Influences of Changes in Technology on Publishing Business Models

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Influences of Changes in Technology on Publishing
Business Models

• Richard W. Newman
• Council of Science Editors
• May 21, 2007

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Being on a Panel with Kent

• He will have an excellent presentation, of course
• He will use the latest gizmo
• Gizmo might deliver portion of his talk
• Am surprised hes here today
• Expected his avatar from Second Life
• Gizmos apparently a long-time interest of Kents

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My Presentation

• No gizmos
• No avatar (though I have one and it has great
  hair)
• Important topic
• Publishers and editors could be jeopardizing the
  future because of their actions today

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Presentation Outline

• Evolution of scholarly publishing business model
  due to
• technology
• technology-driven changes in library/institutional
  requirements
• Dangers of business as usual
• Recommendations for editors and publishers

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Old Business Model(content producers
perspective)

• Produce product (book, journal) incurring
• editorial costs
• production costs
• sales, marketing, distribution costs
• Recognize revenue
• upon sale (book)
• over life of subscription
• Match revenue and expense (per GAAP)

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Old New Business Model(content producers
perspective)

• Produce product (book, journal) incurring
• editorial costs
• production costs
• sales, marketing, distribution costs
• Recognize revenue
• upon sale (book)
• over life of subscription
• Match revenue and expense (per GAAP)
• Expenses continue after revenues

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Old Business Model(content purchasers
perspective)

• Purchase product
• Spend to store/maintain it
• binding with index
• space in stacks
• HVAC
• dusting
• Assume risk of theft, destruction

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Old New Business Model(content purchasers
perspective)

• Purchase License product
• Spend to store/maintain it
• binding with index
• space in stacks
• HVAC
• dusting
• Assume risk of theft, destruction

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Old New Business Model(content purchasers
perspective)

• Purchase License product
• Pay for current subscription (or not)
• Insist on perpetual access to previously
  licensed content (best of both worlds)
• Require publisher to have secure backup plans

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Additional Old/New Contrasts

• Old model
• library required acid-free paper to ensure
  long-term access to paper
• libraries formally (RLG Conspectus) or informally
  divided preservation responsibility
• New model
• more than mere backup is required
• technology update mechanisms needed (format
  migration)

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Format Migration?

• Imagine a 1995 journal issue with todays typical
  electronic supplements
• supplementary text WordPerfect file
• spreadsheet Lotus 1-2-3 file
• presentation software Freelance Graphics
• database Lotus Magellan
• modeling Improv
• How would you read the supplementary material
  today?

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The Online Preservation Obligation

• Applies to the entire journal, including online
  supplements
• Format migration (upgrading old technology to
  new) is now a clear obligation for someone
• Preservation is a perpetual obligation,
  increasingly by contract
• Perpetual access is forever
• Forever is a long time (messes up all ROI
  calculations)

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Worst-Case Scenario

• Significant erosion of subscription revenue
• Libraries entitled to perpetual access by
  contract
• Backfile license was one-time fee
• Format migration required for significant amount
  of content
• Raise current subscription price, thus driving
  away more subscribers?

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Fiscal Alternatives for Sanity

• Build future costs into subscription price (use
  as justification for price increase)
• might not help
• probably recognized as current year revenue
• Consider, instead
• perpetual access fee ( of subscription price)
• maintenance fee (annual?) for backfiles
• online advertising

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Role of Online Advertising

• Revenue with little cost
• no increase in editorial or production cost
• modest expense for selling ads, ad serving,
  providing statistics
• Revenue relates to old as well as new content
• in contrast with display advertising
• ceased publication journals still contribute
• Back-content online ad revenue most likely for
  journals with ads on article pages

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What Should Editors and Publishers Do?

• Be prescriptive in specifying format options for
  article supplements
• ask authors to adhere to prevailing technology
  standards, which are
• most likely to provide backward compatibility
• most likely to be included in bulk migration
  initiatives
• embrace standards movements (NLM interested in
  specifying naming and format standards)

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What Should Editors and Publishers Do?

• Ensure continuing revenue stream to cover costs
  of perpetual access
• avoid one-time fee for backfile purchase
• consider identifying portion of online
  subscription fee for perpetual access (fee
  continues if non-renew)
• Support preservation efforts such as CLOCKSS and
  Portico
• CLOCKSS resembles old, proven approach library
  community assumes preservation responsibility

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Presentation Outline

• Evolution of scholarly publishing business model
  due to
• technology
• technology-driven changes in library/institutional
  requirements
• Dangers of business as usual
• Recommendations for editors and publishers

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Ive Done All That. Will Head Back to My Room
and Listen to Music
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Ive Done All That. Will Head Back to My Room
and Listen to Music
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• Richard W. Newman
• Director, Journal Sales and Online Business
• American Medical Association
• 1 [phone]
• richard.newman_at_ama-assn.org