Sapping the dikes
Financial analyst Claudio Aspesi, who has figured in these pixels before, has issued new guidance on Elsevier’s stock price, contradicting his 2011 assertions that open access was about to get Elsevier in deep trouble. As always with Aspesi, it is cogent, blunt, ox-goring analysis. The Loon admires smart, talented ox-gorers like Aspesi. Go read the guidance; the Loon will be here when you get back.
What the Loon thinks happened to Aspesi’s thinking mirrors the Loon’s own opinion development long ago, as well as that of many open-access advocates and ex-advocates she has known. To a certain sort of idealist and systems thinker, OA is all but irresistible: it reduces friction! it spreads knowledge! it increases research impact! it ultimately wrings cost out of the system! Our delight with it leads us to consider it an inevitability, and not only that, but an immediate inevitability.
Then we find out it’s a lot harder and slower than it looks at first, entrenched interests being what they are, and we dive into disillusionment. Some of us swim back out; some don’t.
Cross this with the enforced short-term outlook of financial analysis generally, and Aspesi’s turnaround makes all the sense in the world. Open access has been a lengthy struggle, with lurching, unpredictable, one-step-forward-two-steps-back progress. The idea that it would topple the mighty Elsevier by 2015 or so was—meaning Aspesi no disrespect whatever—fairly unrealistic at best, even though his assessment of the situation at the time was essentially accurate. (Next up in the timing-prediction lottery is IUPUI’s David W. Lewis, incidentally; see slides 72-76.) Does the Loon have any trouble believing Aspesi’s current assertion that Elsevier will survive the next three years also? None whatever. She thinks Aspesi is quite correct.
Does that mean the Loon thinks open access is hopeless? Far from it. Herewith, a few additional considerations.
One thing Aspesi’s analysis does not do that it arguably should is compare library budgets against some kind of larger benchmark—inflation, higher-ed budgets generally, something. The ideal comparison, to the Loon at least, would be big-pig publisher income from journal divisions. Whatever benchmark is chosen would, the Loon believes, make a couple of phenomena quite clear: library budgets are not increasing faster than inflation, and especially not faster than journal-price and Big Deal inflation. Aspesi’s analysis suggests libraries are regaining ground, but this is not the story the Loon hears from her librarian friends—and she believes them over Aspesi.
It doesn’t help that entire new categories of materials are also vying for library collection dollars. Ebooks, datasets, online multimedia… even subscriptions to reference/training sites such as Lynda.com sometimes come from library budgets. The couch cushions have no more money. (The Loon is consciously excluding OER spending here, as she seriously doubts it is coming from collections budgets presently. It may in future, however.) If Aspesi is very unlucky indeed, he will have predicted the continuation of Big Deals just as the very last fingers leave the dike protecting those deals from waves of cancellations—the Loon is not exactly predicting this, as she hasn’t sufficient data or even suggestive anecdata, but it would not shock her either. The dike has been slowly sapped for years and not rebuilt. At some point it must fail.
Do libraries want the dike to fail? No; Aspesi is quite right that many would prefer to be the chuckleheaded lemmings Aspesi portrays them as if that keeps the library-as-wallet role intact. Will libraries get their OA story straight any time soon? No. The longstanding immune response that isolates and destroys a good many institutional-repository managers and scholarly-communication librarians has not flagged in the slightest. Will faculty support their libraries in getting their OA story straight? Of course not, pig-ignorant entitled louts that most of them are. All this is naturally bullish for Elsevier.
Elsevier’s, being Dutch and the biggest pig and all, will likely be one of the last dikes standing, which also bolsters Aspesi’s argument. Bully for Elsevier. Not such a grand vision for the Big Deal generally, however.
As for the OA movement’s internal divisions and messaging incoherence, the Loon has little to add; Aspesi is essentially correct. She is less inclined than Aspesi to be annoyed by it, however. OA has always been thus, partly because it is opportunistic, and opportunity arrives in differing guises and must be seized in different ways at different times and in different places. The Loon is not convinced that a single strategy or message would have fared better; indeed, she thinks OA would not be nearly as far along as it is without its diversity of stakeholders and approaches. Aspesi is far from alone in disagreeing, however, and truthfully the Loon isn’t much exercised either way.
The same day the Loon read Aspesi’s report, she also read Roger Schonfeld’s calm dissection of return-on-investment in library-based discovery systems. A paragraph late in the report (pp. 10–11) aligned with Aspesi’s commentary:
In a different discovery use case, scholarly current awareness in one’s field, the search box has never been the right interface even if a large index could prove to be quite valuable… Little effort has been made to improve the fragmented eTOC alerts that seem to be the best publishers can offer, for example hosting the peer discovery experience in an online social networked space or bringing book reviews out of their confines in journals. But new services that offer and in some cases combine social discovery, article management, and professional profile, are addressing these gaps, as are services like Google Scholar’s My Updates.
