The OA Interviews: Frances Pinter

In 2012 serial entrepreneur Frances Pinter founded a new company called Knowledge Unlatched (KU). The goal, she explained in 2013, was to “change the way we fund the publishing of quality content” for book-length publications, and in a way that would allow them to be made open access. 

With that end in mind, Pinter launched a pilot project in which research libraries were invited to pool money to fund the “fixed costs” of publishing monographs. By doing so, Pinter reasoned, PDF and HTML versions of these “unlatched” books could be made freely available on the Web, but print and other premium versions would continue to be sold in the traditional manner. And those libraries that contributed to the pool would earn the right to buy the premium versions at a discounted price.

In a spirit of civic-mindedness Pinter created Knowledge Unlatched as a UK non-profit Community Interest Company (CIC). And with Pinter’s formidable reputation as a publisher, KU quickly acquired mindshare and influence, and went on to play an important role in the thinking about the scope and opportunities for OA monographs, as well as in policy development – both in the UK and globally.

Above all, says Pinter below, KU went on to provide proof of concept for a new way of funding OA monographs, and perhaps of funding OA more generally.

Sustainability

Initial funding for KU came from (amongst others) the British Library Trust, Open Society Foundations, HEFCE, as well as a number of Australian libraries.

When that funding ended, however, as a non-profit CIC, KU struggled to raise further funds or capital. And with few assets to offer as collateral, commercial loans were equally hard to come by. Consequently, it was not immediately clear how KU could become financially sustainable, or even whether it could. Faced with this truth, says Pinter, she was minded to call it day.

Supporters, however, were urging her to continue and so Pinter drew down a six-figure sum from her pension savings and, with some additional funding from Australia’s Curtin University, she proceeded to a second pilot round. This saw increased support from publishers and a larger number of books offered for unlatching. But while this was encouraging, the sustainability issue had not gone away.

At this point, Pinter was approached by former De Gruyter CEO Sven Fund and invited to sell some of KU’s assets. She agreed, and Fund acquired the bulk of KU.

As a result, KU was transformed from a UK non-profit CIC to a for-profit GmbH based in Berlin, and KU is now owned by another Sven Fund for-profit company called fullstopp.

After acquiring KU, Sven Fund moved quickly to develop and launch a raft of new products and initiatives, including a journal collection, KU Partners, KU Select and KU Open Funding. The latter is a platform designed to act as a broker between research institutions, publishers, and authors who want to make their monographs OA.

Criticism

However, KU’s change of status and its more aggressive stance in the marketplace has attracted criticism from the research community. This came to a head last month when former KU employee Marcel Knöchelmann published a post on the LSE Impact Blog in which he complained that KU had undergone a process of silent commercialisation. He also suggested that the decision by UK funder Research England to contract KU parent fullstopp to undertake a survey of the OA monograph landscape raised conflict of interest issues.

The problem, he said, is that “The parent company of the commercial entity which stands to profit from a future of open access book publishing is advising on what the future of open access book publishing in the UK should be”.

In a separate post two days later the Director of Open Book Publishers Rupert Gatti complained that KU was insisting that those publishers who use the KU Open Funding platform must sign an exclusive contract.

As a result, said Gatti, OBP would not be participating in KU Open Funding. “These types of exclusivity contracts can be used by digital ‘platforms’ as a strategy to monopolise and dominate an industry.”

Other OA monograph publishers have indicated that they too plan to boycott the KU Open Funding platform, including members of the ScholarLed consortium of academic-led, not-for-profit, open access book publishers.  

In response, KU has agreed to cease insisting on exclusive contracts and Research England and fullstopp have said that both the survey questions and (some of ) the responses fullstopp receives to that survey will be made publicly available (more from Research England here).

Nevertheless, it is not clear that critics are yet convinced that KU’s business model is the right one. Nor have they come to terms with its new for-profit status. “I feel crowdfunding from libraries to unlock back- and front-list titles merely funnels more money to conventional academic publishers, who don’t have to change their broken business models at all,” Eileen Joy of non-profit punctum books told me on Twitter. “In other words, it’s not a transformative approach to OA and it keeps broken systems in place.”

