Are scholarly publishers technology companies?
Thu Sep 5, 2019
There is tension in this question that gets to the heart of where a publisher should be putting its resources, and perhaps more importantly what the reasons are behind those investment decisions.
The side of the argument that says they are not technology companies might say that at the heart of what publishers do is content, and so they are content and service companies. Invest then in acquisition, in reach, in marketing, in branding, in distribution and in making the sales process as cost effective asa possible.
On the other side one can make the argument that the materiality of content is digital - online platforms, PDFs, COUNTER stats, appropriate indexing and discovery, publishing systems that can support fan-out model where we take many formats as input and distribute them back out in enhanced formats.
I’ve just read the following blog post Netflix is not a tech company — Benedict Evans. I think it’s critical and it resonated strongly with me. Here are some key quotes
Netflix is a TV company, not a technology company:
… Netflix has used technology as a crowbar to build a new TV business. Everything about how it executed that technology has to be good. The apps are good, the streaming and compression are good, the UI is good, the recommendation engine is good, and the customer service and experience are good. Unlike American cable subscribers, Netflix subscribers are generally pretty happy with the tech. The tech has to be good - but, it’s still all about the TV.
You have to be good at technology, but it’s not enough:
It’s challenging to call things like user experience or indeed software commodities, especially when talking to people who work in software. These are certainly not easythings to do, and when incumbents from other industries try to build them (‘we can just hire some techies!’) they often mess them up. But that doesn’t mean they‘re defensible, and it doesn’t mean they’re what determines success.
You have to understand what questions matter to your area of business
Hulu is smaller than Netflix because of TV questions, not tech questions … this framing is important - ‘what kind of questions matter for this business? … The more that we see new companies using software to create new businesses in industries outside of technology, the more generally this applies. … executing this properly is not the same as defensibility. Selling online per se - even selling online really well - is fundamentally a commodity. Hence, one asks whether there is something unique and defensible about this company’s online channel
So what conclusions should be drawn for the scholarly publishing industry?
We are indeed not a technology industry, but nonetheless we need to excel at a technology. There are areas of the experience where we have fallen down..
There are some questions that I think will always be pertinent to our audience, and in each of these areas technology done well can help. I think those questions are:
- How quickly can a research article be published?
- Can reviews for the article be fair and responsive?
- Can the article reach the audience that needs it?
- Can the authors get credit for this item (and by this we usually mean citations) quickly?
I think these are the ways to best serve the ecosystem, but from the perspective of the business there are other questions that support these. Whereas the Netflix model is to spend $15BN on buying new content to attract customers, in scholarly publishing we don’t think about “acquiring content” through purchase, but we do think about developing relationships with communities, in the expectation that those communities will chose to publish their work in the journals that we publish. From a defensibility perspective although the general market of journals is an open one, within a specific research discipline there are usually only a small number of journals that matter to that community.
The operational aspects of running a journal are the entry ticket to having a successful business, things like:
- How to cap the cost of producing an article, while increasing the ability of that process to support the questions I laid out above.
- How to scale the costs of publishing infrastructure at a rate lower than the growth of content on the infrastructure.
- How to ensure contracts for publishing have renewals built in to support the customers need to forecast their budgets, while supporting growth of the business.
All of these kinds of questions though, are operational, and not related to defensibility.
What then are the questions that should drive strategy, especially in an environment where national pay to publish deals look like the smart money for the future of economic flows in our industry?
Answers on a postcard please!