I admit it. As a humanist scholar I have not been much inclined to read books or articles on economics. I mean, what could be more boring, right? And all that math.
Well, my inclination has been slowly changing since I began writing this blog. My level of sophistication is pretty basic, and I still try to avoid the math whenever possible. But the economics of academic publishing, particularly journals, has become strangely compelling to me as I have learned more about open access and the dissemination of scholarly research as a digital product in an online environment.
My first exposure came just a few months after starting the blog. I read an interesting article by Caroline Sutton in College & Research Libraries News (December 2011) entitled “Is free inevitable in scholarly communication? The economics of open access.” Sutton applied the economic theory popularized by Chris Anderson in his 2009 book Free: The Past and Future of a Radical Price to argue that the online journal as a digital product operates on a marginal cost of production basis that will inevitably drive the price of additional copies toward zero. I wrote a review of Sutton’s article here. I was so intrigued by this economic concept applied to scholarly publishing that I also read Anderson’s book. I wrote a review of Free from the context of scholarly publishing here.
The economics of disruptive technologies
In a similar vein, I recently read an article by David W. Lewis in College & Research Libraries (September 2012) entitled “The Inevitability of Open Access.” [Incidentally, online editions of both College & Research Libraries and College & Research Libraries News, publications of the Association of College and Research Libraries, are now open access.] The sense of inevitability regarding open access is still there. But with Lewis “inevitability” shifts from a question to an assertion. How can he be so confident?
Lewis has chosen to view open access, and in particular, “pure Gold” open access (journals), through the lens of another economic (business) theory as described in the work of Harvard professor Clayton Christensen, seminally in his 1997 book The Innovator’s Dilemma (reprinted by Harper Business, 2011).
Christensen deals with “the failure of companies to stay atop their industries when they confront certain types of market and technological change” (p. xi). These companies fail not because they ignored sound management principles, but paradoxically—and hence the dilemma—because they didn’t.
[M]any of what are now widely accepted principles of good management are, in fact, only situationally appropriate. There are times at which it is right not to listen to customers, right to invest in developing lower-performance products that promise lower margins, and right to aggressively pursue small, rather than substantial, markets. This book derives a set of rules … that managers can use to judge when the widely accepted principles of good management should be followed and when alternative principles are appropriate. … I call [these alternative principles] principles of disruptive innovation. (p. xv, emphasis his)
I found Lewis’ appropriation of Clayton Christensen’s economics of disruptive technological innovation applied to open access journals interesting enough to go and read Christensen’s book for myself. Afterward, I came back to Lewis’ article, and re-read it with greater understanding. I find his argument persuasive.
Gold and Green Open Access
Lewis’ thesis is that “open access, especially in its pure Gold form, is a disruptive innovation and that given this we can anticipate that it will become the dominant model for the distribution of scholarly content within the next decade” (p. 493). This is a bold assertion, especially considering other recent research suggesting that as of 2009, Gold open access journal articles accounted for only about 8% of all scholarly articles published.
What does Lewis mean by “pure Gold” open access? Open access comes in two major forms, differentiated by color designations, Gold and Green. Gold open access refers to articles that are published in online journals that are made freely available to readers. Green open access refers to forms of articles (e.g., a preprint version, or a delayed post-publication version) that are published in traditional subscription journals but are made freely accessible through submission to an online archive (e.g., author’s website, or an institutional repository). By “pure Gold,” Lewis means articles that are made freely available immediately upon publication, without any kind of delay, “that [also] does away with the overheads associated with restricting access to content and for collecting money from readers or their libraries” (p. 494). Some subscription-based journals make article content available to be read for free after an embargo period (delayed). This could be seen as a form of Gold open access. But because the journal itself is still sustained by subscription revenue Lewis doesn’t consider it “pure” Gold.
Who are the customers?
Lewis talks about two markets that scholarly journals engage, and from a product perspective this situation proves to be fairly unique. “The first is the market for readers’, or their libraries’, dollars. The second…is for the right to publish the best scholarly works” (p. 494). To me, this translates into an interesting question: Who are the customers in the world of scholarly journals?
