If God were an economist instead of a moralist, the first commandment he handed to Moses would most likely have been the Law of Unintended Consequences. It is a principle of extraordinary application; like God, it touches all corners of the universe. Among its virtues is its ability to foster humility and to ensnare idealists in its web.
This law may soon be manifested in all its majesty at the Office of Science and Technology Policy (OSTP), whose recent attempt to articulate a program for federally funded research aims to make the products of scientific research more widely available. The challenge for the OSTP is to reconcile its ambitions with God’s plan.
Before exploring some of the consequences of the OSTP’s new policy, I should note that there is no unanimity on this topic here at the Kitchen. My fellow chef David Crotty has argued with his usual eloquence that the new policy is even-handed and represents a serious effort to bring all parties together. Our colleague David Wojick notes that the plan, at least at this time, is terribly confusing and that compliance will be difficult. In the language of the proclamation I see something different, a note of weariness and exasperation as the administration is dragged into what is essentially a small affair when it has bigger problems to address. The policy makes no new funding available, proposes a set of guidelines to follow except when you don’t, presses for coordinated action without requiring it, and stipulates a period for embargo except when it does not apply. This is the kind of policy that strengthens Americans’ support for their government. For my part, I hear an echo of Jim, the fugitive slave in “Huckleberry Finn,” who has a little business on the side as a fortune-teller. Among his predictions: You’re gonna get sick, and you’re gonna get well. Yes, and the new OSTP program will make scientific research more widely available except when it does not. But the OSTP got it off their desk, and that was the objective.
To understand what the OSTP got wrong, we need a little primer on how publishing works. Now, before the vitriolic comments come flying, I am not saying how publishing should work or how it could work, but how it does work. The work of the publisher is to invest capital into intellectual property and then to exploit the hell out of it. There is in fact no such thing as a “journals publisher” or a “book publisher;” all investment takes place in an ur-property, the underlying IP that is manifested as a book, a journal, or something else. Publishing consists of investors who make item-by-item decisions on what properties to support, which ones to ignore. The people who guide this investment are called editors.
Once that investment has been made — in an article, a book, a journal, a database, all in their primordial form — it’s the job of someone else, who usually and confusingly bears the title of Publisher, to figure out how to make money from that investment. The publisher works with sales and marketing people, with the staff involved with licensing subsidiary rights (e.g., translations), and often with a business development group whose job it is to open up entirely new channels and markets for the company to enter. Crudely expressed, the job of all these people is to deliver a return on that initial investment.
Some observers of the journals world will mistakenly jump up at this time and say, Gotcha! There is no investment because publishers don’t pay authors or the reviewers. In fact the investment was made long ago at the time the publisher decided to create or acquire the journal. It can take five years or more to break even on a new journal. Journals publishing requires patient capital. It’s expensive to get into this business, even if you work only in digital formats, but potentially lucrative many years down the road. This is one of the two reasons Elsevier makes so much money: their size (the matter of scale; let’s call this the Coase Commandment), and the fact that they have been doing it for so long (the First Mover Advantage, something that Moses would have understood very well).
So now we that have this bit of IP, what do we do with it? The primary way research material is monetized is through the sale of library subscriptions or aggregations, though for some publications, libraries play a smaller role. It’s the library world that the OSTP is looking at when it suggests that research articles be made open access after an embargo period. The thinking is that the library revenue pays for the publication and libraries pay for things when they are published; so why should it matter to a publisher if something is made OA six or 12 months after publication since the libraries have already underwritten it?
Meanwhile, publishers are marketing the same IP in a multitude of packages. They make deals with companies like AcademicPub, Udini, DeepDyve, and SIPX; they seek translation rights income; they attempt to sell advertising; they sell coursepacks; they license databases for data-mining; and they aggregate articles into new journals organized by semantic category. The person who comes up with a new way to exploit IP in a publishing house is highly regarded. That person may rise to the level of Publisher or even CEO.
I was first introduced to this model metaphorically when I saw a billboard for a pork products company. There was a picture of a pink pig and the tag line: We sell everything but the squeal. Exactly.
