English: A female African Bush Elephant in Mik...
English: A female African Bush Elephant in Mikumi National Park, Tanzania Français : Femelle éléphant africaine au Parc national de Mikumi, Tanzanie (Photo credit: Wikipedia)

From colleagues in the library profession, I regularly hear the assertion that the current scholarly communication system is “broken” – largely because it requires academic institutions to “buy back” their own professors’ work from commercial publishers, or because it requires taxpayers to “pay twice” for research they have already funded. For reasons I’ve enumerated before (and therefore won’t belabor here), I disagree.

I do, however, believe the system is broken — or at least fundamentally flawed — in at least one important way, and that is that its structure forces each participant to make choices in vacuum, or at best in a distortion chamber. To put it another way, each participant is a blind person with his or her hand on a different part of the elephant.

In an earlier posting, I alluded to the fact that the journal publishing marketplace is not traditionally competitive. Journals do compete for content suppliers (authors) because every journal provides authors a functionally similar service. However, journals don’t compete in the same way for buyers, because every journal provides unique content — two linguistics journals may look, on the surface, like similar products offering competing value propositions to the marketplace, but in fact each offers a completely unique value proposition, since the articles in each journal are unique, only broadly related to each other, and unavailable from any other source.

Choosing between two linguistics journals is not like choosing between a Ford and Chevrolet, both of which do almost exactly the same thing and compete for your business around the margins of the driving experience (smoother drive, better gas mileage, etc.). In this scenario, you only want to buy one car and will try to choose the best one you can get at the price you can afford. Two linguistics journals, on the other hand, compete for your subscription money in the same way that groceries and clothing do: what you really want to do is buy both, but if you don’t have enough money for both you have to choose between them. You can’t spend the same dollar twice.

But the more I’ve thought about this issue, the more I’ve become convinced that the weirdness of the scholarly communication marketplace goes far deeper than the question of competition for buyers. In fact, I think the frustrations that many constituents experience with the current structure arise from the fact that each participant in the system gets fundamentally incomplete signals from the marketplace in response to the inputs it contributes.

Here I’ll focus mainly on the journal marketplace, which accounts for the great majority of dollars spent by research libraries. Books pose a somewhat different set of issues.

To invoke another metaphor and provide some comparative context, consider the marketplace for office chairs. If I choose not to buy a chair from Herman Miller, that doesn’t mean I don’t get to have a chair; it just means I have to buy a different brand of chair. Herman Miller can only command a very high price for its chairs if, a) a great many of its potential customers believe its chairs are of very high quality, and b) those customers have sufficient money to pay for them. Herman Miller’s ability to command those high prices will be undermined to the degree that other chair makers enter the marketplace and offer high-quality chairs as well. If, however, Herman Miller were the only chair maker in the world, its position would be much different, and the market’s responses to its pricing signals would be distorted.

This is, arguably, the position in which journal publishers find themselves. So let’s start with their situation.

Publishers. Journal publishers sell two services in the scholarly-communication marketplace — one is a suite of services they sell to authors (who trade distribution rights and often their copyrights for the services of review, editing, certification, dissemination, and some degree of archiving) and one set of services to libraries and individual subscribers (who trade money for access to articles). Author services are provided in a more-or-less normally competitive marketplace, because authors have a meaningful choice of venues for their work. Services to libraries, however, are not. The moderating pressures that competition exerts on price increases in more conventionally competitive environments do not apply in the journals marketplace. If a publisher decides to double what it charges a customer for access, the customer does not have the option of going to a competitor for a functionally similar product. This fact severely distorts the signals a publisher receives back from the marketplace in response to any change in price, and thus makes it very difficult for the publisher to know whether it is charging the “right” price.

Authors. Authors also receive partial and distorted signals from the marketplace in response to their inputs. They submit manuscripts to publishers, and get feedback based purely on quality and relevance: if their submission is of high enough quality and good enough fit for the journal the article will be accepted, in which case the author will receive (in lieu of payment from the publisher) the benefits of editing, certification, and dissemination. The author’s choice of journal has varying impacts on the marketplace depending on whether she submits to a $500 journal or a $20,000 journal—but those impacts are absorbed by other participants in the system, and are not felt directly by the author. The only consequence directly experienced by the author is that of prestige and exposure (or lack thereof). An author who contributes to a journal seen by others as exploitative or “immoral” may get some negative feedback from colleagues, but this is quite unlikely—and that feedback constitutes a relatively weak signal compared to, say, seeing one’s name on the contents page of the top journal in one’s field. Similarly, when an author contributes to a more “virtuous” journal, she receives no direct benefit for doing so.