One obvious customer is the consumer of research communication, or his/her institutional proxy, the library. With subscription-based journals, the product that is purchased is access to research communication. In the print era, this customer also got a tangible product to put on the shelf. As Lewis notes, this customer is clearly advantaged by open access, since articles would be available to him/her at no cost.
There are two other customers—the producer of research seeking a publishing venue, and the publisher seeking high quality research to put in its journals. Lewis highlights what makes this particular market interesting and unique:
[A]uthors do not exchange their work for money; instead, they trade it for prestige, a much less tangible commodity. Enhancements in prestige then make it possible for authors to earn tenure and promotion or to compete for grants or better jobs. Because it takes time for a journal to establish a reputation, today most high-prestige journals are subscription-based. Authors wishing to enhance their reputations often feel compelled to publish in these established, highly thought-of venues and, especially before tenure, are unwilling to risk exploring other alternatives. Established scholars have generally been successful with subscription journals and often feel no need to change their publishing choices. Currently, inertia favors subscription journals. (p. 494)
This is a unique arrangement indeed, with an odd additional wrinkle. The research producer customer is buying prestige with her articles in hopes of building her academic reputation. But she is also the research consumer customer buying access, via a subscription, to those same articles with real money. Meanwhile, the publisher customer uses the reputation it has built-up over time from past research to buy articles from current research producer customers for the cost of prestige. It then turns around and sells those articles back to research consumer customers for real money. The reputation flows in two directions. But the money flows in only one—to the publisher. The money-paying customers (e.g., libraries) are saying this is no longer sustainable, especially as prices continue to rise at dramatic rates. Exploring publishing alternatives must be risked, otherwise access will become increasingly limited.
For Lewis, “currently” (from the previous quote) is the key word. Although prestige is a powerful currency, open access brings some real advantages to these markets. Pragmatically, “to anyone connected to the Internet, the author’s [open access] work is available to the widest possible audience. The work is not restricted to those whose libraries can afford the prices of high-prestige subscription titles” (p. 494). A principled case for open access observes that “many…for-profit publishers…have used their position as monopoly providers to charge excessive prices…[T]hese pricing policies are at odds with the interests of scholars and their universities” (p. 495). I would add, also on principle, that although “inertia [currently] favors subscription journals,” because reputation flows in two directions, established scholars (at least) would not be risking that much to vet open access journal initiatives with their articles and editorial participation. Isn’t this a better use of reputation than subsidizing the profits of commercial publishers?
The Gold open access journal as a disruptive innovation
After summarizing the history and current status of open access journals as documented in a recent article by Mikael Laakso et. al., Lewis turns to the research of Clayton Christensen to argue that Gold open access journals have the characteristics of a “disruptive innovation.”
Ironically, disruptive innovations rarely begin life as a superior product. In fact, they almost always start out inferior to products sold by established firms in established markets. Even though they start this way, disruptive innovations generally have two distinct characteristics. First, they bring a new value proposition to the market. This new value proposition is almost always the application of a new technology using a new business model. Second, disruptive innovations usually make it possible for customers who had not been able to access a service or product to acquire it. … Over time, the disruptive innovation improves and becomes suitable for some of the less demanding customers of the established product. The new technology and business model embedded in the disruptive innovation provides a cost advantage that draws these customers from the established product to the disruptive one and the established firm loses market share. As time goes on, the disruptive innovation gets better and better and eventually it attracts more and more customers and comes to dominate the market. …
One might expect established firms to be able to react to disruptive innovation. They are, after all, leaders in their industries and they did not achieve this position by accident. But, as Christensen documents, this rarely happens. Established firms have succeeded because they have established successful business models and values that reinforce these models. It turns out that business models and organizational values don’t change easily, and it is thus nearly impossible for established firms to quickly adjust to take advantage of new technologies in disruptive ways. (p. 497)
Following Christensen, Lewis describes Gold open access journals as a disruptive innovation. “It combines a new technology, digital distribution of content using the Internet, with a new business model, free distribution to the reader with cost paid by the author or through other means” (pp. 497-98).
