“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.”
— Ernest Hemingway, “The Sun Also Rises”
Over the past few years, the signals have become unmistakable — the Internet rewards scale. The economics of online business are skewed heavily toward commoditized and standardized approaches to shopping, social media, and search, and set heavily against redundant and non-scaling efforts that require craft and care.
For smaller publishers, especially domain-specific non-profits, this is not good news, because scale appears destined to affect scholarly publishing in fundamental ways, as well.
The emergence of mega-journals is one sign that the Internet’s natural models reward scale. While small journals languish, mega-journals thrive. And traditional approaches to scale seem to have a functional counterpart — no longer must a publisher negotiate deals with five dozen different societies to achieve scale. Now, by offering decent branding, a citable output, a market-appropriate price, and a high acceptance rate, a relatively new entrant can publish as many papers in a year in one mega-journal as some mid-sized publishing companies do across dozens of titles.
There are other ways to achieve scale online, of course. Some publishers are making the process of establishing and launching new journals very efficient. And while this is possible for commercial entities with no natural boundaries emanating from mission statements or society constituencies, organizations possessing boundaries are at a clear disadvantage.
Big data is another sign that scale is going to be the theme driving the future of publishing. Data acquisition, curation, presentation, and preservation work best if there are large sets to wrangle — the expense and effort involved with managing the first set of data well truly pays off when you have the millionth set. A few dozen sets of data will not reward the effort. Scale is required, not optional, for success in data businesses.
The structural challenge facing non-profit publishers is significant. This challenge emanates from their missions, which generally circumscribe their efforts to a limited audience. This limits their ability to scale on terms the Internet’s inherent architecture favors. Already, the feeling of being sidelined is making alignment with major publishers more appealing for many societies who were succeeding well as publishers in the pre-Internet age. It may seem to have taken a long time for this to occur, but it’s occurring more rapidly all of a sudden, from what I can see. The economic downturn has had a lot to do with it — fewer ad dollars, lower institutional price increases if any at all, and so forth. Smaller players are seeking to add their wagon to a set of already circled wagons. Leaders are either explicitly or intuitively sensing that the time may have come.
Small publishers have tended to provide the greatest value on the market — lower prices for better content, generally. This shift will have major effects on pricing at the least, and bigger bundles will only leave the laggards more exposed. The direction seems clearly established by the fundamental pressure to scale.
Unless there is a major (and I mean, major) change in the economics and trends in scholarly and scientific publishing, we are not going to unbake this cake. Scale will win, and it has been winning all along anyhow. Those unable to scale will realize they can’t beat ’em, so they’ll join ’em. The big will get bigger. The small will be swallowed up or vanish altogether. No current trend or innovation will change this.
Will this be better or worse for scientists? That’s harder to judge. More commoditized approaches to research outputs will be part of the future. That may make it easier to publish, allow for significant innovation around data aggregation and presentation, and improve discoverability. Or it may not. It may instead simply reveal deeper structural problems in the financing of research publication, problems scale exacerbates.
In any event, the future direction seems to have been set years ago. Now, without a robust and diversified niche publishing economy that allows us to pretend it was otherwise, stark reality seems closer than ever — scale will win. It may be that simple.
25 Thoughts on "Scale Rewards, Scale Punishes — Is the Future of Scholarly Publishing Already Determined?"
On the other hand, internet also allows niches to exists where previously physical barriers prevented it, and allows primary producer direct contact with end user. This facilitates thousands of new, small, independent “cottage industries”, such as ad-funded writing (blogging) on highly specific topics, selling handmade crafts, indie musicians (paid to perform, not for copies), crowdfunded films, and so forth. So perhaps it is the mid-scale that is threatened, while the huge platforms actually create new opportunities for the smallest businesses based on offering human craft and care?
For example, imagine individuals or small groups of people with superior editorial skills and topic knowledge setting up curated, edited, subscription-based collections from freely available mega-journal articles. A small business built on non-scalable human craft and care in selecting and editing scientific articles in highly specialized niche could be sustainable.