Libraries. Although they don’t usually characterize it this way, research libraries are selling a service in the scholarly-communication system as well — or, more accurately, a suite of services. In return for institutional funding (and, often, explicitly dedicated student fees), research libraries broker access to information resources and provide a variety of support services to students and scholars. They also provide archival hosting for print backfiles and, increasingly, digital archiving of scholarly products as well. In an academic environment, journal purchasing decisions are typically made by librarians — not by the readers who will benefit directly from those decisions. Since library budgets are limited, librarians have to cancel or forego some purchases; but since readers don’t experience the impacts of price, they put pressure on the library never to cancel or to forego purchase. If the library cancels a subscription, it experiences budgetary relief — but does not feel (thought it may hear about) the pain of its constituents who have suddenly been denied access to content that may be important to their work. Librarians do typically canvass their constituents in order to gather information about the impacts of their decisions, but information gathered in this way will always be partial and only partly reliable.

Readers. On an academic campus, readers experience little or nothing of price. It is no harder for them to access a library-provided $20,000 journal than a $1,000 journal. What they do experience are relevance (“Does the library give me access to journals in my field?”) and quality (“Does the library give me access to really good journals in my field?”). Since price impacts are outside the readers’ experience, they will tend to exert significant and constant pressure on libraries to acquire relevant and high-quality journals, no matter what they cost. Obviously, pricing levels or trends that might modify the reading behavior if readers paid the subscription bills themselves will have little if any impact on reading behavior when the bills are being paid by someone else. Similarly, readers (as faculty members) don’t care about cancellations except those that fall within their disciplinary purview. A mathematician, faced with the possibility of losing access to a $5,000 journal subscription due to insufficient library funds, will happily let the library cancel one or more linguistics journals in order to preserve the math title — and vice versa.

In summary, the biggest problem I see with the existing scholarly communication marketplace is not the fact that faculty provide “free” content to journal publishers and then ask their libraries to pay for the formally-published versions of those same articles. This is a natural consequence of the value-added services that the academy expects publishers to provide. The biggest problem is the fact that each participant in the system receives distorted and radically incomplete market responses to its inputs. There is virtually no competitive pressure on publishers to control journal prices; authors’ submission decisions have significant impacts on other players that the authors themselves never feel; librarians make selection decisions but do not experience directly any of the meaningful consequences of those decisions either; readers make requests of their libraries without regard to price, because they do not pay the bills.

Solutions? It’s difficult to see a solution to this problem that would not take scholarly publishing out of the commercial marketplace altogether. Some would hail such a development. I will share thoughts on this idea in my next posting.

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Rick Anderson

Rick Anderson

Rick Anderson is University Librarian at Brigham Young University. He has worked previously as a bibliographer for YBP, Inc., as Head Acquisitions Librarian for the University of North Carolina, Greensboro, as Director of Resource Acquisition at the University of Nevada, Reno, and as Associate Dean for Collections & Scholarly Communication at the University of Utah.


38 Thoughts on "Signal Distortion — Why the Scholarly Communication Economy Is So Weird"

I see no fundamental flaws in this system, merely the fact that economic activity is often done by organizations not individuals. A simple case is where parents buy for their children and toys compete with shoes. The journal case is more complex.

The market for childrens’ toys and shoes is actually a poor analogy for the scholcomm marketplace, because in the former parents derive direct utility from their choices (“Your little Davey is so cute in those shoes!”); parents have meaningfully competitive options between brands and styles of shoe; shoe manufacturers, for that reason, get meaningful feedback in response to their pricing behavior; and children don’t participate directly in the manufacture of the shoes and toys that their parents then purchase. In other words, the signal distortions I describe in the scholcomm marketplace don’t arise simply because one party is buying on behalf of another, or even because organizations are buying on behalf of members. They arise because of the much more unusual dynamics that I describe in the posting.

Dare I say that you are distorting my example? I did not offer the family as an analog. My point is simply that economic decision making is often done by organizations not people. You seem to be pointing out a case of this and claiming there is a market distortion thereby. I disagree.

I understand your point, but it’s not particularly relevant to my posting, which describes some of the very specific dynamics in a particular system — one which, in this case, is populated by both individual and organizational decisionmakers.

I think it is very relevant because you are making the strong scientific claim that these specific dynamics are a market distortion. My concern is that federal regulators often use the false claim of market failure to justify new regulations. I see no distortion in your description merely distributed decision making. Universities are not people.

This is a confusion that has concerned me for a long time. People judge organizations as though they were people which they are not. The particular case I am interested in is major legislation which typically involves ten thousand people as a minimum.

