Sep
8
Anniversary Thoughts
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Happy 25th Birthday, HighWire!
Change always needs intermediation. The history of research and scholarship demonstrates this constantly. Practises that are at first born of initial necessity become the habitual style which has in turn to be accommodated when technologies change. Monks who trudged across Europe to update copies of the manuscripts of Copernicus in distant monasteries with their own observations were succeeded by scholars whose work would appear in the exciting new medium of print. Nicholas Hill, preparing his “Epicurean” of 1601, bringing Lucretius and his atomism into the seventeenth century scientific discussion, had his printer insert blank pages between text pages so that readers and friends like John Donne and Ben Jonson could add their annotations. Each technology needs facilitation and handmaidens. Fifty years after Hill come the Philosophical Transactions and the Scavans – the first science journals.
In 1995, year of Highwire’s foundation, we were all struggling with the inheritance of the Darpanet. Having been gifted the ability to interconnect research globally by the US Defense Dept, and christened it the Internet, we could think of nothing better to do than dump into it all the science recorded since 1660. We sought to communicate what had already been communicated, and in the rush of mid-decade enthusiasm few saw the problems. But there were scholars and scientists – and librarians – at Stamford who did, and have provided 25 years of services and hosting and solutions to get us through some difficult passages, and ensure that many smaller but highly valuable players could cope.
And the task is not yet done and the future of intermediation and facilitation could indeed be the future of publishing. Following Nicholas Hill in 1601 comes Dan Whaley today with his hypothes.is venture, excitingly interconnecting the footnotes, comments and annotations to enable a research thought to be followed more effectively. And after those heady days of digitalisation of the mid 1990s we have come into a wholly different “born digital” world. We use the inadequate expression “digital transformation” to describe what should, if done properly, end with a researcher-centric view of content. The research requirement to find exactly the information required means (as it has always meant) that natural language searching, concept based enquiry, semantic fingerprinting, effective ontologies and really top class metadata are far more important than the redundant formats – “book”, “article”, “journal” and the like – that we spend our lives discussing.
In 1995 my own company, Electronic Publishing Services (EPS), was ten years old, during which period we had been faced with nothing more challenging than commercialising dial-up databases, CD-ROM and Multimedia, said then to be the Future. We got our first internet strategy job in 1993, and as the with founders at Highwire we were working out a service business scenario. We, being no wiser, came up with the Theory of Musical Chairs. In this we postulated that the network effect was to force network participants to occupy the territory of the next player in the workflow newly connected by the network. Thus, we argued, authors would soon become (self) publishers; librarians would become super publishers and and hold the vital standards of content interoperability; publishers would evolve into maintenance engineers, tuning the tools which cross searched the distributed content held locally in research repositories, providing the software development and advances which would do much to create the “new” science in a collaborative world.
The message that publishers were to be recreated as software services and solutions businesses did not resonate with our publisher clients, who, as one, took to the conference podium of the world to proclaim that “Content is King”. We had to wait for populist politicians for slogans to match that in emptiness. It disguised the reality of a user- centred networked world for a time, and what a boom time it was for scholarly communications publishers. But now that the boom is over, OA and Plan S all conspire in the direction of controlling margins, the true shape of a network future is beginning to emerge.
So what will the world look like in scholarly communications at Highwire’s fiftieth? Hating to waste a theory, I am clinging to Musical Chairs. At current rates of research output, we have already reached the point where the idea of a researcher reading all the current material published in their sector is becoming absurd. Mapping what is happening, knowing which peers are doing what, is problematical for some. Knowing what results another team are achieving now (morressier.com) may be more important than reviewing their published article in two years time. Searching on methodologies across multisourced content, or cross referencing citations could be critical. Since all content cannot be in one place, federated searching and the use of text and data mining across all available references becomes an imperative.
So we emerge into the world of AI. In fact of course it has been with us all along, changing its name from Expert systems to neural networks as a way of disguising the fact that it didn’t deliver to our wildest expectations. Now that it is beginning to deliver, it can shoulder many duties for scholarly research. All that peer review reference checking and concept analysis (ScholarOne and UNSILO), for example. But these are the foothills. It is when AI becomes the way researchers read other people’s research that things really get interesting. Released from the time-consuming literature, researchers may be free to research and self-publish. But acts of self-publishing may simply be releasing formatted work into the network, or by opening access to the network for a digital lab notebook. Imagine Jupyter notebooks of the future where colleagues and collaborators could see and annotate findings, or test reproduceability from the data available on board. As we move from Open Access to Open Science, overt acts of “publishing” may become as rare as overt acts of textual reading. The minds of librarians (Hypergraph from Liberate Science – libscie.org) already lean in this direction.
