English: Cat sleeping
English: Cat sleeping (Photo credit: Wikipedia)

Ho, hum. Another day in the world of research journals publishing.

For all the talk of disruptive technology, it’s hard to find evidence of it anywhere. This is true not just of journals publishing, whose arc for the next several years seems clear, but for most other publishing segments as well. The K-12 publishing business continues to be dominated by three giants, and is likely to continue to be dominated by them in the foreseeable future. What disruption that has taken place in K-12 has not been technological in nature; the biggest disruption is the growing reluctance to fund public education, but you hardly need a computer to know that people don’t like to pay taxes. Trade publishers are supposed to be doomed, doomed, doomed.  Meanwhile, they grow modestly and make more money than before, as they reap the higher margins that ebooks make possible. I can’t imagine that any trade publisher likes Amazon’s growing dominance, but for all the news, the fact is that Amazon has disrupted other retailers, not publishers. The college publishing area seems ready to implode, but it hasn’t:  the same five publishers continue to generate the vast majority of revenue, and those same publishers are now using digital technology to license campus-wide access to their texts, augmenting their market share and driving a stake into the heart of the used-book market.

Yes, there are disrupted segments. Reference publishing is a fraction of what it used to be (I write as the former CEO of Encyclopaedia Britannica), and anything supported by advertising continues to suffer as the huge inventory available to advertisers on the Internet has driven prices down. Nor should we expect the disruption to stop there.  But for now at least, it hasn’t really penetrated to the heart of the revenue streams of the other segments.  Journals publishing continues to grow modestly every year, even before taking the additive revenue from the Gold OA services into account. It’s a mature business, not a disrupted one. And for those who need more persuading, please see Michael Clarke’s excellent Kitchen post on this subject from three years ago. I repeat: Michael wrote this three years ago.

So if there has been no significant technological disruption of journals publishing, why is everyone running around as though it were the end of the world? In part this is because people don’t distinguish between disruptive technologies and sustaining technologies, but it’s also because for many people, any kind of change is a disruption. You used to have a workflow that generated PDFs at the end, which were then used for print editions and were also mounted on a Web site. Now — horrors! — you are told that the PDF is not enough.  You need HTML and you need a format-agnostic workflow. So you make some investments, you may switch some vendors, and some staff may be shown to the door. None of this is fun, but it is not disruptive to the business. It may be disruptive to the vendor that lost the account and it surely is disruptive to people who are dismissed, but the same old business continues on its way, sour expression in its face, receiving 85% of its revenues from academic libraries as it has for years.

Most innovations are in fact sustaining innovations, and most of them are cooked up by established companies; the largest are the most innovative of all. We tend to overlook this because of our cultural bias, at least in the U.S., which regards any large, established organization as an incarnation of Stalin working deviously to raise the price of apple pie. O, give us the lonesome cowboy any day, who rides into town and shoots up the cabal of bankers and thieves!  Cowboy-infested PubGet gives us an entirely new view of how to discover and manage academic materials, and no established publisher dreamed it up. Mendeley created a huge community for the sharing and management of scientific documents, a posse of cowboys until the very end. But now Mendeley is part of Elsevier and PubGet has been acquired by CCC. Our cultural bias gets in the way of the facts on the ground, which are not romantic — the big get bigger, the big coopt technological innovations, the big continue to derive 85% of their revenues from academic libraries.

One would think that the new Gold OA services would be disruptive, and ultimately they may be.  In the meantime, however, the money flowing into them is mostly additive. That is, as predicted, the amount of money expended on scholarly communications is rising, not despite the growth of OA publishing but because of it. What makes Gold OA a very special kind of business activity is that it derives much of its revenue from a new source, authors or authors’ sponsors. OA publishing, at least of the Gold variety, differs from traditional publishing in many ways, but this, the new market, is the biggest difference of all.

