News & Views: OSTP Memo – Modeling Market Impact – Delta Think

“This month we look at the possible effects of the new OSTP Public Access policy on the value of the scholarly publishing market. We also suggest some ways that publishers can meet the challenges ahead….

At this stage it is not possible to predict the specific approaches the various federal agencies will choose. The policy does not rule out publication in hybrid journals and the economic impact assessment discusses the notion of publication charges. Issues around licenses, manuscript types, and manuscript location, are left open as well as requirements around data.

The models below consider a general case: What might happen if “open” content in some form is good enough to replace subscriptions? And is there an upside if the newly open content were paid for in some way? …

The OSTP’s Economic Impact Statement (issued along with its new policy) puts this proportion at between 6.7% and 9.1% of global output. Our own analysis suggests a figure between 6.6% and 7.2%. …

Specific publishers will find their situation different to the broad market averages. One difference will be the share of their papers arising from US federally funded research. Delta Think has worked with publishers, predominantly US-based, where federally funded research accounts for 30-50% of their publications. A second difference is the size of the gap between the lower revenue generated per open access article, and the higher revenue generated per subscription access article. For many publishers, the difference is less than the market average. So as the balance of their publication output shifts towards OA, their subscription revenues won’t fall as quickly as market averages….

A few other important drivers are not immediately obvious from the charts:

The US’s share of global output is declining slowly: 1 percentage point or less per year, depending on the data sources used. Therefore, the effects of the OSTP policy reduce over time. (Which is why the charts head back towards the horizontal axis.)
Pricing policies are key. Understanding reduction in market value could help publishers to set price increases and help funders and buyers to understand likely cost implications. Publication fees can be optimized across a portfolio of journals and subscription prices raised further to offset softening revenues.
As the difference in revenues per article between OA and subscription narrows, then the effects become less profound. We have long noted that publication charges are likely to rise to achieve parity with subscriptions.
The models show revenue changes compounded over time. They don’t show annual revenue increases generated by increasing APC prices….”

 

Statement from Shelley Husband, Senior Vice President, Government Affairs, AAP, on Decision by The White House Office of Science and Technology Policy to Make Private Sector Publications Freely Available – AAP

“Today’s announcement from OSTP about access policies for private sector research publications comes without formal, meaningful consultation or public input during this Administration on a decision that will have sweeping ramifications, including serious economic impact….

In a no-embargo environment, in which private publications will be made immediately available by the government for free, our primary concerns are about business sustainability and quality.  

Many publishers have increased the speed and efficiency of the publication process, regularly launched new journals to increase the dissemination of research and embraced diverse publication and access models to sustain and support researchers and research institutions, including those that reduce time to access.  This important work is part of a competitive marketplace geared towards excellence; it is very different than the government mandating business models.  How will publishers, especially small publishers, sustain the accuracy, quality, and output that the public interest requires?

As we work with the Administration and Congress in the days ahead, our focus will be to preserve our nation’s leadership in research and innovation, and to ensure that we continue to have a vibrant independent industry for scholarly publications.”

Helpful feedback on ‘Social cost’ · Gabe Stein

“Well, some people read my last blog post about startups and academic publishing, which doesn’t usually happen. Thanks to everyone for reading, and for providing awesome feedback on Twitter.

I’m not active on Twitter for a variety of reasons, mental health and not wanting to do free work for surveillance capitalists chief among them. But I’d like to meaningfully engage with, and give folks credit for, their helpful feedback. Plus, I realized it served as a great opportunity to experiment with the very new models of evaluation we need to see become mainstream in a low-stakes environment….”

Social cost · Gabe Stein

“At first glance, the staid academic publishing industry seems like a perfect fit for disruption in the form of an enterprising startup. Its total addressable market, or TAM, (~$19b revenue/year) is more than big enough to support a unicorn or two. It relies on centuries-old processes based in the limitations of print that have been proven to be ineffective and inequitable. It is dominated by a few large mega-corporation incumbents who, like the newspaper industry before them, have become used to extracting enormous profit-margins for activities that produce questionable value….