It is interesting now to reflect on the early experiments of scholars in the 1990′s who saw the potential of the Internet as a medium for the broad and free distribution of scholarly research. Early efforts were often rudimentary and primitive. These scholars often encountered skepticism, if not outright scorn, from colleagues who couldn’t conceive of the Internet as a credible venue for “serious scholarly communication.” Resistance also came from academic administrations, who viewed this “Internet thing” with suspicion—just a passing fad (well, except maybe for email). But vast improvements in network technology and browser and document delivery software in a relatively short period of time have brought a remarkable level of refinement and quality to low-cost scholar-driven online journal publishing activity (e.g., the open source Open Journal Systems platform).
It is not surprising that commercial publishers, too, have now almost universally embraced online distribution for their subscription-based journals. But they are using this technology to sustain their existing business models and values, not disrupt them (a practice repeatedly observed by Christensen in his research). Consider, for example, the level of sophistication of digital technology which now enables a commercial publisher to put its content securely behind an electronic paywall, and to monetize their journals, with time-limited pay-per-view shopping carts, down to the article level. “Please have your credit card ready.”
Gold open access brings an entirely different value proposition.
It is hard to compete with free unencumbered access, and easy and free linking and sharing. For authors the value proposition is less clear, but…it is at least as compelling. Having your work a click away from everyone should in the end be better for authors than having that work locked up, even if the lockbox is currently prestigious. …
A final part of the the value proposition that Gold OA brings is to universities and other institutions that support the scholarly enterprise. Subscription journals cost these organizations large amounts of money. … If some of this money could be redirected into more cost-effective ways of distributing scholarship, such as institutional subsidies for open access publishing ventures or author charges to open access journals, this would be a benefit. (p. 498)
Lewis notes that the response of established publishers to Gold open access “is what Christensen would predict.” Because established publishers operate on different business models based on different values—many dating from the world of print (when they were the only game in town)—they are culturally unprepared to adjust to new realities introduced by the disruptive innovation of open access. They are scrambling to keep their value propositions in place while issuing reports of doom and gloom, expressing doubts and skepticism about the sustainability of Gold open access. Lewis sees the use of Hybrid OA (where an author can pay to make their article open access in an otherwise subscription-based journal) and Delayed OA (free access to articles after an embargo period) by commercial publishers, and their tolerance for Green open access, as efforts to appear pro-OA while protecting their author base for high quality research articles without jeopardizing subscription income.
The S-curve of disruptive innovation and its impact
From Christensen, Lewis notes that Gold open access as a disruptive innovation will replace the established subscription-based journal, not through linear substitution, but by following an S-curve pattern (growth charted over time)—a pattern observed over and over in other industries and products (e.g., digital photography). The innovation may languish with slow growth initially, then the pace of adoption accelerates dramatically, until it flattens-out again after acquiring market domination. This behavior is the basis of Lewis’ bold claim regarding the future of Gold open access. Based on historical to present data, Lewis extrapolates a couple of scenarios. A conservative estimate shows 50% of articles will be published Gold OA by 2021, 90% by 2025. A more aggressive estimate shows 50% by 2017, and 90% by 2020. “Even the more conservative estimate suggests a radical shift in the nature of scholarly journal publishing in the next decade” (p. 501).
Lewis spends the remainder of the article discussing the impact of a journal system dominated by Gold open access on a variety of stakeholders (authors, readers, libraries, established subscription publishers, scholarly societies, etc.), and he offers-up some interesting points of change, including one certain and inevitable result (regardless of how long it actually takes)—the disruption and decline of the subscription journal. We can try to fight it and lose (because that’s how disruptive innovations tend to work), or we can embrace it and participate in its results. “[I]n the end [Gold OA] is a disruption whose success will make our world better” (p. 504).
Now that’s not boring.
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