These are all the things we like to tell ourselves, but I think they are increasingly invalidated as the small rewards for niche offerings have become clear. Self-publishing has become Amazon’s CreateSpace and consolidated in a very few other hands. Blogging has become WordPress and little else. A few major outlets sell crafts online. Most podcasts started by enthusiasts are failing or have failed. Indie musicians are fading into obscurity without major tour or label support.
I used to believe like you — it was the middle that was threatened. I no longer believe that. I think only the strong will survive, and on the Internet, that means scale.
I’ve also seen this in our industry, as publishers reliant on niche revenues and craft practices struggle and those aligned with larger, scalable entities are more comfortable and have more options. This is one of the trickiest periods ever for publishers. In some ways, OA is simply a response to scale, and it is leading to consolidation in new ways. But one failing of “niche” is that there are few options — fewer skills, fewer initiatives to cultivate, fewer things to scale. So, there is kind of a double curse — no facility to scale, and nothing much to scale in the first place.
And that’s your buzzkill for today!
The thing that is most clear is that you can’t win against scale with a small or mid sized organization using an old production/service model. Whether or not small to mid sized ventures that leverage the opportunities of the internet and piggyback on large scale infrastructure may be an open question, but there seem to be possibilities.
Imagining a completely consolidated and commoditized scholarly publishing environment still leaves us with the curious situation where producers and consumers of these works are one and the same entity. What rational economic person creates a work, gives it away or even pays someone else to take it and then, in the end, buys that same work back, albeit somewhat more polished?
It used to be that this convenience could be financed by the actual payer in this scheme, the student. This is part of the reason why tuition has risen faster and farther than any other segment of the economy, including healthcare according to CPI figures. Higher education is in real danger of pricing itself out of business and legislatures are conditioning further public support on reducing the costs to students and the level of debt that implies.
So, how long will it take for higher education to realize how much money could be saved and help contain or lower tuition by bringing the scholarly publishing enterprise in-house on the scale of an organization such as EduCAUSE rather than increasing the number of university presses. Not quite nationalization but the effect would be similar.
“What rational economic person creates a work, gives it away or even pays someone else to take it and then, in the end, buys that same work back”?
Aside from the fact that they are not buying the same work back, here is the answer:
I re-read both the book review and the interview and agree that externally funded research in the physical sciences at R1 institutions constitute a more complex picture. However, the more general case includes those whose research and writing is not externally incentivized such as the social sciences and the humanities. The institutions of higher education who most commonly employ these writers to provide some mix of teaching, research and service also consume the journal articles, scholarly books and textbooks with students footing the bill either directly as in the case of textbooks or indirectly via the institution’s library acquisitions. This is a “broken” market where demand is highly inelastic. The institution makes the decision to acquire and the student pays. There are few incentives to encourage efficiency.
As for the service aspect of scholarly publishing, David Crotty is correct. It is necessary. However, it does not follow that these services are currently being offered in the most efficient ways possible.
Thus, the conclusion that as institutions of higher education respond to pressure to lower tuition and textbook costs to students, they may well see this curiously expensive circumnavigation of the market as an opportunity to find a straighter, more efficient and less costly path.
I think the question about the economic system comes from a common misunderstanding of the journal publishing industry. We are a service industry, not a product selling industry (see http://scholarlykitchen.sspnet.org/2012/05/14/ask-the-chefs-are-we-a-service-industry-or-a-product-industry/ ). If you think in terms of publishers providing a service to authors, then these irrationalities go away. The publisher provides the service. This must be paid for in some way. One rising system is through direct payment (Gold OA), but the traditional method is to pay for the service by granting the publisher rights to re-sell your content to others.
And within this comment is the duality — we are a service industry from the perspective of authors, and a product industry from the perspective of readers. David’s last sentence captures this perfectly in my estimation.
the traditional method is to pay for the service by granting the publisher rights to re-sell your content to others.
This points to the fact that traditional journal publishing is both a service industry and a product-selling one. Publishers “sell” their services to authors in that they accept submissions of raw material and provide the services of filtering, refinement, editing, credentialing/branding, distribution, etc. to the author in return. But selling the resulting product in the marketplace is what keeps the traditional publisher in business. Both the service (to authors) and the selling (to readers) are essential parts of the traditional publishing model. Emerging models are complicating this traditional model, of course.