She added, “We don’t want to see too many for-profit ‘middlemen’ between publishers and librarians. We want to build partnerships with libraries (and have already done that; e.g. punctum just inaugurated a two-year pilot partnership with UCSB Library at UC Santa Barbara).”

Eileen Joy concludes: “We are also troubled by the transfer of KU from a non-profit directed by Frances Pinter to a for-profit directed by Sven Fund in Berlin. Does anyone know anything about the details of that transaction / hand-over? Did Sven Fund buy KU from Pinter and for how much? What is her role now? Isn’t Fund a venture capitalist? Does he really have a commitment to the long-term health of a more equitable ecosystem for OA and scholarly communications or is KU a business venture for him?”

Hopefully, the interview below with Pinter (and what I have said above) will go some way to answering these questions.

Logical and inevitable?

We should also note that some view KU’s transformation as both logical and inevitable. “I’m not terribly surprised to see KU shifting to a more – shall we say – corporate model,” says Rick Anderson, Associate Dean for Collections & Scholarly Communication at the University of Utah’s J. Willard Marriott Library. “I think it had two choices: either continue trying to do something that its marketplace can’t really support (and do it at a loss) or shift to a mode that recognises market realities but upsets the ‘free everything all the time’ ideologues. Unsurprisingly, KU seems to have chosen the sustainable path rather than the politically correct one.”

Anderson adds, “Now, is the sustainable path they’ve chosen the right one? I don’t know. But I will say this: pearl-clutching reactions to the ‘commercialisation’ of OA book publishing are disingenuous at best. If the OA community objected to commercialisation they wouldn’t insist on CC BY.”

Nevertheless, Anderson too is sceptical about KU’s business model. “I have to confess that the KU plan has never made much sense to me from the very beginning”.

The KU story is an interesting one. More importantly, however, I think it is instructional, since it invites wider questions about open access and the open access movement. For instance, it draws our attention to the growing anxiety amongst OA advocates about the role of for-profit companies in scholarly communication.

It is striking, for instance, that an organisation whose founder was just three years ago on the verge of calling it a day is now viewed as a dangerous shark in the OA waters bent on monopolising the monograph business. But perhaps there are good reasons for OA advocates to be anxious: we have learned that in an online world first movers in any new platform market can quickly come to dominate and control that market (and we have a new term for this: “platform capitalism”).

At the same time a view has emerged that says that the real issue here is not whether an organisation is for- or non-profit, but the degree to which it is willing to embrace openness. And many now believe that openness in scholarly communication needs to encompass not just the content being distributed, but all parts of the infrastructure that allows that distribution to take place.

Thus, we can see growing calls for “open infrastructures”. This is necessary, the authors of this 2015 piece explain, because, “Everything we have gained by opening content and data will be under threat if we allow the enclosure of scholarly infrastructures.”

Interestingly, one of the authors of that document was Cameron Neylon, the new Executive Director of that part of KU that Sven Fund did not acquire – KU Research.

We could also note that one of those advocating for this greater openness today is Paul Peters, the CEO of for-profit OA publisher Hindawi. Last year Peters made a case for the necessity of what he refers to as four basic principles of openness in any model where commercial providers develop and maintain open scholarly communications infrastructure. These are: open source, open data, open integrations, and open contracts.

I hope to cover these wider issues in a future post.

Above all, the KU story is a timely reminder that we live in uncertain times, and we don’t know what the future holds. We certainly don’t know what the fate of the KU business model will be, or how successful the company will prove in its new for-profit status.

Whatever the future holds, Frances Pinter, through her work with KU, has surely helped move our thinking forward. She has also conducted a real-life experiment at a time when experimentation is vital. If she risked some of her own pension in order to do that then it is to her greater credit.

But please read the interview with Frances Pinter below for a fuller picture of the KU story. 

