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Semantic Wave Hits STM Publishing, Part 1: Current Cash Cows

By   /  March 18, 2010  /  No Comments

WWW.jpgWhen Sir Tim Berners-Lee invented the protocols that became the Web in 1991, he was thinking mainly about scientific information. He would have been surprised to learn that in 2010, music, dating and shopping had been completely changed but that scientific publishing had NOT been fundamentally disrupted. The disruption of STM (Scientific, Technical, Medical) publishing has been the most forecasted event that never happened. In a further irony, the peer review process at the heart of STM publishing became the inspiration for Google Page Rank. That changed the web and made $ billions but left STM publishing mostly unaffected.

So STM Publishing is currently only in Act 2 of the Creative Destruction 7 Act Play. The old guard players are firmly in place and the few innovators are like straws blowing in the wind of change. The debate about when we will move to the later acts, when disruptive change will finally happen, rages within the STM business. Our view is that we ARE on the cusp of disruptive change and that it will be brought on by the implementation of social networking and semantic technology.

Big Picture. Why STM Matters To All Of Us

A few people have occasionally asked; “what is the purpose of the Internet”. These serious-minded folk think that the greatest technical gift from the 20th century to the 12st century should be used for something more important than shopping, entertainment, dating and trading stocks. Surely the Internet will speed up the way scientists find cures for life-threatening diseases or ways to end global hunger and global warming?

The outcome of this creative destruction play matters to billions of people more than any of the other plays.

STM Publishing is a big business. On a narrow definition, journals only, it is about $8 billion. Including databases, it is around $12 billion.

That is big, right? Well in the context of publishing, yes. But if you look at that $12 billion in the context of the world of science that it impacts, it looks different.

There are about 10 million scientists globally. Let us say that each costs, fully loaded (including labs, admin and other expenses) about $100,000 a year each. That is $1,000,000,000,000 a year. To put it another way, that is $1,000 billion or $1 trillion. A picture shows this in relation to the $12 billion of STM publishing:

stm science chart.png

That is just the cost of science. Trying to calculate the second order impact, the value of science, is almost impossible. What is the impact on global GDP of better water filtration, or a cure for malaria or fuel cells that can power cars and homes economically?

The Cash Cow Is Still Delivering

One of the best blogs covering this market is Scholarly Kitchen and this post by Michael Clarke is excellent. It describes how people in the market have been surprised at the lack of disruption to date and why that may not have happened yet.

The cost of Journals is going UP. This is a problem for academic and research libraries. This has been termed the “serials crisis.” Here is how Wikipedia introduces the subject:

“The term serials crisis has become a common shorthand to describe the chronic subscription cost increases of many scholarly journals. The prices of these institutional or library subscriptions have been rising much faster than the Consumer Price Index for several decades, while the funds available to the libraries have remained static or have declined in real terms. As a result, academic and research libraries have regularly canceled serial subscriptions to accommodate price increases of the remaining current subscriptions.”

That would be the envy of publishers in any other market. It does not sound like a market being disrupted by the Internet. It sounds more like a market with a monopoly or a duopoly.

This looks like a market that is in Act 2. We see the innovators, the straws in the wind of change. But the incumbents from a few decades ago are still the incumbents today. Companies like Wiley, McGraw-Hill, Elsevier, Wolters Kluwer and Springer are in good financial health. These companies are not pure play STM. But one can see which divisions are doing well. Reed Elsevier is selling their Reed Business Information division. That is in B2B Media, which is in Act 5. But their STM publishing units are prized.

To understand how this can be, we need to look at the current publishing processes.

The 5 Key Elements In The Current Publishing Process

The average cost of publishing an article in a subscription-based journal with print and electronic editions was estimated at $3800. Don’t assume that eliminating print will reduce that dramatically. What the business calls “first copy costs” account for about 80% of that. That is not the cost of the research itself. That is in a different budget (the $1 trillion or so spent on science).

Here are the 5 key elements in the STM the process and the current web technology analog:

1. Dissemination. This is what used to be done in print. 96% are already available electronically and print is only 20% of the cost. So even assuming all print is eliminated, this is not where the inertia lies. The Internet has already solved this problem.

2. Registration. This is the process that defines who can claim credit for the discovery. This problem has also been solved. It is a basic registry and time stamp process. There are working examples in STM already.