So, an enterprising startup should be able to succeed by raising enough money to build a slick new publishing platform and pay to subsidize researcher usage of it until their institutions are forced to recognize their contributions and pay to support the platform. Thanks to the rise of a new generation of private labs like Arcadia Science, a KFGundefined member and partner, and Focused Research Organizations (FROs), the job actually appears to be less complex than ever, because a lot of the initial bootstrapping of the platform can be cross-subsidized by a new type of institution without the constraints of universities, rather than paid for directly by the startup.

In theory, I think this should work. And to be clear, I think private labs and FROs are a key part of the solution, because they can help reduce the risk of adopting new forms of publishing by proving the models outside the status quo. But in practice, what we’ve learned building KFG over the last 7 years is that the startup approach to building disruptive academic publishing technology is often doomed by a failure to understand the complexity of the market….

With the caveat that I’m incredibly biased by my employer, I believe the solution, as I wrote above, lies in creating a new type of knowledge institution that combines the best of startups, non-profits, and expert consultants. These institutions must be capable of producing innovative, trusted technology that allows anyone to experiment with new approaches to publishing. But that’s not enough. They must also be able to reduce switching costs by combining those tools with services that help users maintain the right ties to the status quo that give them the credit and credibility in the current system without reinforcing the worst parts of it. And they must find a way to become sustainable on their own merits so that they’re not reliant on grants, of which there simply aren’t enough to support technology organizations over the long term. KFG won’t be the only one of these institutions, and our approach won’t be the only one that works (if it does). But until we acknowledge the complexities of this market, and the challenges new entrants face, we’re going to see a lot of startups come up empty in their attempts to disrupt anything except their own bank accounts.”

The Closed-Loop Academic Publication Data Conundrum

“For this presentation we are looking at some of the potential implications of the increasingly closed-loop model of academic publication, student learning platforms, personnel management, and other elements of quantification being developed and sold by an increasingly small number of academic solutions companies. While there are a number of interpretations of these mergers, acquisitions, and ventures, from our perspectives as librarians from two ends of the research apparatus, we see many problems stemming from the increasingly tight connections between the scholarship that is produced, the perceived value of these publications in the market, and impacts on future research funding, student development, faculty positions, and more. We are uneasy, as we will discuss, by the ways in which this constricting pipeline may endanger our shared values in libraries and in higher education more broadly….”

Elsevier appoints Judy Verses as President, Academic and Government Markets

Elsevier, a global leader in research publishing and information analytics, is pleased to announce the appointment of Judy Verses to the newly created role of President, Academic and Government Markets. Judy will join Elsevier on May 2, 2022, as a member of the company’s executive leadership team, reporting to Kumsal Bayazit, CEO; she will be based in Amsterdam.

Judy will be responsible for Elsevier’s global strategy for product development, sales, marketing, academic relations and research intelligence solutions to serve the needs of academic researchers, librarians, research leaders, policymakers and funders. She will be instrumental in building on Elsevier’s extensive open access (OA) offerings that include more than 600 gold OA journals, over 2,000 institutions served by transformative deals around the world and some 119,000 OA articles published in 2021. Judy will oversee the company’s broad product portfolio aimed at academic and government customers, including…

 

EU: academic publishers are monopolists | bjoern.brembs.blog

The market power of academic publishers has been a concern for all those academic fields where publication in scholarly journals is the norm. For most non-economist researchers, the anti-trust aspects of academic publishing are likely confusing and opaque.

For instance, libraries and consortia are exempted from organizing tenders for their publication needs as each article exists only in one journal with one publisher. This is called the single or sole source exemption from procurement law and essentially means that academic publishers have monopolies on each of their articles and hence each of their journals.

At the same time, this conglomerate of monopolies is often referred to as the “publishing market“, where there is market consolidation or concentration, leading up to an “oligopoly“.

So which is it now, a market with competing providers or a conglomerate of monopolists?