Some major publishers anticipate these developments by acquiring software and services companies. Others think that a world born in 1660 will ever change or decline. Whoever is right, all these worlds will need support and services. Have a happy next 25 years, Highwire!
Aug
24
At the Consolidation Station
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These are strange twilight times in M&A in scholarly communications. Everything should be happening. Not very much seems to be happening. So we turn to the traditional reasons. Is there a shortage of investment in the market? Private equity signals that this is not so. Are strategic buyers so dominant that that they are creating price levels at which PE cannot operate? No evidence of that either. Are margins so diminished that buyers are doubtful about mid term growth? No evidence of that, though we all justly fear the future in terms of library budgets and research spending. Are research article submissions slowing? On the contrary, since the start of the year and the pandemic, they have hit record highs. Have preprints ruined the market, as one commentator loudly claims? No evidence for that either. So why the apparent hesitations of the last nine months?
A reasonable person might reply that pandemics and recessions can cause investors to hit the pause button. This is both reasonable and true were it not demonstrable that downturns and disasters all diminish prices, and for some classes of investors, particularly private equity, having capital to hand creates a pressure to put it to work. And PE companies are still doing exits and raising funds. So let’s look at what scholarly communications offers as an investment opportunity and see if lack of attraction there is delaying long forecast consolidations.
There are four clear investment pathways in the sector: subscription journals, OA, scholarly societies and workflow tools. Given that the biggest players in the sector are now so big that further acquisitions may attract regulatory and anti- trust investigation, there is an inhibition around growth in traditional journal purchases, but how would that apply in Open Access terms? Elsevier are widely said to be the largest Open Access publisher in the market – could they be accused of unfair market dominance if they added one of the pure play OA publishers of scale currently tipped as being for sale? Certainly there would be delay and investigation, but interesting arguments could be made that OA publishing did not exert the same market impact as the huge Big Deal dominance of the major subscription players in previous times.
But think of it also from the other direction. What is the dominance exerted by transformative “read and publish” agreements? A publisher who has signed up 75% of the research institutions in a particular sector might be thought to be exerting a market pressure as dominant as one who had creamed off 60% of the traditional paid for subscription allocations in the same institutions? Or perhaps more dominant? We have yet to let the lawyers into this argument but in times to come they will enjoy it!
So one line of investment is clearly to buy a big OA specialist, merge it with another one and challenge the market leaders. But would they be challenged? What is the intrinsic value of an OA portfolio. If it’s brand, then the evidence is that it can be grown quickly. If it is editors with reputation, editorial boards and market relevance then these are subject to market forces and very replicable. There is of course no value in copyrights since these rest with authors. There will be value in the deals that have been made that fix in place for a period of years, now typically three, the possible, but not usually exclusive flow of submissions. And thus there will be valuations of the cash flow from APCs. This in turn may be slightly chilling market appetites, given the downward pressure on APCs. Yet PLoS have shown that an inclusive publishing contract model can be made to work – will it work for commercial OA as well as not for profit OA?
There will of course be traditional publishing investment and consolidation, and this will mostly revolve around what we might call Endowment investment. It has happened in the recent past in the sports sector (the English Rugby Union and CVC is a case in point) and it could well apply to PE players looking at scholarly societies, beset by the risk to their underlying income in going OA, and seeking to create endowment income by inviting third party investment in their journals. Many societies, large and small, have debated this one. The IET in the UK reduced the risk of the transfer to OA by a joint venture with Wiley. There will be a great variety of solutions to a problem whose resolution depends on the society’s current assets and its future running costs.
Other investors will take the view that investing in any form of journal publishing is yesterday’s business. Now is the age of services and solutions. Real growth, though unproven margins, lie in analytics and tools and scholarly workflow. Elsevier buying SciBite today is interesting, and typical of the relatively small scale of these deals. Others dream of investing in some science park AI and injecting it into the support framework to create must have acquisitions that the big players will need as margins in traditional journal publishing diminish and the big players are forced to diversify across the value chain.
And what about those big players now? Springer Nature May be thought an unlikely investor while its own investment relationship with BC Partners remains unresolved but it’s majority shareholder, Holzbrinck, has an interesting asset in Digital Science. How this portfolio of future facing tools and support services is played in the market is a subject of perennial speculation. Other hardy annuals include whether Wiley do eventually decide to split their education from their journals holdings, whether Sage maintains its resolve to go not for profit, and whether Informa will respond to pressure elsewhere and put T&F into play. Add the clear departure of Clarivate on an IP trajectory, which some argue means that Web of Science could be available, and we see what a range of investment opportunities this market exhibits. So what are we waiting for?
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