In the late 1990s, there was a tsunami of utopianism as content moved into the browser. Many were swept up by a belief that digital purveyance would be so cheap as to be virtually free; that content could be liberated from containers to become ubiquitous; and that previously hidden knowledge would be unlocked to the benefit of all. The subscription model and its walls of pay were certainly doomed.
The utopia hasn’t materialized, despite major efforts and significant change. The subscription model is still prevalent, and open access (OA) continues to be a relatively minor part of the scholarly publishing economy even 20 years hence. At the recent Researcher-to-Reader (R2R) conference, the difficulty of making OA business models work in isolation was a consistent theme. Gold OA has created conformity rather than disruption, both in the pricing of services via the model but also by further entrenching the largest publishers, who are better positioned to execute on its underlying economies of scale. Author-pays has also enabled a new type of publishing scam, the so-called “predatory publishers.”
Now there may be another storm of change gathering on the horizon.
But before we get to that, let’s talk about the calm before the storm, which has been portrayed by some as the stagnation before the storm.
In our industry, the last decade does seem to have been one of relative stagnation when it comes to business models and their downstream effects (business models are governance, I remain convinced). Much of our thinking has ossified, so much so that politicians in the EU and elsewhere are now dictating how far we can innovate and how we conduct business. (When governments appropriate your innovation, you know you’re moving too slowly.) Publishers now behave as if there are two business models possible — site licenses and Gold OA APCs. These have been generally successful in combination, but everywhere you look, it seems we’re running out of rope. Nevertheless, the success of these may have kept us from pushing the boundaries or looking for other options.
Stagnation is occurring at the macro level in the information industry, with the narrowing of options in Silicon Valley perhaps the most surprising sign, especially given the dominance a few companies have achieved.
Once the hotbed of innovation around content distribution, Silicon Valley has been captured by an advertising-based business model that has turned out to be a flytrap, its billions of dollars too hard to resist even as the jaws close around the companies lured into it. As Zeynep Tufekci, an associate professor in the School of Information and Library Sciences at the University of North Carolina, said during a recent podcast interview:
Here’s the ironic thing. Because it’s so easy to make money this way, Facebook and most of Silicon Valley is stuck in a non-innovative space. They’re not disrupting anything. They’re very non-innovative. They’re just sort of making a lot of money doing one thing, which is they’re ad brokers. There are all these other ways in which our social media could work. There are all these new technologies that they could harness to do things better. None of it is happening, really, as far as I can tell, because this is very profitable this way.
Stagnation means you’re a sitting duck, and sitting ducks are vulnerable. Facebook’s time-on-site is falling as users move to other platforms, many with subscription options and better revenue-sharing for content creators. Social media magnates are being castigated as “useful idiots” in the geopolitical turmoil that is roiling western Europe, the US, and Asia. Unreliable narrators — from partisans to bot armies — are everywhere. Silicon Valley executives are becoming aware of it, with Jack Dorsey, CEO of Twitter, tweeting last week the following as part of a longer thread:
We have witnessed abuse, harassment, troll armies, manipulation through bots and human-coordination, misinformation campaigns, and increasingly divisive echo chambers. We aren’t proud of how people have taken advantage of our service, or our inability to address it fast enough.
— jack (@jack) March 1, 2018
Russian hackers, propagandists of all stripes, and demagogues are dominating our media outlets by using the advertising-driven social platforms exactly as they were designed to be used — by targeting, building social validity by whatever means available, and making money all the while.
It doesn’t even take malfeasance to put a thumb on the scale, it turns out. Facebook’s advertising-responsive algorithm — which sells access for less if it deems the content more likely to be clicked (more “click-baity”) — itself seems to have intervened in our election. A story in WIRED outlines how adds run by Donald Trump cost 1-2 orders of magnitude less on Facebook than ads run by Hillary Clinton because the Trump ads were more inflammatory and extreme, making them far more likely to be clicked by the algorithm’s calculations:
If Facebook’s model thinks your ad is 10 times more likely to engage a user than another company’s ad, then your effective bid at auction is considered 10 times higher than a company willing to pay the same dollar amount.
This and other factors have led some to note that “Facebook isn’t safe at any speed.” The concern is about basic product design and commercial incentives, which are purveyed without the requisite responsibility, with all the risk externalized to society.
Within this stagnant and corrupted information space, another tsunami is generating a tide that may sweep away the detritus. This tsunami is more serious, less glib, arriving not with thunder and lightning but with steadily increasing winds. This stormfront views quantity skeptically and promotes quality; avoids zero-sum business models and pursues win-win business models; shuns producer-pays economics and promotes recipient-pays economics; and overturns amateur work in preference for professional outputs.
Pivot to readers.
This larger storm has the potential to transform Silicon Valley’s business model. If so, it will also shift the tide our industry rides.