So we have the sustaining technologies of the established publishers on one hand, the potentially disruptive technologies of Gold OA on the other. Over the next several years, though, these two paradigms are not likely to battle each other directly, much like China and the U.S. eyeing each other warily but stopping short of full and violent confrontation. A forecast for 3-5 years for academic journals puts the market at its current size or perhaps a wee bit bigger, with growth largely coming from Asia and perhaps Eastern Europe. That market is likely to be dominated by today’s leading players unless one buys another. In other words, in research publishing it’s going to be the same old same old for some time to come. And this is because for all the appeal of Gold OA, there is at this time no group of librarians from the major research institutions who are meeting with their provosts to recommend a 30% cut in their materials budgets, nor are provosts meeting privately to come up with ways to make comparable cuts over the librarians’ objections. The nature of institutional markets is resistant to radical change, and that resistance is precisely what the large commercial publishers feed on.

Meanwhile, Gold OA is growing and will continue to grow. The traditional publishers can only dream of growing so fast — and that is why so many of them are determined to coopt Gold OA publishing with services of their own. Over the 3-5 year timeframe we have two markets: the traditional one, served as before, and the Gold OA market, which forms a ring around the traditional market, adding to total expenditures but not fundamentally altering the prospects of the larger established firms.

What could change this are the new mandates for OA publishing coming from philanthropic associations and government funding agencies. (University OA mandates are the least disruptive as they add or deflect little or no publishing revenue.) Even by the ordinarily low standards of government policy, the recently announced OSTP requirements for the dissemination of scientific information are poorly thought out, but they are what they are and publishers will have to work with them. The new mandates will generate a flood of Gold OA papers, and there will be many, many new services to accept them.  This in itself will not undermine the large traditional publishers (who are seeking to start services of their own), but there could be a fall-off in the number of papers submitted to established publications, and some of these papers may be very good indeed. This could lead to lower impact factors, and that in turn could lead libraries to view some traditional journals with greater skepticism. But even in this case it’s hard to imagine libraries making drastic cuts to their own budgets.

So all that sustaining technology is really about staying in place. The mature, traditional business goes on, dominated by the usual suspects, but it does not grow significantly. It would be better if the people working in these companies spent less time worrying about disruption and more time thinking about why something like Mendeley had to be incubated on the outside.

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Joseph Esposito

Joseph Esposito

Joe Esposito is a management consultant for the publishing and digital services industries. Joe focuses on organizational strategy and new business development. He is active in both the for-profit and not-for-profit areas.

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Discussion

27 Thoughts on "Disruption Ain’t What It Used to Be"

“The nature of institutional markets is resistant to radical change, and that resistance is precisely what the large commercial publishers feed on.”

And

“It would be better if the people working in these companies spent less time worrying about disruption and more time thinking about why something like Mendeley had to be incubated on the outside.”

If you take the ‘you are what you eat’ analogy then publishers inevitably become resistant to change because of what feeds them. So such change resistors will resist ideas like Mendeley. I’m sure people in those organziations had the ideas. Those who made the decisions no doubt felt resources were better spent on sustaining the business as it is.

I have no doubt that it is true that those making the decisions felt resources were better spent on maintaining the business as it is, but they were wrong. Look at the price paid for Mendeley, assuming the reports are accurate. Letting other organizations do your R&D for you costs you much more in the end. Better a portfolio of a dozen new projects, most of which will fail, then a stunningly large acquisition 3-5 years down the road.

But this is only wrong in hindsight right? At the time, their ‘leading indicators’, based on past behaviour and experience of course, would have told them something different.

Business radars are generally built only to pick up signals for things they already understand or expect. And though there are many stealth planes out there most are false alarms.

So how does an established business know to call the difference between the many false alarms and the few genuine threats (aka opportunities)?

I one time sat at the dinner table with Mr. Jerry Kaplan, founder of the Free Press and President of Macmillan Publishing Company Inc. who commented that great publishers follow and never lead. He said this while we were talking about business that fail.

You are asking the hard question. My own view is that it is useful to study end-use at the margins of the community. That’s where the disruptive ideas get generated. It’s also important to work with people who are tuned into those marginal uses, people who may not play a large role in the established parts of the business.

I agree with most of this but the OSTP mandate is for green OA not gold, with a default embargo period of 12 months. Gold is allowed but not mandated and no federal funder is considering gold that I know of. This mandate is a deep blow to gold as the US has declined to follow the RCUK lead. Nor can I see China mandating gold. The prospects for gold by mandate seem pretty dim at this point.

Note that Australia has taken a similar path to the US.