Look again at what I wrote, David. In every case that I invoked the concept of distortion, I was referring to the signals that participants get back in response to their actions in the marketplace–not to the marketplace itself. This is not a scientific claim, still less a “strong” scientific claim. Nor do my observations involve confusing organizations with people.

Sorry but I see neither distortion nor weirdness, just organizations making decisions. The participants you refer to are not themselves in the marketplace but their organization is. As members of the organization their signals are fine, perfectly normal in fact.

I do not understand what you mean when you say it is not a scientific claim. You are claiming that there is signal distortion are you not? How is this not a scientific claim?

The participants you refer to are not themselves in the marketplace but their organization is.

No. The participants to whom I refer (authors, publishers, buyers, and readers of scholarly products) are a mixture of individuals and organizations. Taken together, not only are they in the marketplace — they are the marketplace.

I do not understand what you mean when you say it is not a scientific claim. You are claiming that there is signal distortion are you not? How is this not a scientific claim?

My posting is, pretty clearly I think, a subjective observation about the perceptions, communication patterns, and behaviors of participants in the scholcomm marketplace—not an objective conclusion arrived at by means of testing an hypothesis. That’s how it is not a scientific claim.

Isn’t this the case for any market where products are unique to a given supplier? It’s certainly the case for any content market, music, books, etc., where you can’t replace a Rolling Stones album with a Vampire Weekend album.

I’d also suggest a few things: 1) a customer you haven’t mentioned here is the advertiser, who provides a significant amount of revenue for some journals (in some cases outpacing the subscriber), and 2) another signal distortion in this marketplace is the opacity of pricing–collection and consortia deals bring great value for libraries, but at the same time, the prices seem to vary quite a bit and are often done under confidentiality agreements. So, much like the airline or hotel industry, one customer may be paying significantly more or less than another.

Isn’t this the case for any market where products are unique to a given supplier? It’s certainly the case for any content market, music, books, etc., where you can’t replace a Rolling Stones album with a Vampire Weekend album.

Except that the buyer of either album gets the direct benefit of the choice he or she makes, whereas the buyer of the scholarly journal (when the buyer is a library) does not. Also, pop music albums are, for most buyers, discretionary purchases that have nothing to do with their ability to make a living, so the pressures that contribute to their choices (or the choices others make on their behalf) are very different.

Your points about advertisers and opacity of pricing are well taken.

It’s not a perfect analogy, though one could look at a DJ who makes a living playing recorded music in nightclubs as an example of making a living through such a purchase, or a theater owner selecting which play to put on.

What does the direct nature of benefiting from the purchase matter in the overall scheme of things? Anyone at any company procuring raw materials for other employees to exploit would seem to be in the same position as a librarian.

What does the direct nature of benefiting from the purchase matter in the overall scheme of things? Anyone at any company procuring raw materials for other employees to exploit would seem to be in the same position as a librarian.

No, in part because because procurement officers are usually selecting between the offerings of providers who operate in a meaningfully competitive marketplace. That said, it’s true that one could pick out any one of the individual distortions I’ve identified and find another marketplace that shows something similar. But the weird dynamic I’m describing in the scholcomm marketplace isn’t reducible to any one of the distortions I point out–it’s a result of all of them combined, and of the way they interact with each other.

For the DJ analogy to work, our DJ needs to work an all-requests format, but his records are purchased by a third party with a very limited budget. And the DJ’s got Napster (which he’s OK with, because he thinks record companies are evil).

The researcher doesn’t need just any article – they need a very specific article. And here’s where it gets really weird: if the researcher really needs that article, they’re going to get it one way or another. If their library doesn’t have access, they’ll try another library, or contact the author, or ask a colleague at another institution.

The fact that reality is more complex than a 200 year old abstraction is not a distortion. The rational allocation of scarce resources still goes on.

As long as scholars are still writing and reading, the system is not broken; however, it can be improved. Deciding how it should be improved is based largely on values and what elements of the system should be privileged over others. Using analogies to the car or office furniture markets presupposes that you wish the publishing market to behave similarly. Personally, I don’t think these markets, which deal mostly in the exchange of material objects, have much to do with academic publishing. Viewing academic publishing as a prestige market, where status is built and eventually exchanged for real-world benefits (jobs, grants, facilities) is better able to explain the publishing market.

As long as scholars are still writing and reading, the system is not broken

That’s like saying that as long as kids are going to school, the education system isn’t broken. In fact, a system can be broken for a very long time before it completely disappears. (That said, I’m not particularly invested in the idea that scholcomm is “broken” in any fundamental sense. I’m more interested in trying to understand and describe the structural distortions I describe.)