Since research publishing is a media business, we should not be surprised to see this same principle at work in other media. Hollywood, which makes the biggest media investments of all, is the master of this game. Movies are made for first-run theaters, for international release, for cable TV. They are packaged and sold as DVDs, licensed to Netflix and HBO, and appear on network TV, where they are supported by consumer advertising. They spawn sequels and special collectors’ editions. Sometimes movies engender a “novelization” and movies for kids are famous for the merchandise they spawn. On some level, the folks at John Wiley and Springer are playing the same game as George Lucas.
So if you have a business with 10 income streams and one of them gets cut off, what do you do? You try to squeeze more revenue out of the other nine. If the 10 streams drop to five, you squeeze harder. It is the multiplicity of income streams that keeps prices down for any one manifestation of the underlying property. When in retreat, we husband our resources more carefully. We saw this play out just a few years ago during the world financial collapse. At that time a number of STM publishers that had previously made their publications available at no cost in developing economies changed their policies and began to charge for journals in countries such as India. Part of the reason for this was that they were attempting to offset the declines they were experiencing in troubled US and Western European markets.
What the OSTP regulations do (when they apply) is undermine some of those additional revenue streams, putting a greater burden on those that remain. The OSTP is not alone in this; the retrograde policy of OA after an embargo period is common now, and it is slowly and inexorably increasing the cost of materials to libraries. Why do OA activists hate libraries so much? I just don’t get it. (I wrote about the same problem as applied to books a couple years ago.) The OSTP will help to accelerate the migration from print to digital, resulting in sharp drops in advertising revenue; the policy cuts away at those publishers that sell individual articles; it essentially eliminates the sale of publishers’ backfiles; and it will shut down revenue from coursepacks. I wonder what it will do to the very large income streams from corporate accounts. Do corporate customers have the same need as an academic researcher to look at material within six or 12 months of publication? It will be interesting as well to learn of the OSTP’s policy on long-term preservation, now that no one has an economic incentive to keep materials in a safe and discoverable manner beyond the first year. Should libraries start ordering print editions once again to ensure preservation? Should they began a capital campaign to build new storage facilities?
The cancellation of subscriptions takes place at the margin — another Commandment to keep in mind. The most-used works do not get cancelled, but the more specialized publications do. As a library budget tightens (from cuts mandated by the administration, from price increases from suppliers, from the cost of completely new materials being offered for sale), something has to give, and what gives is a) the least important, and b) what can be found elsewhere. After the embargo period, more and more material can be found elsewhere.
None of this would be a problem if we continued to fund libraries richly, but those days are over. What is bizarre is that we keep coming up with new pressures on library budgets. This plays right into the hands of the largest publishers, as they are the best equipped to keep their programs with libraries in place — that is, the bigger entities continue to get bigger still, a principle known as the Law of Increasing Returns.
The implications of the OSTP’s outlook (assuming it applies to any particular case) are not apocalyptic. The current practices of peer review and dissemination will continue, though at a growing cost. Prices to libraries will nudge upward, but no one will attribute this to the OSTP. Smaller publishers will increasingly be marginalized, and the scientific societies that sponsor some of these publications will be challenged. To say that the OSTP is a cause of higher prices and more limited publications is not to say that it is a dramatic cause. It will be a cause slow to reveal itself.
It didn’t have to be this way. The OSTP could have done the sensible thing and simply insist that every government grant for research require that the author make a report on that research freely available, preferably in an open repository or network of repositories. There are problems with this strategy, as David Wojick has pointed out, but if it were properly administered, the taxpayers would have gotten exactly what they paid for, and with no embargo. This would be very disruptive to established publishers, but government research money is not designed for publishers to make a fat living.
What gets in the way of this proposal is the fact that, resent it though they do, OA advocates are aware that publishers add considerable value through the management of the system of editorial review. This is why the OSTP opted for what is essentially a Green policy over a Gold one, because it implicates the publishers without compensating them. It is a needlessly complicated policy with obvious stresses. Better that it were called Murphy’s Law and leave it to Moses to deal with.