Recently I attended a presentation of a new and thriving information service for scholars. It was pretty nifty. The software was good, the feature set robust. The service has gotten a great deal of traction on the Web and now boasts a large and growing user base. Business model? Well, not too much on that, though it was apparent that part of the attraction of the service was the sharing of documents published by third parties. The presentation was well received.
The irony of this was that not long before I had had a conversation with a publisher about this very service, who described it as “a lawsuit waiting to happen.” I changed the subject, as I did not want to get caught in a crossfire, but I did wonder how matters had come to this.
What I wondered about was not whether the new service infringed anybody’s copyrights. That’s a legal matter, best left to lawyers. What I wondered about was why the publisher I had spoken to was waiting for the lawsuit. I would have thought (considering how expensive and time-consuming litigation is) that a better strategy was to try to avoid a legal dispute. Why hadn’t this publisher created a service very much like this before the upstart got the idea?
This is a question I ask myself repeatedly. The supreme example of this is arXiv. How in the world did the physics publishers get beaten to the punch on a simple preprint-sharing service? Creating such a service would not have been hard to do. Especially ironic is the fact that the publishers themselves were in a privileged position to hear the complaints that authors had about the traditional publishing system, especially the long delay between the submission of an article and its publication, one of the key motivators for building arXiv. Was Paul Ginsparg the only person on the planet at that time who knew how to use a computer?
We can stack up other examples of services that could very well have been conceived of by publishers, but instead were put together by others, who did not necessarily operate with publishers’ interests at heart. Book digitization was something that librarians wanted for years. Did no publisher hear what librarians were saying? It should not have taken Google to come along to get this project started. Or Creative Commons: here is a way to streamline the cumbersome rights and permissions process, which I would think that even the most beady-eyed publishing accountant would agree is a great idea, but it took an academic lawyer (and no friend of copyright), supported by philanthropies, to get this moving. Or there is the orphan works situation, which is silly. Here are books without commercial significance (otherwise they would not have gone out of print), but rather than come up with a practical solution to this, publishers have allowed the cause of orphan works to be taken up by groups who see it as a way to overturn the entire copyright regime.
This list could go on and on (A rights registry, anybody? Oh, yeah, and how about online bookselling?), but the point will be the same: by failing to get ahead of the curve on things like this, publishers leave a vacuum for others to fill; and those others are often people and organizations that either don’t have much interest in the concerns of publishers or even see these new services as a wedge to overturn publishing models completely. When you don’t do it yourself, others do it for you, and they do it to help themselves, often at your expense.
Publishers have a number of options to deal with new services and challenges to their positions, some of which are better than others. Let’s work through the list:
Preemption. This is the preferred path. The preemptive publisher looks out and tries to assess what kinds of things others may launch. This is a tough thing to do because (a) you can’t think of everything, (b) some of your rivals may have no concern about business models and thus may taunt your enterprise with a service that cannot make money, and (c) you have to fund all these things and put some of your best people on them. But the benefits to the preemptive publisher are large, not only in anticipating challenges to the organization but also in putting the organization in a position to exploit those new services. It also does not hurt to be viewed as a serial innovator.
Cooptation. Since you can’t have all the bright ideas yourself, you will inevitably stumble across things that you failed to preempt. Cooptation is thus a fallback strategy. A publisher may approach a new service and try to develop marketing arrangements. Since so many of these services struggle financially, waving some money around could influence the upstart’s direction. The most extreme form of cooptation is an acquisition.
Legislation. This is what was attempted with RWA. Whatever the merits of RWA, seeking a legislative solution goes in the category of “be careful what you wish for.” Today’s compliant congressman is tomorrow’s industry opponent; as Will Rogers wisecracked, America has the best politicians that money can buy. Besides, it’s not as though Congress can pass a law and then expect everybody to observe it. We already have on the books a requirement that researchers who receive federal grants must submit a report on their work, but this is honored more in the breach. Don’t call your congressman; call your head of business development.
Litigation. There will always be occasions where litigation is necessary, but a preemptive publisher aims to keep these occasions as few as possible. The problem with litigation is that it drains an organization of management resources while the litigation proceeds. I have yet to see anybody attempt to quantify the opportunity cost of having a CEO kill a couple hours every day in meetings with lawyers. Another problem with litigation is that it is immensely unpopular. A publisher can sue someone on principle, but lose far more in branding as the publisher’s action gets pilloried on the Internet. There is a problem with a “no-litigation” strategy as well, as it may make the publisher look like a pushover and thereby invite others to challenge the publisher’s prerogatives. Litigation may be the course of last resort, but it is the mark of a skillful management team never to reach that point.
Toleration. Sometimes it’s best just to turn away. I had a conversation with a publisher who was incensed about the NIH’s policy concerning open access, but upon investigation, he discovered that only a small number of the authors he published had received federal grant money and were subject to the NIH guidelines. While no one should tolerate a gross abrogation of rights, it’s not always wise to stand up for principle for what has little value in practice. Toleration is a bet on the fecklessness of many high-minded organizations and governmental bodies, which may not be able to implement the programs they so ardently fight for.
But this brings us to another strategy: innovation. Or perhaps we should call it distraction through innovation. When a company has a record of ongoing innovation, it can distract people from other actions it takes. There will always be lawsuits, and Apple files many of them, but the media and the public are too caught up with Apple’s new gadgets to pay much attention to Apple’s corporate strong-arming. Innovation is valuable in itself and it is valuable in shaping a company’s image such that the organization can get tough when it needs to. But the more innovative a company is, and the more preemptively it acts, the need to get tough diminishes.
Moving an enterprise forward — if you must be a target, be a moving target — is the best defense. The next time you see a presentation of a gee-whiz new technical service, let it be yours.