Excellent post! I haven’t read it that clearly before and I fully agree. If we think about the consequences, there will be many questions arising:
What about reputation, today maybe the biggest driver for authors to publish their results. So far scientists had a chance to count their publications in science or nature and win a grant with it. In the brave new world of mega journals, altmetrics will deliver some measurable reputation. But those numbers will be difficult to use and are only valid with regard to its particular field of science. As an author, I would prefer to publish in a reputed old-school journal as long as I can.
And what about Peer Review? This has not been scalable so far. Today most reviewers are carefully selected and invited by editors. How may this work in the mega-mega-journal world?
It is unfortunate that you devote just one paragraph to your economic model, then go on to draw strong conclusions from it. In particular you use scale in the singular, which I do not understand. For example, basic economics rewards certain kinds of scaling up, but not others, which no doubt applies to the Internet as well. Which are which is far from clear at this point.
Nor do I see a journal that collects from and sells to a specific and large professional community as a niche. But again I am not sure what you mean by niche. Sorry to be picky but as a modeler I look for executable claims.
Niche = devoted to a small audience of limited interests, and perhaps bound to serve only that audience.
Scale = the ability to use communication technologies to serve all audiences.
Those are my approximate meanings. The model should be pretty easy to make. Think species. Which dominate the planet? Those that remain constrained to a single geographic location and indigenous diet? Or omnivores that can live in any climate? Humans dominate the planet because we scale better. No other species can go from the ocean and out into interplanetary space and survive. The same will happen to participants in an economy driven by the Internet, or at least that’s what I’m arguing.
It is clearly the case that the Internet has facilitated new large scale enterprises, as most new technologies do. But none of your arguments follow from this. So I still do not know what the anthropomorphic “the Internet favors scale” means as a purported economic law. Perhaps if you put it in technical economic language we could more easily consider it’s validity. The mere fact that a communication technology serves many markets does not imply that small markets are somehow disadvantaged. A rising tide lifts all boats, as it were.
Reading your post, I sensed that you got our of bed on the wrong side today. You are likely right about scale given the perspective of the business you describe. Another perspective is that domain specific, mission-led organizations with affordable offerings, have an opportunity to shift some of the paradigms of publishing. For example, just because there is a rush to electronic does not mean that print has no value in some domains; we can experiment with creating new publishing tools in an open source framework for the communities we serve; we can invest and play with ebook and new products without always needing to generate a surplus, thinking more in terms of long term sustainability, and what a society is truly doing that is useful for its constituents. I am not saying it is going to be easy, but as an optimist, I think these are exciting times for non-profit publishers that are prepared to evolve.
You talk only about scale in terms of production. But how about consumption? Consumption seeks a value, so what’s the value for, say, the reader? Ready and free access is not the only criterion for why content is read–it may incur opportunity costs arising from reading content that is of low quality or searching for content that is of high quality.
Perhaps I’m being naive, but I think in the long term only those publishers that can produce a high-quality product (i.e., one that has been created with robust editorial standards) will succeed–for scholarly publishers, that means being able to identify good peer reviewers and editors, both of whom are scarcer than the number of authors wanting to publish. So the current fad about scale and speed may give way to more measured and diversified approaches.
I think the organizations that can scale both will win. Major advantages come from scaling production aspects, but you only do this if you can scale consumption, as well. What is being consumed is interesting to ponder. In the case of OA, it’s not necessarily audience but the authors’ appetite for citable works. Scaling that up has been financially successful for a few big players.
So I think quality is fungible and subjective. Convenience is a big factor for a large swath of any market, as is price. Scale solves both of these dimensions pretty well.
I hope we learn to value quality as much as you do, but I’m not convinced it will be either necessary or sufficient.
Perhaps quality is less of a concern for big publishing organizations that only think in terms of revenue streams and that come up with inventive metrics to prove their worth–but if this whole enterprise becomes more and more divorced from the reality that scholarly research is about being exact, thorough, and accountable, it might end up crushing its own legs and feet under that behemoth it created.