 

bjoern.brembs.blog » EU: academic publishers are monopolists

“The market power of academic publishers has been a concern for all those academic fields where publication in scholarly journals is the norm. For most non-economist researchers, the anti-trust aspects of academic publishing are likely confusing and opaque.

For instance, libraries and consortia are exempted from organizing tenders for their publication needs as each article exists only in one journal with one publisher. This is called the single or sole source exemption from procurement law and essentially means that academic publishers have monopolies on each of their articles and hence each of their journals.

At the same time, this conglomerate of monopolies is often referred to as the “publishing market“, where there is market consolidation or concentration, leading up to an “oligopoly“.

So which is it now, a market with competing providers or a conglomerate of monopolists?…”

Why publication services must not be negotiated | bjoern.brembs.blog

Recently, the “German Science and Humanities Council” (Wissenschaftsrat) has issued their “Recommendations on the Transformation of Academic Publishing: Towards Open Access“. On page 33 they write that increasing the competition between publishers is an explicit goal of current transformative agreements:

publishers become publication service providers and enter into competition with other providers

This emphasis on competition refers back to the simple fact that as content (rather than service) providers, legacy publishers currently enjoy monopolies on their content, as, e.g., the European Commission has long recognized: In at least two market analyses, one dating as far back as 2003 and one from 2015, the EC acknowledges the lack of a genuine market due to the lack of substitutability:

it is rare that two different publications can be viewed as perfect substitutes, as there are differences in the coverage, comprehensiveness and content provided. Therefore, in terms of functional interchangeability, two different publications could hardly be regarded as substitutable by the end-users, the readers. On that basis, the Commission found that consumers will rarely substitute one publication for another following a change in their relative prices

or

Publications for different academic subjects are clearly not substitutable from the reader’s point of view. Even within a given discipline, there may be little demand side substitution from the point of view of the individual academic between different publications.

As this lack of substitutability is one of the main sources of the problems associated with academic publishing today, not just the German WR, but many initiatives around the globe see increased competition among publishers as key to moving forward.

bjoern.brembs.blog » Why publication services must not be negotiated

“Recently, the “German Science and Humanities Council” (Wissenschaftsrat) has issued their “Recommendations on the Transformation of Academic Publishing: Towards Open Access“. On page 33 they write that increasing the competition between publishers is an explicit goal of current transformative agreements:

publishers become publication service providers and enter into competition with other providers

This emphasis on competition refers back to the simple fact that as content (rather than service) providers, legacy publishers currently enjoy monopolies on their content, as, e.g., the European Commission has long recognized: In at least two market analyses, one dating as far back as 2003 and one from 2015, the EC acknowledges the lack of a genuine market due to the lack of substitutability…

Without such prestige, the faculty argue, they cannot work, risk their careers and funding. Arguments that these ancient vehicles are unreliable, unaffordable and dysfunctional are brushed away by emphasizing that their academic freedom allows them to drive whatever vehicle they want to their field work. Moreover, they argue, the price of around one million is “very attractive” because of the prestige the money buys them.

With this analogy, it becomes clear why and how tenders protect the public interest against any individual interests. In this analogy, it is likely also clear that academic freedom does not and should not trump all other considerations. In this respect, I would consider the analogy very fitting and have always argued for such a balance of public and researcher interests: academic freedom does not automatically exempt academics from procurement rules.

Therefore, ten experts advocate a ban on all negotiations with publishers and, instead, advocate policies that ensure that all publication services for public academic institutions must be awarded by tender, analogous the the example set by Open Research Europe and analogous to how all other, non-digital infrastructure contracts are awarded.”

Who’s afraid of Green? Market forces and the Rights Retention Strategy | Plan S

“Publishers state that the version of record (publisher’s version or VoR) is the product that readers and authors prefer, want, and specially seek out. In fact, Springer Nature published a white paper describing their findings from their own survey on this very topic. If it is the case that authors and readers prefer the VoR, then authors (or their agents such as libraries) will pay for it. That is how the free market works. If a company provides a product or service people want, customers will pay for it. People will cancel if the service is not delivering what they need, is too expensive, or a competitor provides an alternative that’s better, cheaper, has more widgets, etc. 

