’s (CCC) acquisition of Infotrieve raises several questions about integrating the two companies but answers the one about when the private equity owners of Infotrieve will cash out. The acquisition was announced on Nov. 6, 2014, and Infotrieve became a subsidiary of CCC on that day. Infotrieve’s CEO, Ken Benvenuto, will temporarily remain in an advisory capacity during the transition, reporting to Tracey Armstrong, CCC’s president and CEO. The combined company will serve more than 35,000 customers in 140-plus countries. Analyst firm Outsell estimates that the combined firms will have revenue of more than $311 million for fiscal year 2014.

As is obvious from its name, CCC is primarily concerned with copyright issues. It specializes in rights management and licensing on a global scale. The CCC Facts page states that it is a “[n]ot-for-profit organization started in 1978 by a collaboration of content creators, content publishers and content users.” Distribution of royalties to publishers has been steadily growing—it was $188.7 million in fiscal year 2013 and $192.5 million in fiscal year 2014. CCC has also developed software to facilitate managing copyright and licensing.

Infotrieve began as a document delivery company in 1987, based in Los Angeles. As such, it has always had a business relationship with CCC. Sold by its founders to private equity interests in 2003, it is now headquartered in Wilton, Conn. It secured $21.8 million in funding in January 2004. Venture capital firm Trident Capital led the Series B funding with $12 million, and supporting firms Signal Equity Partners (which led the initial Series A funding) and Boston Millennia Partners supplied the remaining money. Another round of funding in 2007 pumped an additional $5 million into Infotrieve from the same three firms. Terms of the sale to CCC were not disclosed, but the amount of money invested by Trident, Signal, and Boston Millennia provides a hint.

Both companies are also in the SaaS and software development business. In June 2014, CCC launched DirectPath, which integrates copyright management into content workflows, and it has had its RightsLink program in place for years, most recently modifying it for open access (OA) publications.

Infotrieve’s Mobile Library service is designed to not only maximize document delivery but also to become part of the corporate researcher’s daily life, enabling access to external databases, research literature, internal repositories, and personal files on mobile devices. It’s very likely that it was Mobile Library that caught CCC’s attention. According to CCC’s Armstrong, Infotrieve adds “a new portfolio of complementary license and workflow offerings for our corporate customers, taps new growth potential for our publisher partners, and strengthens CCC’s mission to make copyright work for everyone.”

Partner and Customer Reaction

In June 2014, EBSCO Information Services announced a partnership with Infotrieve to provide its EBSCO Discovery Service via Mobile Library. Tad Goltra, VP of product management at EBSCO, sees little changing because of the acquisition. He says, “We are excited about our partnership with Infotrieve and look forward to continuing to provide mutual customers of EBSCO Discovery Service and Mobile Library with a best-in-class research solution that includes discovery, content access, rights management, and document delivery.”

Goltra’s reaction is typical of most publishers and corporate partners. Outsell’s chief analyst Leigh Watson Healy notes that for publishers, “it’s business as usual.” But she also characterizes enterprise information professionals as reacting with “cautious optimism.” They might be concerned with the “bigness” of the combined companies. For document delivery, they could consider alternatives such as Reprints Desk, a company founded in 2006 by Peter Derycz, who was also behind the formation of the original Infotrieve.

In the past decade, Infotrieve expanded beyond document delivery into outsourcing in the corporate environment, particularly for pharmaceutical companies and financial firms. Infotrieve employees are embedded in corporations to function not only as interlibrary loan specialists, but also in other information roles. At least one major pharmaceutical company has two Infotrieve employees doing basic archival processing work in its corporate archive. Infotrieve is adept at other internal information professional tasks that corporations desire to outsource.

Also interesting is how Infotrieve’s excursion into text mining will be implemented by CCC and perceived by customers. Its pilot project was with biopharmaceutical company UCB and in collaboration with six life science publishers. Whether CCC will continue with text mining is unclear.

Challenges of the Acquisition

Although CCC and Infotrieve are compatible on many fronts, both philosophically and technologically, the embedded nature of Infotrieve’s workforce may prove to be an issue for CCC. The company has the obvious challenges of integrating different platforms and consolidating the back office functions of fulfillment, sales, account management, and customer service. Most important, according to Armstrong, is bringing both companies’ content rights assets to the Mobile Library platform.

Healy says, “If CCC can deliver on the promised benefits of a comprehensive platform and services to empower enterprise users to find and get immediate access to all of the content—along with the rights information governing it—needed to do their jobs, the firm has the potential to support discovery, remove friction around copyright compliance, deliver on demand, speeding users’ access to content, and publishers’ paths to royalties.”

This acquisition consolidates a large amount of the global content management and copyright compliance in one company. Publishers should welcome the consolidation, as their royalty checks will now come from one company rather than two. The rights agreements that CCC and Infotrieve have in place with suppliers should be relatively simple to standardize. The question is how enterprise customers will react to the implications of data collection on document delivery transactions, given the combined company’s massive customer base and its increased ability to mine transactional and article-level Big Data.


Marydee Ojala is the editor-in-chief of Online Searcher magazine, chairs WebSearch University, and is Program Development Director for Enterprise Search & Discovery.

Email Marydee Ojala

Related Articles

6/5/2014EBSCO and Infotrieve Combine Solutions
6/10/2014CCC Introduces Copyright Compliance Solution
7/10/2014Infotrieve Develops Text-Mining Solution
8/26/2014ACS Adopts CCC's RightsLink for Open Access
1/15/2015CCC Hosts Discussion About OA Practices
1/20/2015New Reprints Desk Widget Acts as Research Aid
4/9/2015CCC Forms Partnership for Rights Licensing


Comments Add A Comment
Posted By Ian Palmer11/20/2014 3:29:59 AM

Thanks for the thoughtful analysis of this important industry news. Reprints Desk's founder Peter Derycz, who is also the original founder of Infotrieve, has shared a few thoughts in a post entitled 'Comments on CCC’s acquisition of Infotrieve' on The Article Blog, which we encourage you to view and comment on online at http://info.reprintsdesk.com/The-Article-Blog/bid/108847/Comments-on-CCC-s-acquisition-of-Infotrieve
Posted By John Chu11/18/2014 8:53:40 PM

Hello Marydee,

Thank you for your great analysis. I have been waiting since 11/6 to see a thought leader like you commenting on this major acquisition by the CCC.

I ma surprised that you did not mention CCC's acquisition of PubGet in and more importantly, how does the Infotrieve doc del business will fit in with the prior acquisition.

http://www.copyright.com/content/cc3/en/toolbar/aboutUs/newsRoom/pressReleases/press_2012/press-release-12-01-09.html

You also did not mention that CCC is still actively pursuing the "article rental" business model for doc del which is to me a paradigm shift. My understanding is that Reprints Desk is aggressively deploying the similar article rental model partnering with Deep Dyve.

Finally, it seems Wiley is adding yet another twist to this trend by offering a three tier pricing model (rent, cloud and purchase). I am sure there are other publishers following this path that I am not aware of.

It will be great if you could address the above with your analysis and insight.

Sincerely,

John Chu

P.S. I am not surprised by the temporary tenure of Ken Benvenuto as I am sure you know well that CCC's treatment of acquired entity's executive management is not exactly inclusive nor embracing. The most recent example is of course PubGet's Ryan Jones.

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