Using analogies to the car or office furniture markets presupposes that you wish the publishing market to behave similarly.

I used those examples only to illiustrate what real competition looks like, not to suggest that the scholcomm marketplace ought to behave in exactly the same way. I do agree with you that the academic marketplace is a prestige market for authors — however, authors are not the only participants. It’s not a prestige market for the participants who pay the bills; nor is it exactly a prestige market for those who sell the products to the people who pay the bills.

Isn’t there some level of prestige involved for the institution in providing potential employees and students with a well-stocked library? A shabby facility without access to major journals would likely drive away top researchers and students, so while not the primary driving force, prestige does factor in there somewhere.

There is some level of prestige for the institution, and to some degree for the library, but the library isn’t operating in a prestige marketplace in the way that authors are. For scholarly authors, prestige is pretty much all they get in return for their inputs.

Well put. I would add that the so-called ‘arguments’ cited at the beginning of the article are so incredibly false that, when I first heard them, I could not believe they came from academia. Every scientist knows that his / her institution provides a tiny fraction of the content purchased by his / her library. Moreover, while Federal R&D grants have included perhaps two percentage points of ‘overhead’ marked as support for libraries, the money is absorbed rather than earmarked for collection development.

Folks who would not dare float such patently false arguments in their chosen disciplines seem to believe titles such as ‘professor’ or ‘provost’ give such rhetoric credibility with no need for supporting data.

Albert, you describe the “so-called ‘arguments’ cited at the beginning of the article” as being “incredibly false” and “patently false.” Can you be clearer about which arguments you’re responding to? You obviously feel very strongly about this, but I’m not sure what you’re taking exception to. (Also, who are the “president” or “provost” you refer to at the end of your comment?)

The math-deficient “buy-back” pitch first appeared to me in a book by prof. Robin Peek published by MIT Press that I reviewed for PRQ (4,4:115-116. 1998/99) and echoed ever since from the top (f.e. Robert Darnton of Harvard ).

Somebody once told me that journal publishing is the same size as the novelty balloon industry – about $3B per year. So why all the fuss?

The “buyers” of the certification and credentialing services provided by scholarly publishers are not authors. The real buyers are governments and research funders that use the publishing process to help decide how to invest hundreds of billions of dollars per year. In this context “readers”, and the trivial $3B spent to give them access to the literature, are almost irrelevant. Readers are just a means to an end.

If Scholarly Process 1.0 (submit, blind peer review, editorial filter, publication, selective indexing, citation, etc) can be improved, the ROI in terms of superior allocation of research funding would be massive – so it’s a goal worth exploring and pursuing (e.g. ORCID). On the other hand, if Scholarly Process 2.0 (post, star rating, continuously edit, no editorial gating, index everything, twitter counting) is not superior and replaces the traditional model because it changed economic dynamics, then the loss to society would be dramatic.

Perhaps one solution, at least in an academic setting, is to allocate dollars back to each department and let them choose which journals they would like. Then leave it to the library to act more as a “purchasing agent” who negotiates (where possible) the best deal from the publisher/agent. This lets the ultimate consumer prioritize the material they would like/need and put some of that feedback into the loop. University leadership can decide to make changes to the allocation of the total budget between departments depending on how important they see the department to the overall health of the institution.

Something like this system does exist at some colleges, though (I believe) mostly at smaller liberal-arts schools rather than large research universities. The pros are as you suggest; the cons have to do with selections being made by faculty members with very narrow and changing interests (though that “problem” has its upsides as well). You’re absolutely right that where readers do some of the selecting, and therefore have to make hard choices in a context of limited resources, that particular distortion is eased.

Rick, this suggests that perhaps the academy ought to manage its scholarly publishing. That could bring home the consequences of decisions: to librarians, authors, faculty as editors and reviewers, and perhaps readers.

I would say it is a complex market, not a distorted or broken one. As David points out above, most content is not interchangeable so that is not a function of a distorted or broken market — it is simply a function of a content market.

Second, because it is a complex market, institutions have assigned smart people — librarians — to manage the complexity and to make difficult decisions on behalf of the students and faculty. This is necessary in any large, complex, business-to-business transaction. Agents are necessary to act on behalf of others in the institution (and conversely on the other side, sale-side agents represent the interests of content providers). This is not a distortion – it is the nature of B2B transactions.

Third, as Richard notes above, we are not talking about a lot of money. The “serials crisis” is a rounding error for most institutions. What does the University of Utah spend, a percentage of its operating budget on serials? Half of a percent? What does it spend on groundskeeping? And yet we do not speak of a “fertilizer crisis.”