The interview begins …

RP: I understand that you founded Knowledge Unlatched (KU) in 2012 in order to, as you put it, “change the way we fund the publishing of quality content” for book-length publications. To this end KU began inviting research libraries to pool money in order to fund the “fixed costs” of publishing OA monographs. The idea is that this allows PDF and HTML versions of “unlatched” books to be made freely available on the Web, with premium versions sold in the traditional way. And those libraries who have contributed to the pool are able to buy the premium versions (including, presumably, print copies) of the books at a special discounted price. Is that an accurate description?

FP: A full explanation of the original concept for the Knowledge Unlatched model can be found in the detailed report on the pilot project. The description you give is accurate as far as it goes but misses important details.

Knowledge Unlatched was conceived as a crowdfunding model. In its early stages, it was focused on libraries. This was to ensure that we understood, and were able to respond to, the needs of a clearly defined community.

Initially, libraries indicated a preference for the OA version of titles to be made available as a fully downloadable PDF. ePub is now more widely used and the OA versions of Knowledge Unlatched titles are now often available in ePub format. Print and retail ebooks continue to remain available through the normal commercial channels.

As Knowledge Unlatched moved beyond the proof of concept and pilot it has been exploring a wider range of constituencies. Supporters of OA through Knowledge Unlatched now include learned societies, and even individuals. An example is Language Science Press, which works with Knowledge Unlatched as its crowdfunding agent.

RP: The formula appears to have been successful: I understand KU is now the largest gatekeeper to OA scholarly books. What aspect of KU’s success do you take particular pride in and why?

FP: The term ‘gatekeeper’ is an odd choice of word. I’ve always thought of KU as a ‘facilitator’ of OA. Knowledge Unlatched facilitates OA for books that have already passed the editorial threshold for a monograph publisher. Knowledge Unlatched should certainly not be the only model for funding OA monographs.

I would suggest that ‘largest’ is also misleading. Knowledge Unlatched has succeeded in crowdfunding OA for a few hundred front-list and a similar number of backlist titles each year. In the context of around 30 thousand monographs published annually in English (an estimate from Richard Fisher and others) over 4,000 English language monographs in the OAPEN index, and well over 10,000 listed in DOAB, Knowledge Unlatched is a small part of the overall landscape.

I am most proud of the fact that we changed people’s thinking about possible approaches to funding OA publishing. Regardless of whether or not the core Knowledge Unlatched model ultimately turns out to be one of the better models for supporting OA, Knowledge Unlatched has encouraged people to think about new approaches to supporting the costs of high-quality OA publishing.

Rick Anderson has described three levels of proof for ongoing projects or initiatives in scholarly communication – they are proof of concept, proof of program and proof of scalability. I succeeded in providing the scholarly communications community with a proof of concept for a new approach. It is now up to others to adapt and learn from this proof of concept – and to continue driving the OA agenda forward.

RP: In addition to enabling OA the expectation was that the KU model would lower the costs of monograph publishing. I am wondering how this works. Production costs aside, there is still an intermediary to be paid (KU), which is presumably charging both libraries and publishers for the services it provides. So, there are still intermediary costs to factor in. Have we yet seen prices fall? If so, by how much do you estimate they have fallen?

FP: We know from work by Michael Jubb and Richard Fisher that intermediaries can take as much as 50% of the cost of a book that is paid by libraries. Knowledge Unlatched charges 15% of the BPC [Book Publication Charge] equivalent to cover coordination costs. This is used to pay staff and to market the packages to potential contributors.

An important principle and contributor to the success of the Knowledge Unlatched pilot mode was to not interfere with, or set, input costs. The Maron Report shows there are huge variations in ‘getting to first copy’ publishing costs.

In the longer term, it is possible to speculate that both the coordination costs and the input costs could fall. To achieve a reduction of the coordination costs requires substantial scaling up which was not feasible with the capital available to KU as originally constituted.

An important contribution of the Knowledge Unlatched model is that it makes it possible for publishers to receive an upfront payment. By helping publishers to recoup the costs of publishing a monograph early in its life-cycle the Knowledge Unlatched model reduces the risks associated with publishing.

For instance, publishers may then choose to produce paperback versions at lower prices as soon as a book is published – where they might otherwise have had to stick to the hardback format in order to recover their input costs before making paperback versions of a title available. I’ve written more on BPC charges here.