Though the terms “Green” and “Gold” are perhaps a bit confusing here. In their purest forms, Gold means publishing in a formal journal, Green means publishing in a repository or something else. The OSTP policy calls for papers to be published in formal journals, but does not require them to be made immediately freely available through paying an APC. It also does not require deposit in a repository. So it could accurately be described as taking the Gold route, but not in the same way the RCUK wants researchers to take the Gold route.

Maybe it’s time for some new and better descriptive terms.

True but public concepts are often vague especially when they have political meaning. Gold often means APC gold while green may merely mean open on the publisher’s site after an embargo, with no repository. I doubt we can change these established meanings.

In the OSTP case one green solution is for the agencies to build a portal to the publishers’ websites, provided these meet the green mandate. No repository involved. At the other extreme PubMed Central might become PubFed Central for all the funding agencies. That wheel is just beginning to spin.

I may just be something of a pedant, but you’re right, the terms are somewhat convoluted between common use and the intent of those originally defining them. That’s part of the evolution of language, but to me the situation is complex enough at this point that it warrants new terms that clearly separate “free after 12 months on the publisher’s site” from “immediately free in a public repository”.

As for PubFed Central, I’ve heard rumblings as well, but the big issue there is cost. There’s no money in anyone’s budget to pay for a massive expansion of PMC. Without a big funding infusion or taking money away from funding research, it is unlikely to happen.

Yes we are now in the design phase for agency OA systems so a lot of discriminating language is called for. The options are very complex, as I have pointed out. Multi agency regulatory systems are never simple. Whether this gets to the public level is another matter. As for cost I also agree but the agencies must do something. Surprises may await us.

Thanks for the link. But I do not expect anything substantive from the agencies that soon, except a few trial balloons. In fact I wonder if the draft plans submitted to OSTP in August/September will be made public? By surprises I am reminded of the Competes Act requirement that NSF publish its research reports. Instead they created a tiny new short form report and publish those at Research.gov. The agencies can be very creative.

I should add that the publishers can also be very creative so things are cooking on the OSTP front.

It would be better if the people working in these companies spent less time worrying about disruption and more time thinking about why something like Mendeley had to be incubated on the outside.

But Mendeley was incubated on the inside as well, or at least its equivalents were created and run for several years as things like Connotea (NPG) or 2Collab (Elsevier). Neither of these had the longevity or the uptake rate of Mendeley and the reasons for that are perhaps a more interesting question.

Longevity: Connotea and 2Collab were likely both killed off in part because neither had a business model that was going to provide return on investment. Mendeley, by being outside the system, always had the model that it could be sold off to a major publisher at a profit. It clearly justified the continual investment, whereas a property already owned by a major publisher didn’t have that outlet. Note that Mendeley never ran at a profit and at best was said to be pulling in “tens of thousands of dollars per month”.

Uptake: Mendeley definitely benefited here from what was in many ways a superior product. It didn’t have the same quality of interface as Papers, but it had much more functionality and offered a social and online presence that Papers didn’t offer. 2Collab and Connotea never worked all that well, and both had major unsolved problems with spam. So credit Mendeley with better work to create a superior product, which resulted in higher uptake (though what percentage of the actual research community uses the tool is still an open question, I’d guess it isn’t as high as you’d think).

There’s also likely great benefit in being a neutral outsider. For a service like this to work, it has to be absolutely publisher independent. It can’t favor one publisher’s properties over any others. Just as no one wants to search only Wiley’s journals on a particular topic and instead prefers to search across all the literature, tying a bookmarking service like this to one publisher makes it less useful.

Since the early adopters of Mendeley were those deeply involved in things like science blogging and the OA movement, so there’s likely ideological issues that held back Elsevier’s original version. The independence of Mendeley also allowed them to strike deals to add links in journals for many publishers who might not have been as supportive of an effort from a competitor.

Finally, there’s likely a decent amount of Mendeley uptake that came from their potentially illegal redistribution of copyrighted material functionality. It’s legally dubious and thus there are good reasons why an established publisher would be wary of opening this can of worms, potentially endangering their own copyrights in the process, as well as opening oneself up to lawsuits.