3. Validation. This is the peer review process. Publishers have already implemented online workflow systems. That has chipped away at costs but not taken a disruptive axe to those costs. An outsider may say that all that is needed is some social networking technology to automate this entirely. But science is not a democracy. A PHD and recognized authority in the subject carries more weight than your average Joe/Jane. But that is trivial technically. The system will need registered/verified users. That has already been cracked by professional networking sites such as Sermo (for Doctors). One can imagine a transparent system where different weight is given to different scientists based on reputation. This can be politically messy and that interacts with the last issue – Designation.

4. Filtration. This basically is the process of search and discovery. This is being solved slowly. Basically Google and other commercial search engines are not good enough for science. But we are already seeing specialist search engines. And this is not a hold-up. Although these new science search engines are not perfect, they are orders of magnitude better than searching through a pile of print journals! Search is not the only tool. Scientists can also use RSS readers, Twitter Lists and LinkedIn Groups. Or we may see social search/content recommendation services as a bye-product of an online peer review/validation process.

5 Designation. This is the process by which a researcher gets credit for an article and how this effects their standing in the academic institution and how they get tenure. This may be the main impediment to disruptive change. The leading journals carry more weight. We will look at this in the next section.

Why Has Disruption Not Happened Yet?

The 5th step, Designation, is the hold up. This is a tragedy of the commons issue. Researchers want everybody else to publish openly. But when it comes to their own articles, they still favor the traditional route, as this is what has the best impact on their career and academic standing.

Scientific Journals have a power law distribution, like a network effect. The best journals attract the best articles, which have the biggest impact on academic reputation and so on.

But we see the same power law distribution in social networks. Scientists won’t be impressed by the number of Twitter followers. But they might be impressed by a numerical grading by peers in an transparent online system.

Scholarly Societies: Force For Change Or Inertia?

According to OpenOasis.org:

“scholarly societies are small publishers with one, two or a few journals in their portfolio. Originally the bedrock of scholarly publishing, for the last half-century society publishers have found it difficult to compete against the increasingly-powerful commercial publishers for a share of libraries’ shrinking budgets. At the same time, societies have found their publishing operations have provided a useful – sometimes essential – revenue stream.”

According to one source, scholarly societies

“split the subscription fees with the STM publishers. So they are addicted to
the revenue stream of that $10B market too, and are thus loathe to go
to an open access model.”

That makes them a force for inertia. But this may be changing fast, according to OpenAsis.org:

“Many societies have already travelled this road already. The Suber & Sutton study carried out in 2007 found 428 societies active in Open Access publishing. Of these, Suber & Sutton found 425 societies publishing 450 fully Open Access journals and 21 societies publishing 73 ‘hybrid’ Open Access journals (containing both Open Access and Toll Access articles).”

What Will Trigger Disruptive Change?

We will see incremental change based on normal advances in technology and market pressure in 3 areas:

1 Scientific search and discovery tools will get better and get used more. This will gradually drive more scientists to publish this way.

2. In some disciplines, recognition with an open access database/system may start to have a serious impact on academic reputation (“designation”). This will have a gradual impact on other disciplines. This might be already happening in Physics.

3.Funding constraints may force more libraries to drop print and demand electronic only. They will then demand much, much lower prices, which can only be met from a fundamentally different approach.

At some point these 3 forces of change may feed off each other and trigger a “phase transition” (to use a concept that thermodynamic scientists and engineers are familiar with; tipping point is the marketing version of the same concept).

But it is likely that an exogenous force will drive disruptive change. The institutions that fund research may demand open access. In some cases they already are. For example, the National Institute of Health Public Access Policy:

“The NIH Public Access Policy ensures that the public has access to the published results of NIH funded research. It requires scientists to submit final peer-reviewed journal manuscripts that arise from NIH funds to the digital archive PubMed Central upon acceptance for publication. To help advance science and improve human health, the Policy requires that these papers are accessible to the public on PubMed Central no later than 12 months after publication.”

This is also happening in the UK and probably other countries.

This gets back to the $12 billion (STM publishing) versus $1 trillion (cost of science) big picture. This is not like book, software or music publishing where the authors have to reinvent themselves to deal with digital economics. Scientific researchers will still get paid as they do now. All they want is for their output to be reviewed by peers, discovered and recognized.

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