When in July 2012 Research Councils UK (RCUK) announced its new open access (OA) policy it attracted considerable criticism.
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Initially this criticism was directed at RCUK’s stated preference for gold OA, which universities feared would have significant cost implications for them. In response, RCUK offered to provide additional funding to pay for gold OA, and agreed that green OA can be used instead of gold (although RCUK continues to stress that it “prefers” gold).
At the same time, however, the funder doubled the permissible embargo period for green OA to 12 months for STM journals and 24 months for HSS journals. This sparked a second round of criticism, with OA advocates complaining that RCUK had succumbed to publisher lobbying. The lengthened embargoes, they argued, would encourage those publishers without an embargo to introduce one, and those who already had an embargo to lengthen it.
There was logic in the criticism, since one rational response to the adjusted RCUK policy that profit-hungry publishers would be likely to make would be to seek to dissuade authors from embracing green OA (by imposing a long embargo before papers could be made freely available), while encouraging them to pick up the money RCUK had put on the table and pay to publish their papers gold OA instead (which would provide publishers with additional revenues).
It was therefore no great surprise when, in April 2013, Emerald Group Publishing — which until then had not had a green embargo — introduced one. Nor was it a surprise that it settled on the maximum permitted period allowed by RCUK of 24 months.
It was likewise no surprise that Emerald’s move also attracted criticism, not just from OA advocates but (in May of that year) from members of the House of Commons Business, Innovation and Skills (BIS) Committee, which was at the time conducting an inquiry into open access.
When taking evidence from the then Minister of State for Universities and Science David Willetts, for instance, the MP for Northampton South Brian Binley said “We have received recent reports of a major British publisher revising its open access policy to require embargoes of 24 months, where previously it had required immediate unembargoed deposit in a repository.” Binley went on to ask if Willetts could therefore please have someone contact the publisher and investigate the matter.
At the time I also contacted Emerald. I wanted to know the precise details of its new policy and to establish who would be impacted by it. This proved a little difficult, but it turned out that Emerald had introduced a “deposit without embargo if you wish, but not if you must” policy — an approach pioneered by Elsevier in 2011, but which it recently abandoned.
While the wording of the Emerald policy may have changed a little since it was introduced, at the time of writing it appeared to be the same in substance: authors are told that they can post the pre-print or post-print version of any article they have submitted to an Emerald journal onto their personal website or institutional repository “with no payment or embargo period” — unless the author is subject to an OA mandate, in which case a 24 month embargo applies.
ZEN = “Zero Embargo Now”
Embargoes have been contentious for as long as researchers have been self-archiving their papers on the Web. Publishers have always maintained that green OA threatens their revenues. Their claim is that libraries will inevitably cancel the subscription of any journal whose contents are freely available elsewhere. As Elsevier’s Alicia Wise put it recently, “an appropriate amount of time is needed for journals to deliver value to subscribing customers before the manuscript becomes available for free. Libraries understandably will not subscribe if the content is immediately available for free.”
Open access advocates refute this, arguing that there is no evidence to suggest that embargoes have a negative impact on journal subscriptions. Consequently, they say, there is no need to embargo self-archiving. Speaking at a conference celebrating the tenth anniversary of the Berlin Declaration on Open Access in 2013, therefore, Glyn Moody called for “the ZEN approach” to open access — as in “Zero Embargo Now”.
Given this background, I was intrigued by a recent news item on Library Journal’s infoDOCKET reporting that Emerald has decided to undertake what it calls a Zero Embargo trial.
The trial, which will involve 21 Library and Information Science and Information and Knowledge Management journals, will allow researchers submitting to these journals (even if the author is subject to an OA mandate) to deposit the post-print versions of their articles “into their respective institutional repository immediately upon official publication, rather than after Emerald’s 24 month embargo period for mandated articles”.
It is an interesting development. But what impact is it likely to have? That we do not know, not least because — somewhat ironically given that they have historically been some of the most vociferous advocates for OA — librarians have not been good at walking the talk on open access. We also do not know how many librarians are subject to an OA policy, and those who are not are already free to self-archive immediately.
Explaining in its press release why it has introduced the trial the publisher said: “Emerald made the decision to trial the zero month embargo period following consultation with its newly formed Librarian Advisory Group (LAG). The group is made up of leading editors and authors from Emerald Library Studies and Information Management journals, alongside other key academics in Library Studies and adjacent disciplines. The group discusses and advises Emerald on issues of common interest in the LIS field including Open Access policy and editorial best practice.”
