Caroline Sutton writes a provocative article in the December 2011 issue of College & Research Libraries News entitled, “Is free inevitable in scholarly communication? The economics of open access.” Drawing on Chris Anderson’s book Free: The Past and Future of a Radical Price (Hyperion, 2009), Sutton makes a bold assertion regarding the economics of academic journal publishing in the online space:
In this article I would like to make the case that a change in the delivery of scientific content and in the business models for delivering scholarly communication was inevitable from the moment journals moved online, even if much of this change is yet to come. By applying a thesis put forth by Chris Anderson in his 2009 book Free, I will argue that given that scholarly journals are now digital products, they are subject to very different economic principles and social forces than their print ancestors.
Anderson’s thesis on competition and pricing in the digital market begins with Bertrand economics, which states that in a competitive market, the price of a product will move toward the marginal cost of producing an additional good. … Because the costs associated with bandwidth, storage, and processing are being reduced by approximately 50% every year, digital products get cheaper every year, and indeed have become so cheap that the marginal cost is so small as to render it near to impossible to measure. … It is for this reason the default price of a digital product is zero: zero is inevitable. …
Scholarly journal articles are no different from any other digital product with respect to distribution costs. As such, one can argue that our product is also subject to the “zero is inevitable” rule of pricing. (p. 642, emphasis added)
Sutton is an open access publisher at Co-Action Publishing and president of the Open Access Scholarly Publishers Association. She brings significant experience from the commercial publishing world to this issue. In a curious way, although her commitment to open access is strong, Sutton’s assertion gains credibility for me precisely because Co-Action Publishing is run as a for-profit business. While I might base my commitment to open access on more altruistic principles, Sutton and her partners have real money riding on this. (Incidentally, I don’t say this because I believe that risking money indicates a higher level of commitment than altruism. People and businesses squander money on foolish ideas all the time. I simply mean that Sutton isn’t merely offering an interesting thought-experiment or academic exercise. Her argument is tied to her experiences of running a real business in the real world.)
Reading Sutton’s article made me interested in reading Chris Anderson’s book, which I had not gotten around to up to that point, though I’ve had a digital copy of the book in the Kindle app on my iPad for some time. I would like to engage with Anderson’s thesis as it relates to open access scholarly communication a bit myself in a subsequent post. But here let me interact with Sutton’s take on the notion of “zero is inevitable.”
To be clear, Sutton (following Anderson) is not saying it doesn’t cost anything to publish an academic journal. The key situation is that publication of journals in the online environment eliminates costs associated with producing and moving around journal issues as physical objects (paper and ink, printing machinery, warehousing inventory, shipping, etc.). The key concept is “the marginal cost of producing an additional good.” After a journal article has been created and uploaded to a publisher’s server as an electronic file, it costs virtually nothing to “make” an additional copy or copies of that file. The key activity and infrastructure to which the “zero is inevitable” economic principle is applied is the distribution costs—that is, costs associated with getting journal articles out to readers. Yes, would-be readers require access to a computer or smartphone, and an Internet connection. But after that, all they need to be able to do is click a link on a webpage. As Sutton writes:
In addition to staffing and other overhead costs, there are also a number of fixed article and page-related costs (e.g., copyediting, language editing, typesetting, etc.) that must be covered in some way. The point is that these are largely fixed costs that are the same regardless of whether one user finds and downloads a given article or if 5 billion users find and download it. The marginal cost of adding one additional user is for all practical purposes, zero. In this context, charging for access as such involves charging for that which does not cost. (p. 642, emphasis added)
Now stop for a moment and let that last sentence really sink in. “In this context, charging for access as such involves charging for that which does not cost.” This is a remarkable admission for a for-profit publisher to be making! The traditional knowledge-is-a-scarce-commodity-subscription-based-or-pay-per-article-view-model commercial publisher would not want us to know about this. In the physical world, increasing a journal’s subscription base scales to reduce the costs of printing additional copies. But in the online world there are no additional copies to produce. Subscriptions or per-article download fees to cover distribution costs should not be necessary. Incidentally, in case you were still thinking about this from the point of view of the physical world, an online publisher doesn’t “stock” their servers with multiple copies of journal articles waiting to be downloaded like a bookstore stocks their shelves with the latest hardcover bestseller. The duplication happens on the user side when a download link is clicked. With the exception of a copy sitting on a back-up server, there is really only one electronic file required for each article. Further, the size of that file (commonly a PDF) is nearly inconsequential from a storage perspective. So, the costs aren’t merely reduced by scale. They effectively cease to exist! Again, none of this denies the costs incurred by publishers to initially set-up and maintain an online infrastructure, though it is clear that most publishers are now working in a born-digital environment, even if they are still engaged in print publishing. By continuing with subscription-based or pay-per-article-view models in the online space, traditional for-profit publishers are effectively “charging for that which does not cost.” Applying an old model to a new online reality enables them (for the time being, at least) to further reduce their overall bottom-line costs and maximize their profits.