CIC to GmbH

RP: You recently stepped down as CEO of KU in order to do other things. Preparatory to your handing management over to Sven Fund, KU was transitioned from being a UK-based non-profit to a German-based for-profit and is now owned by Fund’s consultancy company fullstopp. I think this happened in 2016. But when did you formally leave KU, and can you talk me through the process by which KU moved from being a non-profit to a for-profit, and how the staff were formally moved from a UK non-profit to a for-profit based in Germany? How does such a transition work?

FP: I set up Knowledge Unlatched as a membership-based Community Interest Company (CIC) in 2012. This is a UK legal form that is similar to a US B-Corp.

Between 2012 and 2014 direct and in-kind support for the Knowledge Unlatched CIC start-up and proof of concept phases came from a range of sources, including from philanthropic foundations and libraries. Full details of how the first phases of the project were funded are available in the Full Pilot Report here.

The goal of the pilot was always to develop a financially sustainable model for coordinating the costs of OA for high-quality scholarly monograph publishing. After the proof of concept phase our financial modelling showed that if Knowledge Unlatched was able to achieve a sufficient volume to support core overhead and marketing costs, it could be sustainable. What was required was a capital investment to reach this scale.

This capital was hard to raise. As a not-for-profit CIC with few assets, we were not able to take on commercial loans. Grant-giving bodies and philanthropic funders regarded the proof of concept as a success – and therefore not requiring further funding from them. Lucy Montgomery’s ability to continue working full time on Knowledge Unlatched had come to an end (she had been funded by a Vice Chancellor’s Research Fellowship from an Australian University, and her fellowship term had concluded).

Like many such efforts seeking funding to expand to sustainability, Knowledge Unlatched was neither fish nor fowl – not seen as an investment opportunity with future returns, nor appropriate for grants. Despite approaching several players with both capital and a potential strategic interest we could not raise the necessary funding.

I was at the point of calling it a day, and in any case was seriously stretched myself as CEO of Manchester University Press.

However, others urged us to continue beyond proof of concept. I therefore provided the capital personally by loaning the CIC a small six-figure amount of money (obtained from my pension savings) to continue covering costs. That is, I provided a loan to KU CIC to cover the running costs of the second round, which was launched in 2015.

We also secured some additional funding from Curtin University in Australia and in the second pilot round we doubled the number of publishers and tripled the number of books.

Then in late 2015 Sven Fund – who had already left de Gruyter and was setting up fullstopp – made an offer for some of the Knowledge Unlatched CIC assets, which we accepted. The agreement with fullstopp was completed at the end of March 2016.

At that point, I handed over Knowledge Unlatched operations to manage the coordination of monograph funding to Sven. I helped out a bit in the next 12 transition months, in order to maximise the chances that Knowledge Unlatched would scale successfully.

After the sale, in 2016 the GmbH paid for some CIC staff time (including a small amount of my time) for assistance over a transition period of a year.

The only person permanently on the payroll of the CIC was the partnership manager who continued working for Knowledge Unlatched CIC part-time from 2016 through to early 2017.

RP: You say Sven Fund made an offer for some of the Knowledge Unlatched CIC assets and you accepted. Can you say how much you were paid?

FP: The external valuation of the operations agreed at the time was essentially the amount of the loan that I had made to Knowledge Unlatched CIC. Sven paid this amount to the CIC, and the loan amount was then returned to my pension pot.

There are strict restrictions on how a CIC can sell assets and what it can do with the proceeds (see here). We were guided through the process by BWB, who incidentally also developed the CIC legal form in the UK and were especially well placed to make sure we followed the rules.

RP: I note you are still listed on the KU web site as a member of the advisory board. How would you describe your role and relationship with KU now? Do you have any ownership stake in the company today?

FP: I am an unpaid member of the advisory board and I have no stake in Knowledge Unlatched GmbH. The advisory board is consulted from time to time – with about 2-3 conference calls a year. Although called a ‘board’ it has no legal status under German law. I will be stepping down from this advisory board in March 2019.