What Emerald has not been trumpeting, however, is that it is simultaneously increasing the article-processing charge of 32 Engineering and Technology journals, from £995 ($1,595), to £1,650 ($2,695) per paper — a rise of nearly 70%.
This is a hefty increase, and will doubtless spark a sense of déjà vu for some. In the 1990s Emerald became the target for heavy criticism for increasing the price of its journal subscriptions precipitously. Indeed, some believe that the opprobrium Emerald attracted at that time informed its later decision to change its name (the publisher was previously called MCB UP). It was assumed that the name change was intended to distance the company from the negative image it had acquired — although Emerald has denied that this was the reason.
Either way, the name change did not put an end to controversy. Emerald attracted further criticism in 2005, when Phil Davis, then at Cornell University, reported that the publisher had been covertly republishing hundreds of articles in its journals, and without citing the original source.
So why has Emerald chosen to trial ZEN with some of it library journals, what role did the LAG play in the decision, and what do members of the LAG feel about the associated 70% increase in the APCs of 32 engineering and technology journals?
In the hope of finding out I emailed Emerald and asked where I could find a list of advisory group members. It turns out that these are not publicly available. “The Librarian Advisory Group (LAG) are a newly formed international group who have not given Emerald permission to share their details so the list is not publically available,” an Emerald spokesperson told me. “The LAG advised us on issues relating to the zero embargo period for Library and Information Science and selected Information and Knowledge Management journals trial. The trial aims to find a sustainable path and we will be monitoring the impact as it progresses.”
I asked if Emerald could nevertheless put me in touch with the librarians privately. “I’m afraid I can’t share the details without their permission”, the Emerald spokesperson replied. “Hopefully you can appreciate we have to follow our data protection and confidentially procedures. However if you’re happy to leave it with me, we can ask the group if they consent to their names being shared. I can then let you know what details they consent to releasing but I can’t guarantee that I can get a response to you immediately.”
Two days later, out of the blue, I received a follow-up message from Emerald: “For the avoidance of doubt, our APC charges are not subject to discussion with the LAG,” this read, and added, “To maintain our agreed confidentiality we will not be able to provide you with contact details at this time.”
So what do other librarians think of the ZEN trial? When I pointed one (who is not on the LAG) to Emerald’s announcement he commented, “Well, I think this is a step in the right direction from Emerald, but I’m also not surprised that they did this with library journals, which are inexpensive and not cited much. They probably wouldn’t allow this with Chemistry journals for fear that self-archiving could harm downloads. They may be trying to outsmart librarians here!”
When I asked him what he meant he pointed me to a table in the Library Journal (#3 here) listing the average cost of journals by subject area. This reveals that the average library journal subscription is $493 per annum compared to $2,281 for engineering journals, and $1,876 for technology journals (The average cost of chemistry journals is $4,333). Clearly it would be less damaging to lose a few library journal subscriptions than to lose subscriptions to engineering and/or technology journals.
The follow-up message from Emerald provided me with the following additional quote on the ZEN trial: “[W]e think it represents an excellent opportunity to learn by working collaboratively with the community. Emerald will continue to work with its Librarian Advisory Group (LAG) to assess the impact of the trial, by monitoring the quality and volume of submissions, feedback from authors, and readership figures from both the Emerald platform and institutional repositories. Evaluation of this trial will help to inform Emerald's future Open Access policies and initiatives.”
It is perhaps important to note here that even if Emerald were to offer ZEN for all its journals, it would be doing no more than reverting back to its previous positon, a positon that when speaking to me in 2001 Emerald’s then business development director Kathryn Toledano had implied gave Emerald a competitive advantage. Self-archiving, she said, “is a realistic need for many authors, and we would rather allow this than miss out on the potential of high-quality articles that may be published elsewhere.”
The implication is that by offering ZEN a publisher can hope to attract authors who might otherwise publish elsewhere. Might it be, therefore, that Emerald has decided to test ZEN because it has experienced a fall in submissions from librarians in the wake of imposing its embargo?
What seems odd, however, is that Emerald insists on keeping the names of the LAG secret. After all, in its press release it made a point of saying that it had consulted with the group. Given that, why would it want to withhold their names? And if it is the librarians themselves who want to remain anonymous, we must wonder why they are so shy.
