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10.1 Scholarly Publishing in Transition
Scholarly publishing used to be a quiet, respectable backwater of the much larger, and more volatile, publishing industry. Where many consumer publications rise each year and fail quickly, scientific journals seem to prosper over time, once they overcome the considerable entry barriers. Cross-platform searchability and other features of the Internet are ideal tools for improving the utility of scholarly journals. This characteristic has cast scholarly publishers on the leading edge of the publishing industry, and has forced them to explore both the technical and business aspects of online publishing. Many scholarly publications are managed by non-profit associations, or by relatively conservative commercial publishers, who have little experience in managing such a complex transition.
Besides the reader benefits, publishers are attracted to Internet publishing for a number of reasons. One key attraction is the promise of wider readership and recognition for the publication. Publishers see an opportunity for brand preservation and extension in this new medium which has rapidly become widely available. These opportunities for expanded readership and branding, of course, spell a possible business opportunity in selling subscriptions and advertising online. Some see new revenue possibilities that never existed in print, such as the chance for widespread pay-per-article, an extended economic life for older content, and e-commerce in conjunction with advertisers or other new partners. Finally, many publishers also view their online presence in a defensive mode: bringing the traditional printed work online may be necessary in order to maintain the interest of current readers and protect the revenue base that already exists in print.
The Internet is regarded as a 'disruptive' technology, one that changes the service norms and economics of publishing (and other industries) in unpredictable ways. Therefore, online publishing is seen as a threat. To understand the current milieu of scholarly publishing, it may be useful to consider how online publishing has changed four of the forces that act on publishers: competitors, suppliers, buyers, and the market environment.
The Internet reduces fundamentally the cost of publication distribution. Thus, it lowers barriers to entry, inviting many new players into the field, along with the traditional, known competitors. Start-ups that seek to exploit a new technology are generally more nimble than traditional players, partly because they have less existing revenue at risk, and tend to eschew ingrained ideas about the new business.
Furthermore, a new technology with uncertain parameters leaves incumbent competitors unsure of how to manage the new situation. As leading companies attempt different models for creating a viable business, they send confusing or unreadable signals into the market. Competitors do not know how to assess these moves, or how to respond to them.
Suppliers to the scholarly publishing industry are also undergoing realignment as the Internet comes into wide use. Key suppliers for scientific publishers are the researchers themselves, who submit papers describing their latest findings for review and publication. As authors find they have more outlets for their work and discover new ways to communicate findings to their colleagues, they are empowered in their dealings with publishers. Though they still seek the imprimatur of independent refereed journals, they have more leverage to demand services and concessions. Technology workers have become similarly empowered as publishers (and most other industries as well) increasingly depend on their capabilities. These influences will tend to increase costs as publishers must compete for the raw materials and resources of their business.
On the flip side, suppliers on the distribution side of publishing have lost ground. Postal services and other distribution outlets (such as international carriers) face significant threats if many publications ultimately choose to publish online only. But this phenomenon doesn't benefit publishers by bringing them cost savings unless they can entirely abandon the distribution chain. In the short run costs will, perversely, tend to rise. Since distribution costs are to some extent volume based, publishers may face rising delivery costs per unit as their volumes drop. The same problem applies to the printers of scholarly publications. Savings are only available to the publisher by abandoning the medium altogether. Reductions in print volume will only tend to increase costs per unit.
Demand is another force operating on publishers. Publishers are affected by both buyers and readers, who for scholarly journals are often not the same persons. They include individual subscribers and the libraries that support many scholarly publications. Consumers of information gain from the Internet by obtaining much better access to alternative information sources. As competition increases among information sources trying to bring value online, consumers' expectations will tend to increase for quality benefits and features from the publishers they support. Meanwhile, the sharing and copying of digitized information is far easier and less expensive for users than any previous copying method or device. This will tend to lower demand for subscriptions, licensing or pay-per-view services through which publishers may have expected to generate revenue. In addition, the interactivity enabled by chat groups and listservs gives consumers access to more accurate pricing and term information, which in turn makes them better negotiators for the services of publishers. Publishers will find that, with the easy access provided through convenient and inexpensive e-mail, their customer service costs will rise.
The general market environment for publishers is also undergoing transitions with unforeseeable consequences. Electronic distribution of information and the ability of users to duplicate and redistribute materials at very low cost hold unclear legal implications for copyright enforceability. In any case, assuming a constant level of enforcement, we should expect that lower copying costs will result in more copying, even if it is illegal. This would tend to suggest that publisher revenues are more vulnerable. Meanwhile, increased consumer awareness of privacy issues places pressures and restrictions on publishers' use of the data they gather about their readers, and has a dampening effect on marketing activities.
At the same time, some aspects of the market environment may be changing in favor of publishers. Some book publishers, for example the National Academy Press, are said to have seen an increase in sales as a result of making their content available for free on the Internet. This seemingly paradoxical result may be due to the general preference for reading things in print, combined with the wider resource location possibilities presented by the Internet. The availability of the products online for free may have served as an effective marketing tool. Where traditional marketing may have been too expensive or inaccessible to the small non-profit publisher, online the credibility of the publisher and the ability of the reader to `sample' the product by reading a chapter or two may have stimulated sales.
Might similar effects apply to scholarly periodicals? The remarkable usage figures of JSTOR articles reported by Guthrie (this volume) suggest that articles may enjoy a longer shelf-life by being digitized and made easily searchable online as part of a collection of refereed works. Nevertheless, it is not clear how or even whether increased usage of archived articles might lead to enhanced sales for the periodicals themselves.
Amidst downward pricing pressures from their buyers, publishers face increasing demands for sophisticated online services, which adds to cost. At the same time, it appears that a `centralization' of buyers is occurring. Even though a publisher may locate more readers online, it is less clear that these readers will become paying subscribers. Library services have, in effect, broken out of the library, as site-wide subscriptions bring the information to users' desktops. This is, of course, a good thing for the availability of information, but it does not necessarily lead to lower prices, since it may discourage personal subscriptions.
One reaction of publishers to all these influences and conflicting goals has been to develop a proliferation of access and pricing models in search of viable solutions to the business challenges they face. Next, I will examine some of the main access systems and pricing models in place among scholarly publishers, with an emphasis on the models in use by Science Online.