RP: Do you have any role within/ownership of fullstopp?

FP: No.

KU Research

RP: I see there is also still an active non-profit UK company called Knowledge Unlatched listed in Companies House.

FP: Yes, KU Research (KUR) is the current trading name of Knowledge Unlatched CIC. During 2014-15 we were developing the idea of KU Research. This would be a vehicle to develop a high-quality collaborative research programme to support community members to address the new challenges associated with OA for scholarly books.

So, after the sale of the KU core business to Sven Fund I continued as Executive Director of KU Research which remained with the UK based Community Interest Company. This operates independently from the German-based Knowledge Unlatched GmbH and has no legal relationship with it.

RP: Earlier this year it was reported that you had stepped down from that organisation too, to be replaced by Cameron Neylon. You are still listed on the KU Research web site. Do you have a continuing role at KU Research?

FP: Yes, about six months ago Cameron Neylon took over as Executive Director of KU Research. He and Lucy Montgomery are in the process of developing a new business plan for KU Research, which will include a formal change of name to avoid confusion.

Fullstopp and Knowledge Unlatched GmbH have no role in KU Research. The formal name will be changed as soon as practicable. Ideas for a name would be welcomed. Names are hard. It took me two years to find and settle on Knowledge Unlatched!

I remain a member of the board of KU Research (the UK CIC) and plan to step down in March 2019. A new website is in the pipeline – along with the name change for KU Research.

The website you refer to has been static since Cameron Neylon took over.

RP: You say that KUR has no legal relationship with KU GmbH. However, I believe there is a profit-sharing scheme in place, and that KU Research receives money from KU? How does that work?

FP: As part of the sale of the KU core business it was agreed that in the event that Knowledge Unlatched GmbH made a surplus in the first three years of operation then 50% of that surplus would be paid to Knowledge Unlatched CIC.

RP: Can you say how much has been paid to KUR by Knowledge Unlatched GmbH under the profit-sharing scheme, and whether there will be any further payments?

FP: The 50/50 profit share which covers the first three years of the GmbH operations produced no income for the CIC in the first year, £12,000 for the second year and as yet an unknown amount for the 3^rd year, though we expect it to be in the same ballpark.

New products

RP: KU has been very active this year launching a range of new products/initiatives, including KU Select, KU Partners and KU Open Funding. Were you involved in the development of these products?

FP: No.

RP: As I understand it, KU Open Funding is intended to act as a broker between authors, publishers and research institutions so that authors can publish their books open access. How significant a change of direction do you think this is for KU? Do you think it could prove a powerful force in the growth of OA monographs?

FP: I think Knowledge Unlatched GmbH has identified a need to bring some order to how funding is channelled from sources of funding to publishers. Managing APCs is problematic, and it would be good if the community did not make the same mistakes with BPCs.

RP: One of the criticisms we have seen recently is that KU Open Funding was asking publishers to sign exclusive contracts. The concern is that these exclusive contracts would allow KU to dominate and monopolise the OA monograph market, not least because it will make it difficult for competing platforms to emerge. And as the tool incorporated into KU Open Funding will be tied to the platform there is concern that customers will become locked into a for-profit proprietary platform. Do you see any dangers here, or understand why some are concerned about this development?

FP: I understand Knowledge Unlatched GmbH has responded to the complaints about exclusivity and these contracts are now not made on an exclusive basis.

I encourage competition and hope this will bring forth lots of new ideas on how the support of high-quality OA monographs can be provided.

RP: Other OA monograph publishers seem more inclined to develop jointly-owned and managed (and open) alternative platforms. Do you think they can be as successful as a for-profit proprietary platform like Knowledge Unlatched GmbH?

FP: I am sure there are many successful routes to OA publishing. I believe in Geoff Crossick’s statement that there is no single model that will work for all books.

RP: Unless I missed it, both the change of ownership and the change of status (nonprofit to for-profit) of KU was not shared with the research community. Indeed, it seems it was only when a former KU employee published a blog post about KU last month that it became widely known, with some who work in the area expressing surprise at the news. Do you think that perhaps it was this that led to the recent criticism of KU?