Based on market and competitor analysis
When I asked the Emerald spokesperson why the publisher had decided to increase the APCs for 32 of its journals, and why the rise was quite so precipitous, she replied: “The decision, based on market and competitor analysis, will bring Emerald’s APC pricing in line with the wider market, taking a mid-point position amongst its competitors. The increased price point will also enable the company to better support the author community as OA developments continue to evolve.”
This would seem to imply that Emerald’s pricing policy is based not on what it costs to publish an article or journal (plus an element of profit), but on what other publishers charge. When I put this to the Emerald spokesperson she replied, “Naturally Emerald took lots of different elements into consideration such as our own business costs and market analysis, however the decision also seriously considered how we can better position the portfolio to support the author community for the future.”
In her follow-up message two days later she added: “Emerald is fully committed to maintaining a fair price for its Gold OA option for authors and funders. With this in mind, we have been continually reviewing the level of APCs since introducing our Open Access option. We feel the APCs currently in place will support on-going OA initiatives that help the scholarly communities we work with to make a greater impact with the research they publish.”
But what does this all mean? It is worth remembering that OA advocates have always insisted that open access would act as a disruptive force in the scholarly communication market. For instance, they said, by lowering the cost of entry it would allow new publishers and new products to emerge. And by leveraging web technology these new entrants would completely reinvent scholarly publishing for the networked age. Amongst other things, this would increase the speed and efficiency with which research was shared, and so enable better and faster innovation to take place, to the benefit of the whole of society. Importantly, they added, it would lower the costs of scholarly publishing, and so resolve the affordability problem that has had the research community in its iron fist for several decades now.
To date none of these objectives has been realised. While we have seen a few experiments in alternative peer review practices, and new ways of trying to measure the quality and impact of research, the outdated journal model continues to dominate, the quality of papers has fallen, retractions have increased, and sharing research remains a slow and inefficient process.
As former CEO of scholarly publisher De Gruyter Sven Fund noted recently, OA has not changed the game in any meaningful way. “While it has achieved remarkable change within the system, this has not led to a paradigmatic change”, he said, adding that this is partly because “its disruptive potential has been rather fenced during the past years.”
Meanwhile, traditional publishers are in the process of capturing open access in order to exploit it for their own ends, with the result that costs are rising rather than falling — as evidenced by the fact that large subscription publishers appear to be hoovering up most of the money that research funders like the Wellcome Trust and RCUK are making available in order to fund gold OA (and this is in addition to the subscription revenues they continue to earn).
It is no surprise, therefore, that large publishers continue to enjoy operating profits of around 34% to 40%, a level widely felt to be far too high. (See here, here, here, and here for example).
Emerald’s recent price increase would seem to confirm that the trajectory for prices is up rather than down. And for so long as publishers set the price of their OA services at a level intended to preserve their historical revenues (or at a level that matches what their competitors charge), the much-anticipated cost savings OA was expected to deliver are unlikely to be realised.
Consolidation rather than disruption
But there is more to explore here. The year before I spoke to Toledano (2001) Emerald’s profits had risen by 47%, to £7.5 million. Importantly, its operating profit as a percentage of turnover was comparable to that of the large scholarly publishers — 38%.
In order to compare this with Emerald’s current performance I took a look at the publisher’s recent financial figures. As these do not appear to be on its web site (perhaps because it is a private company) I downloaded several years-worth of the financial reports that Emerald has filed at UK Companies House.
These show that last year (2014) Emerald’s operating profits were just £219,401 higher than in 2001. Moreover, the year before (2013) they had been £334,543 lower than in 2001 (but £89,868 higher than 2001 in 2012).
Significantly, while Emerald’s turnover has increased from around £20 million in 2001 to £36.7 million today, its operating margin has declined to 21%. This may still be a margin many industries would envy, but what do we make of the fact that Emerald’s profitability over the past 13 years has declined? Has Emerald not been as canny as its larger competitors, or does it tell us something about the scholarly communication market? Does it, for instance, support the OA movement’s assertion that open access will inevitably exert downward pressure on publisher profitability, and so eventually resolve the affordability problem?
Clearly, we cannot generalise from just one company. Nevertheless, as noted earlier, Emerald’s recent hike in prices does not appear to suggest that the publishing costs incurred by the research community are on a downward path.