We are our own worst enemies. We convince ourselves that we need to react to “disrupters” before our users bother asking for new and improved services. I blame Apple. Steve Jobs was brilliant at creating devices that no one thought they would ever need that turn out to be indispensible. Well, we are publishing people, not IT people–though those lines are most definitely blurring. My concern, however, is that we will be blind-sided. Technology shifts pretty quickly (compared to scholarly publishing it is quantum leaping). I worry that one day our users will wake up and demand something we haven’t bothered to work out yet. Then it will take us too long to deliver it. Or, someone else can deliver it faster and poof! They are gone.

Are up-and-coming generations of researchers who could care less about brand really going to stay within the bounds of “traditional” publishers. God that sounds so awful. Traditional. It used to be that the only news you trusted was from your big city paper or one of the three networks. Now we have blogs and Patch–absolutely no news collection training required. AND, it’s replacing “traditional” news outlets.

The tide will turn at some point. It used to be that companies could see the trends coming and have years to plan for them. That does not seem so today.

A couple of thoughts from someone whose background is consumer publisher rather than scholarly publishing:
— It is difficult for a public company to be innovative. Companies who are constantly trying to satisfy Wall Street find the accounting for acquisitions much better for earnings (costs can go on the balance sheet) than the accounting for internal start-ups (where costs need to be expensed, hurting earnings).
— Although I agree that scholarly publishing is not at immediate risk (tomorrow, next week, next year even), the tipping point can happen much faster than one can anticipate. Libraries are not looking to cut budgets today, but someone is going to figure out that their spending could (and should) be redistributed to get other assets. This kind of thinking could cascade very quickly. It is happening in consumer publishing now … why should I spend $9.99 for an e-book when I can get one of similar quality for $1.99 (or free — check out bookbub.com).

It is important for publishers to view this from the consumer’s perspective, not their own. Adding value for the consumer will eventually win. Let’s figure out how to do that and still make some money.

Brings to mind Hemingway from “The Sun Also Rises”:

‘How did you go bankrupt?’ Bill asked. ‘Two ways,’ Mike said. ‘Gradually and then suddenly.’

The disruption won’t come from the librarians, it will come from researchers, for exactly the same reasons why current 15 year-old’s think that paying for music is a mugs game. Music afterall used to be considered a mature market.

10 years ago if you asked researchers around 18-24 how they research new papers they would say Thompson research index or something similar. Five years ago, google scholar. Today, its just google.

That is an example of disruption that will eventually impact publishing and also explains why Mandeley is so valuable to Elsevier. It provides a bypass to google on the discoverability scale.

(views are my own and not of my employer)

The last disruptive incident I can recall was the cry: IN COMING!

I think as one grows old and experiences life, one concludes that disruption seems sudden and then one realizes that it is really gradual.

I am reminded by Joe’s reflections that we started talking about the “serials crisis” as far back as the early 1970s–and we are still talking about it today! Plus ça change, plus c’est la même chose.

Thank you yet again for the overview of the whole industry –on the ground– as well as the majority of the piece on the journals market. Gutenberg came along with technology and it has been changing and evolving ever since, especially in the past 20-30 years. It easy to forget that for publishing, maturity can be an asset as well as the ability to merge and or acquire. Publishers are in for the long term and are not new to experimenting with trends, regardless of their ability to turn a profit.

It may be worth noting that there is such a thing as a normal revolution. The logical form of the discussion above is replicated in every industry that undergoes major change. The trick is to realize that confusion is inevitable, indeed it is necessary because basic concepts are being restructured. Don’t let confusion confuse you.

In particular the success of startups is not a criticism of the industry. Outside innovation is normal. How could it be otherwise given that the industry is not a closed system? Innovation comes from all directions. And if someone leaves a big company to try an idea, because their colleagues did not share their enthusiasm, that is still inside. But no company can pursue all the good ideas its people have.

John D. Said “pioneering don’t pay” but he was a pioneer.

Is the danger not so much that disruption happens with the scholarly publishing sector but that the disruption is to the university sector as a whole? The publishing sector would suffer not of it’s or any disruptive element in the sector but rather as a by-product of radical shifts elsewhere in the wider sector! Or at least so it seems to me!

Otherwise, I think this seems mostly fair, if a touch more complacent that I think is wise about the lack of disruptive pressure.

Eoin

Complacent? Heaven forfend! My point was that people involved with scholarly communications are whining about disruption, but their industry has actually been relatively stable. I think your point about disruption of the overall university environment is a very good one.

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