FP: This is incorrect. A press release was issued and distributed widely. The legal status of the current KU GmbH is stated clearly on every invoice and every formal letter of correspondence as required by German law.

I cannot comment on why people did not note the change, or why it has suddenly, now two and a half years later, become an issue for some people. 

Conflict of interest?

RP: Another concern that has been raised by some in the research community is that Research England has commissioned fullstopp to conduct a quantitative analysis of the current landscape of book publishing in order to provide key evidence to the Universities UK monograph working group. Research England say that fullstopp was open about its relationship with Knowledge Unlatched in its bid submission and that the bid assessors did not perceive there to be a conflict of interest. Nevertheless, it has been put to me that if the Research England report comes back recommending a KU-like model, it will smack of conflict of interest, even though that model may be the most workable/the most sensible. What are your views on this?

FP: I hope it is now clear the ‘Knowledge Unlatched model’ includes a number of initiatives. It would be unfortunate, if not downright silly, if the choice of a contractor for a highly specific piece of quantitative landscape research limited the scope for Research England as a strategic organization to come to an informed conclusion.

Knowledge Unlatched GmbH and/or fullstopp are not producing policy recommendations. Any recommendations made by Research England, Universities UK, Jisc or other bodies are likely to raise some controversy.

A well-crafted and transparent quantitative study providing high-quality data on the details of publishers of UK monographs will be important in helping to navigate these challenging issues.

RP: What might seem strange is that last October you co-authored a 180-page landscape study of the OA monograph environment. Does that not suggest that the study aspect of moving to an OA monograph environment is being somewhat over-egged?

FP: This is a peculiar question. The studies are quite different, and, in any case, surely more comprehensive information is the basis for making informed policy decisions.

The KE Landscape Study examined monograph publishing in eight countries at a high level looking at funding streams and business models. The UKRI RFI called for a detailed quantitative analysis of the diversity and concentration of publishers of UK academic monographs, with a focus on submissions to REF2014, including pricing and other aspects not covered in the Landscape Study.

RP: One controversial topic with regard to OA monographs is that of licensing, with considerable resistance – especially from historians – to the idea of having to attach CC BY licences to their books. What are your views on licensing?

FP: My views on licensing have always been that authors should have the right to restrict books to CC BY-ND if that is their preference. If a publisher wants to apply a non-commercial restriction that should be allowed as they are generally in a good position to provide alternative formats which do require some investment – even if nothing like the initial “getting to first copy” costs.

RP: What other important issues do you think the topic of OA monographs raises that have still to be worked out?

FP: I think discovery still needs a lot of work – and it is good to see that this is being recognised.

As we say in the Knowledge Exchange funded Landscape Study here there are issues around monograph funding, but these are not as insurmountable as people think.

RP: What is your view on the likely future of OA monographs, both in Europe and the world generally? Do you think eventually all publicly-funded scholarly monographs will be available on an OA basis, or just a proportion of them?

FP: I think the majority of monographs will be made OA.

Some of the obstacles that we face today will find solutions. Remember, we are not living in a static world. I support Geoff Crossick’s view taken in 2015 that the ‘direction of travel is clear’.

There will be road bumps, but if people of good will work together there is a bright future for monographs and the global dissemination of knowledge. That is the prize and we mustn’t lose sight of it.

RP: Finally, can you say where you will be putting your efforts going forward? Will you continue to be involved in scholarly publishing for the foreseeable future?

FP: I’m now a research associate at the London School of Economics. I am working on the history of book-burning, as a rich source of examples of past efforts to de-legitimise knowledge.

I expect to be bowing out of the OA arena entirely in 2019. I wish all of you well.

RP: Ok, good luck with your new endeavours. And thank you for agreeing to do this interview.

FP: And I would like to thank you for the opportunity to tell your audience the KU and KU Research stories. It has been a fascinating journey for me.

In setting out to solve a single problem I learnt a great deal about the complexities of scholarly communications and have met some wonderful people who are all working hard to make access to knowledge more open for the global good.