As also noted, the assumption made by the OA movement was that the web would allow a host of small, innovative new companies to enter the scholarly publishing market, and impose intense competitive pressure on incumbents. Amongst other things, they said, this would drive down prices. But while we have seen companies like PLOS and PeerJ emerge, it appears that the web has accelerated consolidation in the industry rather than disrupted it. This has allowed incumbents to control pricing. And as the big beasts get bigger so the affordability problem gets worse.
The extent to which just a few large companies now dominate the scholarly publishing market is clear to see if one reads a recent paper entitled The Oligopoly of Academic Publishers in the Digital Era, published in June in PLOS ONE.
As the paper’s abstract puts it, “The consolidation of the scientific publishing industry has been the topic of much debate within and outside the scientific community, especially in relation to major publishers’ high profit margins. However, the share of scientific output published in the journals of these major publishers, as well as its evolution over time and across various disciplines, has not yet been analyzed.”
Consequently, it says, “This paper provides such analysis [and] shows that in both natural and medical sciences (NMS) and social sciences and humanities (SSH), Reed-Elsevier, Wiley-Blackwell, Springer, and Taylor & Francis increased their share of the published output, especially since the advent of the digital era (mid-1990s). Combined, the top five most prolific publishers account for more than 50% of all papers published in 2013. Disciplines of the social sciences have the highest level of concentration (70% of papers from the top five publishers), while the humanities have remained relatively independent (20% from top five publishers).”
In other words, rather than curbing the power of large publishers, the digital environment and open access have conspired to increase their domination. This in turn is allowing them to set their own prices. Indeed, by introducing hybrid OA, they are now able to double charge as well, gouging the public purse as never before (as the Wellcome Trust and RCUK figures cited above show). And as Emerald’s price increase demonstrates, smaller publishers look to their competitors when setting their prices. Essentially, scholarly publishing has become a pricing arms race.
However one looks at it, any expectation that open access will lower costs currently appears a forlorn one, and the affordability problem can only be expected to worsen going forward. Surprisingly, however, this looks to be bad news not just for the research community, but for smaller publisher too. Let’s see why.
A scale game
When I asked Claudio Aspesi, a senior research analyst at Bernstein Research specialising in scholarly publishing, about Emerald’s financial reports he confirmed that the company’s operating margin has fallen to 21%. But he added: “I am not shocked that a smaller publisher should have lower margins than Elsevier — in the end this is a scale game.”
He explained, “One way to think about this is that Elsevier achieves about £1.1 billion in revenues with about 2,500 titles (i.e. £440,000 per title), while Emerald has revenues of £36.7 million with about 290 titles, i.e. £126,000 per title (and this is a generous assumption, since their revenues also include books, while the Elsevier data includes only journals). Unfortunately, we do not get an annual article count (the web site mentions 80,000 articles — but it does not clarify whether this is an annual number)”
In other words, Aspesi added, “Elsevier gets £1.1 billion in revenues off 350,000 articles, which equates to about £3,100 per article, while — if we assume Emerald publishes 80,000 articles — it makes £460 per article. This is not unreasonable for a small publisher, but it also explains the gap in profitability.”
Emerald’s latest price increase, therefore, needs to be seen in this context. Faced with a falling operating margin, the publisher presumably feels compelled to keep up with its larger competitors on pricing. In doing so, however, it may be running to keep still.
Given this, Emerald’s (currently limited) return to ZEN would seem to make sense. As Toledano suggested in 2001, allowing immediate self-archiving could provide smaller publishers with a competitive advantage. This seems all the more likely in light of Elsevier’s recent tightening up of its self-archiving rules (introducing embargoes where they did not previously exist, amongst other things).
But here is the interesting question: is it more likely that Emerald will return to ZEN with all its journals, or that it will extend its recent price increase to all its journals?
Given RCUK’s preference for gold OA, and its current willingness to pay publishers’ asking price, the latter might seem more likely. RCUK’s policy is fuelling price inflation. And since the oligopolists of scholarly publishing appear free to charge what they want, they will naturally seek to extract more and more money from the public purse each year, enabling them to get bigger and bigger.
As a result, the pressure on smaller publishers to increase prices in the slipstream of their larger competitors can be expected to grow. Not only do they need to keep up with the market price, but as the Big 5 get bigger we can anticipate that it will become more and more difficult for smaller players to maintain their operating margin, not least because they can only dream of the economies of scale enjoyed by the behemoths.
In the interests of fairness, on Monday I forwarded a draft copy of the above text to Emerald Group Publishing, indicating that I would be happy to post a response beneath my text. I had received no reply to my email from the company at the time of publication.