But scholars and libraries are beginning to seriously question the sustainability and fairness of the old model (historically tied—some would say in an exploitative way—to the academic system of peer review and tenure and promotion), especially now that alternatives exist. Sutton has chosen a different approach.
Whether for profit, non-profit, large or small, publishers must have the resources to produce the first copy of an article and all goes with it (not to mention further research and development). The challenge of the digital marketplace, as Anderson points out…is to identify new and creative ways to build businesses and revenues around giving products away. In the case of scholarly publishing, giving away products amounts to open access, and the question is how to “give away” articles yet stay in business.
Because there are no additional costs for additional users, we have moved the payment mechanism away from that element in the publishing process that is near zero in cost (digital distribution of articles), and instead applied it to a stage of publishing where we are in fact consuming resources (for preparation of manuscripts for publication and other work). Thus, the article as such is demonetized. (p. 643, emphasis added)
Sutton maximizes distribution through open access. Since the costs associated with adding users is close to zero, her business leverages this “free” aspect to get the word out about her business through the products of the scholars who publish their articles with her. Maximum distribution, including giving permission to authors to self-archive in digital repositories (a problem for many traditional commercial publishers), is reconceptualized as a marketing tool.
Not only is wide distribution a service to our authors, as the number of people who are reading our content grows, it becomes increasingly likely that enough of them will also submit an article to a journal that is accepted by an editor, and for which we can charge a fee and recover our costs. (p. 643)
The use of article processing charges is one way Co-Action Publishing generates its revenue. In the sciences, the costs of article publication can often be rolled into research grant funding. But that doesn’t mean there is no competition in this space to control costs and provide choice.
[W]e regard our work as a service to authors. This is where competition is—in providing customers (authors) with a preferred service at the right price. (p. 643)
Now here is a refreshing perspective—that a publisher would regard the scholar author as a customer to be satisfied because they have a choice, and can take their business elsewhere.
Sutton suggests creative ways to generate additional revenue by offering enhanced features to the author on top of the basic free version of the article.
Repositories might represent a basic version of a service to an author (the possibility of depositing a flat word doc or PDF), while the article on the publisher’s platform is a premium version with added features such as semantic searching, the publisher’s work to distribute the article, etc. that add value to the author’s work, and which he or she may be inclined to pay for. (p. 644)
Sutton admits that many traditionally published top-tiered journals maintain high marginal utility even after moving online because of long-standing reputations and high impact factors that continue to attract the best research. These top journals currently have little incentive to move toward an open access model because they don’t feel the competition. “At its core the scholarly economy is a reputation economy in which prestige ranks before all else” (p. 644). The challenge is to produce open access journals that can compete on prestige by quickly building reputations. Sutton refers to a number of open access journals in biology and medicine published by the Public Library of Science that have managed (in less than 10 years!) to earn top-tier reputations.
Sutton also notes that an open access journal can get a kickstart on reputation by being funded by a prestigious or respected organization in the discipline. I have often thought that in the fields of religion and theology an organization like the American Theological Library Association could lend its credibility to promote the creation of new open access journals. In 2008 they began publishing an open access journal geared to theological librarians, so they are already gaining valuable experience in this alternative space.
Sutton doesn’t reference Anderson on this point (more on this in Part 2), but the currencies of the Web are links and traffic. Links are like citations in scholarly communication. They indicate an author’s presence on the Web. As these links are discovered they drive traffic (measured by clicks), which is really a metric of attention. As attention grows so does reputation, which tends to drive more traffic, further enhancing reputation. In the online environment, prompt publication, broad distribution, and immediate free access (coupled, of course, with competent and engaging research reporting) can help authors (and their associated journals) to build attention and reputation in ways, and at a pace, that authors whose articles are locked behind paywalls of (albeit) prestigious journals cannot do. This, it seems to me, is also an opportunity for open access.
Does Caroline Sutton make the case about the inevitability of free in scholarly communication? Although the transition of academic journals to the online environment is now largely complete, it is still too early to tell how various business models will play out. It does seem beyond question, however, that open access is a viable alternative to traditional subscription-based revenue models. Libraries have long complained about the sustainability of the old model in the face of continually rising prices and shrinking budgets. Too, the scholars themselves, who have long been passive in this relationship, are starting to wake up and some are even revolting against the exploitative practices of many big name commercial publishers, especially around the issues of intellectual property rights, and the abuse of their free labor in peer review. This can only help enhance the case for open access.
The landscape is definitely changing, where creativity and innovation are driving new business models. I mean, who would have thought the day would ever come when the concept of a “for-profit open access publisher” would not be perceived as oxymoronic?
In Part 2, I will share some of the insights for open access journal publishing I gained from reading Chris Anderson’s book for myself. Stay tuned.