I would have believed this five years ago but up and coming audiences may not care about quality. They are “coming of age” in a time where news comes from Gawker or the Daily Show. Truths must be told in 140 characters or less. Post-publication peer review and peer review light are the hot topics with the younger researcher crowds. I fear quality of content is becoming irrelevant and those of us “niche” publishers clinging to that may be left in the dust with the future generations.
Angela, can you imagine that papers with implications on the health of people could find their way into further research (and get impact) without pre-publication peer review? With many irrelevant and erroneous scientific publications in the future web, readers may highly appreciate the services for quality that are offered by journal editors. This was outlined by Charlotte Haug in NEJM, 2013. I also spot some trends aiming at increasing the quality of science and practice, e.g. the Cochrane Reviews, or the efforts to develop guidelines for medical practice based on standardized methods that are transparent (e.g. GRADE). These are some points supporting the idea, that peer review will survive (maybe in a different form). What do you think?
If scale were the only criterion, then MOOCs should have proved to be great successes, right? But it’s not clear that they are really having much success at all, at least in dealing with problems people thought they could help solve, like cutting costs while serving lower-income students better.
One might point to commercial textbook publishing as an example of a sector where scale succeeded, with only a half-dozen companies now dominating a market where once hundreds of publishers played. But the move toward OER is challenging these major players now and will increasingly in the future, especially as more libraries decide it makes sense for them to get into this business, drawing on local faculty to prepare textbooks for use by local students. Here niche markets may take over, partly because in an online OA world it matters little how many copies get distributed since operating expenses are not supported by sales.
Kent, one exception to the rule of scale are (successful) startups – not just those disrupting ‘traditional’ markets, but even those entering inherently scale-based businesses. Large publishers have many advantages but they are also saddled with legacy systems and cultural biases which stifle speed and innovation. If small publishers follow the same playbook, then yes, they will likely fail – so they must think and act differently. If you were starting JBJS today, would you run it the way it is currently constructed? What products or markets would you abandon? Which would you invest in? How would you sell/market it differently? Etc. Just writing this, many ideas come to mind. Scale may win, but not always.
Kent, I agree with you about the significant competitive advantages regarding scale, generally speaking, but the question is one what basis does one define scale? For example, a commercial publisher might publish a thousand or more journals and a front list with as many books. These titles are, however, spread out across hundreds of subject areas which means they have significant, unscalable marketing costs. This publisher is able to develop economies of scale with regard to production systems, infrastructure, and shared resource areas (HR, finance, IT). Their biggest competitive advantage, however, is in institutional sales: Large bundles and the sales force to sell them. The large commercial publishers have known this for 15 years or longer and have explicitly been pursing a roll-up strategy.
However, there are places where other organizations can still compete effectively and neutralize the advantages of large commercials. One such place is an organization that dominates a vertical. This is another kind of scale. I’ll pick an organization we have both worked for: the American Academy of Pediatrics. They publish a small number of journals, a decent sized front-list of books, but then also produce education products, maintenance of certification products, live training, a large meeting, guidelines, and much else. They produce a large amount of content in a vertical. They have vertical scale. Vertical scale does not provide a competitive advantage in terms of production, IT, or other infrastructure areas. But it does provide a competitive advantage in terms of marketing. They have marketing scale. They can go to every single pediatrics meeting of consequence in the world and market their products and services – even the largest commerce houses, which do not produce enough content in the vertical to justify the cost, cannot do this. They know a great deal about every single customer they might want to reach. They will likely have contact with every single potential customer on a regular basis in some way. Moreover, while they can’t match the big deals of the commercial publishers in the commercial space, an institution that has a pediatrics department would be hard pressed take a pass on their bundle of content which includes a number of must-have assets.
So large publishers have one kind of scale that gives them an advantage in terms of production, infrastructure, and sales to some channels (institutions). A vertical organization has marketing scale.
The marketing scale of vertical organizations can be an advantage in competing for authors in an OA context. However, this only matters, as you point out, if coupled with a mega-journal. This can work in some verticals as the Optical Society of America has proved with Optics Express.