The worst kept secret in scholarly publishing has finally been revealed. Wiley has officially announced their new division called Wiley Partner Solutions.
Wiley has been building to this moment for many years and now has a full cadre of acquisitions to support the roll out. Covering almost the entire enterprise, here is what it looks like:
- Manuscript creation and collaboration via Atypon purchases of Manuscripts.io and Authorea
- Journal submission and peer review systems via eJournal Press
- Manuscript cleanup and templated outputs via Inera and Authorea
- OA payment processing via Knowledge Unlatched
- Publishing platform via Atypon
- Online career center services via Madgex
- Auxiliary staff support in editorial and production via J&J Editorial
With the exception of typesetting and printing, Wiley has built an end-to-end solution for societies looking for a full suite of services. Clarke and Esposito wrote about this earlier this year in answering the question of why Wiley is acquiring publishing services companies: “The answer, we imagine, is in part to benefit from economies of scale, in part risk mitigation, and in part more flexible society customer management.”
But wait, don’t societies get all this and more through a traditional publishing agreement with a commercial publisher like Wiley?
Yes, many of these services would be provided in a typical publishing agreement. The agreement, however, is a profit-sharing model. In exchange for these services (more or less), the publisher will sell subscriptions, licensing, permissions, reprints, and maybe advertising and pay the society a royalty (or portion based on certain minimums) on the earnings minus expenses.
This can be a pretty good deal for the society. Societies offload the vendor management (as well as a significant number of staff) for what will likely (in this market) be about equal in overall annual returns. What’s more, these contracts will run from 3-7 years making it easier for the society to know exactly what the expenses and revenue will be during the term.
Another piece to these agreements is that the publisher may/will pay out a “guarantee.” This is the minimum royalty that a society can expect in any given year. The guarantee is a risk to the publisher. The publisher is stating that projected revenue on a contract will exceed a certain threshold and that the society will receive that minimum no matter what.
For example, if the guarantee is $1 million with a 50% royalty, the publisher must net at least $2 million to make the guarantee. If the publisher only nets $1.5 million, they will still owe the society $1 million, even though 50% of net is $750,000. If the publisher nets $3 million, the society will receive $1.5 million (the $1 million guarantee plus $500,000 royalty above guarantee).
You see where the problem is here — guarantees are a bad deal for the publisher when there is so much uncertainty in revenue generation. In this march to open access, which many believe is a slog to article processing charge (APC)-based open access (OA), the general consensus seems to be that publishers (society and otherwise) stand to make less money. The question is how much less.
Under traditional contracts, publishers often include page budget restrictions on journals to cap the expenses. In an open access model, volume is how the money is made. An open access portfolio under a traditional contract with guarantees and royalties may feel pressure to accept and publish more papers, which is not a scenario anyone wants to be in.
There are a few reasons why a society would partner with a publisher:
- Managing vendors is resource intensive and sometimes very frustrating and expensive
- Staff is the highest rising cost
- Societies that aren’t huge are largely left out of consortia or transformative agreements (again, this has expensive staffing or vendor needs)
- Uncertainty in future revenues introduced in large part to Plan S and now US Federal Agency requirements
- Other society finances and shortfalls outside of publishing divisions
- And many more…
Some societies have been partnered so long, that there is no going back to being self-published. Some change publishers once a decade, which is an enormous pain and time suck (think changing your phone company but 1000 times more complicated).
In a world of “well, journals will just need to get used to not making as much money,” society journals in a commercial partnership are vulnerable in renewal negotiations. They may find new financial terms that greatly reduce their revenue, or possibly a lack of interest in renewal from their current partner.
Enter Wiley Partner Solutions. This turns the publisher-partner model on its head. Instead of a full partnership, the publisher now becomes a paid supplier of services and technology to the society. Those services might include sales support and inclusion in Transformative Agreements, of which the publisher will take a cut, but the financial risk once assumed by the publisher now shifts entirely onto the society. Performance of the journals no longer matters to the publisher, as they’ll be getting paid regardless of actual revenues. Journals may get a referral fee for some services purchased by their authors (infographics, videos, plain language summaries, etc.) or rejected manuscript transferred into the Wiley pool of journals.
For services rendered, the society will pay. It may cost more. It may cost less. There are still holes, such as typesetting and tagging (which may ultimately be replaced by the above-mentioned Wiley owned conversion tools and templates).
David Crotty wrote about publisher as service provider and noted “For the publishers, you earn revenue from the expensive process of producing the material without having to cover any of the costs incurred. Then, once the paper is published, it will be CC BY-licensed, and you can still reap all the benefits as if you had published it yourself. You can plug it right into your workflow system and still sell the analytics and all the other pieces you’re selling for your own journals.”
There is nothing cynical about this analysis. Wiley has been driving and enabling OA in an aggressive manner and did so knowing that the finances don’t work out for all their deals. Not all journals will make it in an all-OA world and shrinking your customer pool comes with a need for diversifying revenue.
Atypon began making purchases prior to being bought by Wiley that hinted at an end-to-end-ish solution. There were some holes — namely a peer review system. The acquisition by Wiley enabled additional capital to build or purchase the missing parts. The J&J Editorial purchase is a strategic add, in that societies without the internal resources for managing all the parts of this model can find that support in J&J Editorial. In fact, staff at J&J have been training on use of the Inera editing tools and on loading content into the Atypon platform.
This consolidation over the years also means that other commercial publishers are contracting for Wiley services — Elsevier journals on Atypon, publishers using Madgex, Nature Publishing Group on eJournal Press. I don’t see a lot left to acquire if another commercial publisher or entity wants to build a similar suite of offerings.
Back to the original premise… the traditional publishing contract with royalties and guarantees may not work if current funder mandates push the industry to APC-funded open access, which seems to be the trend these days. Many have commented that APCs will continue to go up to preserve as much revenue as possible (particularly if highly selective journals that benefit from exclusive licensing arrangements flip to OA), but we may also lose papers overall from underfunded fields or institutions. Smaller society publishing programs have already been deemed “collateral damage” in the quest to make content free to read with zero embargo.
Offering Publisher Partner Solutions is a smart way to keep society journals in the portfolio without having to take the risk with guarantees. Whether the math works for societies remains to be seen.
Disclosures: ASCO, at which I am the Vice President of Publishing, is a customer of Atypon and J&J Editorial. ASCO’s Career Center is hosted by Madgex. I have been an invited speaker at Atypon user meetings and at the Wiley Executive Seminars. I have not been financially compensated for those speaking roles.