I think it’s interesting that so many commenters are picking out individual examples of signal distortion from my posting and saying “This doesn’t make the market broken.” Again: I’m not arguing that any individual distortion accounts for the fundamental weirdness of the scholcomm market. I’m arguing that the confluence of all of these distortions—each of which means that no individual or organizational participant experiences the direct consequences of its actions—results in a more fundamental and systemic weirdness. Many markets are complex; relatively few, I believe, evince the kind of systemic distortions I’ve described.

As for the amount of money involved: the fact that the scholcomm market is relatively small does say something about how much this issue matters in the world-historical scheme of things, but it doesn’t say anything about how much it matters to those of us who are making a living in it. Anyone who feels this whole topic isn’t important enough to merit comment and analysis should feel free to go think about more important things.

My point wasn’t that the topic is not important – it is. My point is that the serials crisis is as much an artifact of the institutional budgeting process as rising prices by publishers. The amounts we are talking about are not significant in terms of the overall budget of a research university. That the university wishes to hold down spending on libraries because of budgetary pressures elsewhere — groundskeeping, faculty salaries, health care — say more about how fast these other costs are rising than about the rising costs of serials. The University of Utah could double the amount it spend on serials and anyone looking at a top-line budget for the university would not even be able to discern the change. In other words, I think looking at this as a Library – Publisher market is the wrong lens. Looking at this as the University – Publisher or University – Scholarly Communication market provides a better perspective.

If universities were to increase library funding at a level that keeps pace with STM publishers’ annual price increases (and let’s all pause a moment and contemplate a utopian world in which any academic unit gets 6-10% budget increases each year) that would indeed ease one effect of the one of the fundamental distortions I discussed in my posting. It would not, however, address any of the distortions themselves. I’m not actually complaining about high prices in this posting; instead, I’m pointing out some of the market dynamics that contribute to (among other things) distortion in the signals publishers get from the market in response to their pricing strategies.

Also, Michael, I should clarify that on the “importance” issue, I was also partially responding to Richard Wynne’s “Why all the fuss?” comment above. Your observation about “not significant” dollar amounts seemed to dovetail with his, but I see that you were actually saying something different.

While I agree with you that there are non-parallel signals in the scholarly communication market, I just wouldn’t go as far as calling them distortions – but maybe we are just arguing semantics. I see the market as healthy albeit complex. The percentage of an institution’s budget dedicated to scholarly resources is an important data point as it is can be an indicator of dysfunction. If one were to look at the operating budget of GM before their recent bankruptcy, one might have concluded they were a healthcare company that for some reason was selling cars to fund their health care activities — that is how dysfunctional the market for healthcare is in the US.

My point in looking at this through the larger institutional (as opposed to the library lens) is this: Institutions use the budgeting process to prioritize their spending where it will have the biggest impact, in the case of a university that means attracting talented faculty and promising students and enabling them to learn, teach, and conduct research. If the university’s library budget becomes detrimental to these efforts at some point, the university (if it is a healthy market) will allocate more of its budget to the library. If it is not able to, as in the case with GM and healthcare, then there is a problem but we are a long way from that. Of course if the university is able to keep library budgets flat without impacting their recruitment and retention of students, faculty, and staff that also sends a signal publishers might wish to pay attention to.

Let universities keep library funding in pace with academic R&D — as they did in the 1960s — and I suspect prices will simply keep pace with increases in numbers of pages published. As it is, every subscription cancelled shifts costs to remaining subscribers.

Another aspect of the system you don’t cover here is when universities themselves, through their presses, decide to engage in journal publishing and decide what journals they wish to publish. Students have no input here at all, and librarians and faculty members do only to the very limited extent that they may have some representatives on the press’s editorial board. Prestige certainly remains a very relevant factor here, both in starting a journal and in maintaining its reputation over time. There is likely no interaction at all with the other part of the journal system you describe, inasmuch as generally presses will give a free subscription to their own universities, which won’t have to face a choice between subscribing to their own press’s journals and those from other publishers.

Talking of signals, how do you feel about the view of the UK minister for universities and science that “Our preference is for the so-called “gold” open access route. This recognises the costs of publication (including peer-review and editing), via an explicit and upfront article processing fee.”?


When it comes to OA solutions generally, I’m agnostic. I see pros and cons to both the Gold and the Green approaches, and indeed to the standard toll-access model as well. I guess my reaction to the Minister’s statement is “Yes, you have indeed identified some positive aspects of the Gold model. But making a good decision means more than just deciding that you like the good aspects of a model. It means taking into account the negative aspects as well, balancing the good and the bad against each other, and then comparing the final assessment of that model with a similar assessment of other available models.”

Of course, it may be that that’s exactly what they did.

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