In the Loon’s mind, this is a fair summation of a phenomenon sapping the other side of the publisher dike, the reputation-economy side, the prestige side. (The Loon, as usual, is hardly the first to notice or articulate this; nonetheless.) As the importance of the journal-as-branded-container wanes for current-awareness uses—and the Loon entirely agrees with Schonfeld that this is happening—a redistribution of readership, and eventually the citations dependent on it and the all-important bibliometric measures dependent on those, is the odds-on result. Established journals and toll-access journals will not be winners.
This will not be a fast process, not least because current awareness is probably the most set-in-stone process of all information-seeking processes. (The Loon still knows scholars and librarians who rely exclusively, or nearly, on new print journals. She thinks they miss quite a lot, mind! But they won’t be moved.) The Loon cannot easily imagine a way to reverse it, however. Do chime in via the comments if you disagree.
Aspesi was not wrong in 2011; he just compressed the time scale much too hard. Aspesi is not wrong in 2014; Elsevier will survive to 2017 and probably beyond. Still and all, the Loon believes that the dikes will fail. She does not know when exactly, and is mostly content to wait.
I’ve also been thinking about the connections between trust and authority, on the one hand, and current awareness, on the other. Do you think an attention to these issues, and the likelihood for it to upend the value of titles vs. platforms, helps to explain the investments being made by some of the major science publishers in social discovery, PDF management, online profile, etc?
Certainly. A walled garden producing mine-able user data seems a reasonable successor to the Big Deal. Amazon bought Goodreads for not-dissimilar reasons, and the Terms of Service for JSTOR’s independent-scholar offering certainly demonstrates an awareness of the potential value of user data. (JSTOR, as usual, is “the good guys” here; imagine what the bad guys are salivating over.)
The Loon is keeping one beady red eye on the possibility of using faux recommender systems in walled gardens to heighten the walls. (Imagine Google’s My Updates slanted toward a specific publisher.) Done adroitly, few would notice, and the effect on readership… well, the Loon doesn’t know, because she doesn’t have a good read on whether recommenders have made much headway against other current-awareness methods. It does, however, seem worth a try at least, if one were a publisher with more green eyeshades than professional ethics.
I would like just to clarify a few themes touched in this comment, which I find very well argued.
1) I strongly agree with the statement “One thing Aspesi’s analysis does not do that it arguably should is compare library budgets against some kind of larger benchmark—inflation, higher-ed budgets generally, something. The ideal comparison, to the Loon at least, would be big-pig publisher income from journal divisions. Whatever benchmark is chosen would, the Loon believes, make a couple of phenomena quite clear: library budgets are not increasing faster than inflation, and especially not faster than journal-price and Big Deal inflation. Aspesi’s analysis suggests libraries are regaining ground, but this is not the story the Loon hears from her librarian friends—and she believes them over Aspesi”. I have pointed out in the past that library budgets – even before 2008 – did not keep pace with the rise in publishers’ revenues (and, in fact, this was one of the reasons why I turned pessimistic on the outlook for Elsevier in March 2011). I believe he divergence between publisher expectations and library budgets has led librarians to continue spending a larger share of their budgets on serials, and the analysis of ARL data which I cite in the latest document supports this conclusion. In addition, the publishers seem to have found a new source of revenues in the form of APCs, and they are using it to fill whatever gap exists between library resources and their objectives. Of course, it is impossible to raise revenues from libraries faster than their budgets ad infinitum, and a celing will be hit, but a) this increasingly looks like a problem for the next generations of executives, librarians and investors b) private and public funding of APCs in a hybrid model may fill the gap anyway.
2) Projecting implications in 2015 was meant to model a theoretical outcome, rather than predicting a date for completing the transition to OA. Predicting the actual timing is always risky, and in fact I wrote in one of the previous documents (in September 2012) “All in all, it is not inconceivable, however, that by the end of the decade and perhaps as soon as in the next four years most leading subscription publishers will be forced to adopt an OA model because one to two thirds of their articles will be covered by an OA policy, making subscriptions virtually irrelevant” So, at the time, I thought this could happen between 2016 and 2020. Just to be clear, I am not trying to argue I was rigth: I was wrong (for a number of reasons) in predicting a decline in revenues for Elsevier, and I have no problem acknowledging this.
Thank you
Thank you very much for your clarifications, Mr. Aspesi. Yours is a tricky business, and nothing the Loon said is meant to diminish your work.
I still haven’t figured out how to navigate the current middle ground of libraries paying OA fees for faculty authors and also paying those same publishers for journal subscriptions. Are we simply shifting what we call those payments from “subscriptions” to “fees”? Will the future of publishing costs be on the budgets of libraries at institutions with actively publishing faculty?