So what’s the big deal? Why are major publishers trying to discredit repositories and the use of AAMs? What are they frightened of?

They should have nothing to worry about. They’ve even got years’ worth of external evidence in the form of Arxiv (hosting >2M articles), which, every year, disseminates thousands of physics and related subject preprints and AAMs very similar to the VoR. Journals continue to publish those same papers, despite content being freely available in Arxiv. If Springer Nature and other publishers believe their own statements, readers and authors will seek out the VoR. Repositories even help them to do this; one of the benefits of repositories is the free publicity they provide for publishers. Each discoverable record in a repository includes the DOI of the VoR for users to easily locate the VoR with a single click, and either access the full text immediately, or pay to access it (e.g. here and here). 

If an author wants to make an unformatted AAM version available, then so be it. Provided the VoR offers the features that customers want, then publishers have no cause for concern. If it doesn’t, then the publisher will have to rethink – but that’s how it should be, and how markets work. According to the publisher produced white paper cited above, there is nothing for publishers to worry about. As Peter Suber, arguably the father of the OA movement, stated, ‘There are no good reasons to put the thriving of incumbent toll-access journals and publishers ahead of the thriving of research itself’.

Perhaps it is true that services like Unsub and the SPARC log of journal big deal cancellations mean that ‘green’ OA is having an effect on subscriptions. If it is, then why? Could it possibly be because what is on offer is too expensive, rights are too restrictive, and the product is not what the customer wants in some way? This is what the competitive market entails, and any services that are losing out clearly need to re-evaluate and reconsider what they are offering. …

Publishers that talk about self-archiving as “The false promise of Green OA” are missing the point. Green OA isn’t promising anything – it is an expression of the right of authors and institutions to disseminate and use the research finding papers and other outputs they created, or were created with their affiliation, in a way that they choose. If supporting that right happens to result in a service that users prefer and choose to use in preference to a publisher’s VoR, then so be it. But publishers should not be so disingenuous to the authors that contribute content for the publisher’s use at no charge by trying to deny them the rights to disseminate their own work in the ways they choose. The content belongs to the author. 

It would appear that these publishers don’t want a normal market to operate. They are creating a monopoly (“the exclusive possession or control of the supply of or trade in a commodity or service”  

bjoern.brembs.blog » Small changes, big effects

“EU regulators long-since recognize in principle that academic publishers are monopolies, i.e., they are not substitutable, justifying the single-source exception granted to academic institutions for their negotiations with academic publishers (another such negotiation round just recently concluded in the UK). Openly contradicting this justification for the single source exemption, the EU Commission nevertheless classifies academic publishing as a market and, moreover, demonstrates with Open Research Europe, that public, competitive tenders for publishing services are possible. This now offers the opportunity for the first decision: we propose that now is the time for regulators to no longer allow academic institutions to buy their publishing services from academic publishers that do not compete with one another in such tenders. The consequences would be far-reaching, but the most immediate ones would be that the (mostly secret and NDA-protected) negotiations between institutions and publishers, which allowed prices and profits to skyrocket in the last decades, would now be a thing of the past. Another consequence is that the obvious contradiction between academic publishing as a set of recognized monopolies in procurement regulation, but as a regular market in anti-trust regulation would be resolved. After this decision, academic publishing would be an actual market that could be regulated by authorities in pretty much the same way as any other market, preventing future lock-ins and monopolies. Yet another consequence would be that competitive pricing would reduce the costs for these institutions dramatically, by nearly 90% in the long term, amounting to about US$10 billion annually world-wide….”