An early Facebook advisor has suggested that Facebook itself must fundamentally change, with Roger McNamee recently writing in the Washington Post:
Facebook could adopt a business model that does not depend on surveillance, addiction and manipulation: subscriptions. . . . Facebook might allow customers to choose between its current model and subscriptions. Customers who remained on the advertising-supported service would still be subject to filter bubbles, addiction and manipulation, but growth in subscriptions would reduce the population of affected people. Subscription services could be implemented not only in the United States but also in most of the developed world. This wouldn’t just be good for Facebook. It would be good for America and for democracy globally.
As Tufekci states in the interview with her referenced above:
I would like to change the business model [of Facebook] to be the customer.
YouTube has pivoted to the subscription model, and has consequently become a much better curator, as this tweet from fellow-Chef Todd Carpenter from this week’s ER&L meeting in Austin reflects:
Every time a platform says they can’t solve these problems, consider how YouTube manages to keep porn off the system. #erl18
— Todd Carpenter (@TAC_NISO) March 5, 2018
The subscription model inherently raises the right guardrails for content because content purveyors have to please the reader. By pivoting to the subscription model, YouTube has pivoted to the reader.
When major voices in Silicon Valley begin praising a shift in business models in compelling terms, change is afoot on a grand scale. And there are compelling social and business reasons to make the shift. Subscription models are more lucrative, less prone to exploitation, and more stable. From a purely business standpoint, the potential to make more money with less volatility and fewer headaches certainly must appeal to the beleaguered leaders at Twitter and Facebook. Add to this the fact that peer companies — Netflix, Amazon, Apple — are succeeding with the subscription model and largely keeping themselves out of hot water, and you can see a confluence of incentives.
In our industry, the Gold OA model is now relatively long in the tooth, while possessing many of the characteristics the broader information economy is suddenly finding problematic — producer-pays economics, volume prized over quality, and risk externalized to the user and society via non-professionalized content in repositories and preprint servers, as well as lower editorial standards.
Innovation has arrived with subscription businesses, from metered paywalls generating millions for newspapers to the Wall Street Journal’s new predictive paywall.
Another harbinger of change is WIRED’s move to the subscription model, with the likes of the Atlantic, Business Insider, and CNN all either launching or announcing digital subscription products in the past year.
Like a refreshing breeze, innovation has arrived with the subscription model, from metered paywalls generating billions for newspapers to the Wall Street Journal’s new predictive paywall, which uses various data signals to predict a user’s likelihood to subscribe:
Non-subscribed visitors to WSJ.com now each receive a propensity score based on more than 60 signals, such as whether the reader is visiting for the first time, the operating system they’re using, the device they’re reading on, what they chose to click on, and their location (plus a whole host of other demographic info it infers from that location). Using machine learning to inform a more flexible paywall takes away guesswork around how many stories, or what kinds of stories, to let readers read for free, and whether readers will respond to hitting paywall by paying for access or simply leaving. . . . The Journal has found that these non-subscribed visitors fall into groups that can be roughly defined as hot, warm, or cold.
It’s noted in the article that using “propensity modeling” isn’t new — the technique is widely used by app developers for in-app purchases. As a form of targeting, it’s reminiscent of traditional marketing with differential prices or offers to core or non-core markets, different professional statuses, or various educational standings. In its immediacy and complexity, it’s a leap in sophistication.
There’s a tangent here I wish to pursue. It involves Baumol’s disease, an eponymous economic theory in which work that requires more human effort rises in cost at a pace that far exceeds the average. Given the falling prices for manufactured and automatable products and services, the net to the overall economy is manageable. For example, while costs for healthcare and education have risen at levels far above inflation, these costs have been offset largely by cost savings elsewhere — in cheaper clothing, food, electronics, and transportation.
The twist in Baumol’s disease is that the threat doesn’t come from the problems associated with rising costs, but from the problems associated with cheap, widely available, and disposable goods. These problems include pollution, global warming (more factories, more people driving affordable cars), and over-consumption of natural resources. The problems with expensive things are money problems, while the problems caused by cheaper goods are difficult if not impossible to rectify because they affect the natural environment.
To turn this to analogy, the price we’re paying for cheaper information is akin to pollution, with confusion and polarization giving our version its own bitter flavor. Will there be long-term effects? Are they harder to undo? I believe the answer is yes. Anti-vaccination lies have been with us for 20 years. The effects of Russian election meddling (Brexit, Trump) will be with us for decades. The erosion of the scientific foundations of Western republics and democracies will be hard to undo. The social fissures caused by social media will be hard to close. All of this was due to cheap information, not because of expensive information.
The price we pay later is not always the price we pay at the start. Perhaps as the subscription model returns, we can pay the price up front in the form of money, instead of paying a steeper set of prices years or decades later due to an unforeseen undertow.