Creating a market to replace publisher monopolies | Plan S

an abbreviated version of a more detailed proposal available at https://doi.org/10.5281/zenodo.5526634

by Björn Brembs, Philippe Huneman, Felix Schönbrodt, Gustav Nilsonne, Toma Susi, Renke Siems, Pandelis Perakakis, Varvara Trachana, Lai Ma, & Sara Rodriguez-Cuadrado.

Replacing traditional journals with a more modern solution is not a new idea, but the lack of progress since the first calls more than 20 years ago has convinced an increasing number of experts that a disruptive break is now necessary. The list of problems that have been accumulating is long, but three stand out as the most severe:

Quality control by traditional journal peer review has often proven to be opaque, capricious, and insufficient for catching even overt errors, leading to what is now called a “replication crisis”;
An “affordability crisis” is the consequence of large international corporations that each own their separate monopoly on scholarly content and enjoy an exemption from procurement rules such that they can dictate conditions;
A lack of digital modernization has caused a further “functionality crisis”, where some of the most basic digital functionalities are missing for research objects.

The reason for three decades of inaction is a social dilemma, where every player – researchers, libraries or institutions – is at a disadvantage if they move (first), so all remain locked-in. Reminiscent of the big internet platforms, the corporate publishers exploit this situation by using their massive profits not only to resist and delay any research- and public-oriented reform, but to fund a reform of their own and on their own terms: The major publishing houses are tracking their academic users in order to, among other reasons, expand their monopolies beyond scholarly texts. Over the last decade, the four leading publishing houses have all acquired or developed a range of services aiming to develop vertical integration over the entire scientific process (Fig. 1). For any institution buying such a workflow package, the risk of vendor lock-in is very real: Without any standards, it becomes technically and financially nearly impossible to substitute a chosen service provider with another one.

Academic publishing – market or collectivization? | bjoern.brembs.blog

Last week’s podium on the commodification of open science entitled “If you are not paying for the product, you are the product?” was surprisingly unanimous on the need to radically modernize academic publishing and abolish the current publishing system relying mainly on corporate publishers with monopoly status. It appeared as if the present funders, librarians, scientists and other experts essentially only argued about how and when this replacement for corporate publishers should be brought abut, not if.

It was also unexpected that this was probably the first time I was not representing the most radical position on the panel. The proposals to remove usage rights from publicly funded research papers, or to ban for-profit publishers altogether, prompted the moderator, Jan-Martin Wiarda, to ask if these were calls for an expropriation of the publishers. Julia Reda was quick to point out that the goal was not to expropriate anybody, but that the accurate technical term for what she was proposing was “collectivization”.

[…]

Prioritizing academic publishers

“When the late Jon Tennant and I filed our formal complaint to the European Commission in 2018, in which we detailed how scholarly journal publishing was not a market but a collection of small monopolies, we had no idea that the EC was already well aware of that fact and saw nothing wrong with it. In fact, their reply at the time surprised us, when it indicated that the EC concurred with our description of scholarly journals being collections of monopolies, but saw levers for regulation/mitigation elsewhere.

Today, I have been privy to the informal brief written by a legal expert of the GFF mentioned above. It cites two prior EC instances from 2003 and 2015 where the EC had already acknowledged the lack of a genuine market due to the lack of substitutability (the reply to our complaint is thus just one in a long list of such documents acknowledging the lack of competition in scholarly publishing)….

The quote here is an example of how the EC is well aware of the conflicting interests between readers and libraries on the one hand (demand-side) and publishers (supply-side) on the other, while at the same time expressing a clear prioritization (“confirmed the relevance”) of the interests of the supply-side over the interests of the demand-side. The dysfunctionality of the current situation for readers and libraries is understood, acknowledged and dismissed by the EC as “not relevant” – very similar to the reply we received for our formal complaint. In this particular quote, a fig-leaf is offered by stating that the big publishers cover many scholarly fields, leading to each library having contracts with several publishers, giving the superficial impression that there would be several suppliers in a “supply-side” market. The sentence just prior, however, makes it clear that this is, in fact, not really a genuine market, but one that exists only on paper, solely for regulatory purposes….”