New Economics

Session 4: New Economics

(This was in many ways the most interesting session of the day, in part because of the real overlap between Michael Jensen’s vision of the peer-review system of the future with MediaCommons’s goals, and in part because of the difficulty of the economic questions that were being asked. This produced a really compelling — and very high-stakes — discussion amongst the group assembled.)

Michael Jensen, Director of Publishing Technologies, The National Academies Press

[this talk was based on two of Jensen’s articles: “The Deep Niche” in the current issue of the Journal of Electronic Publishing, and an article forthcoming in next week’s Chronicle of Higher Education on “Authority 3.0”]

shift from tactics to strategies
“the long tail”; “the deep niche” — content scarcity v. content abundance; scholarly authority in near future (authority 3.0 — computable authority? upcoming chronicle article)

national academies press required to be self-sustaining

website is very long-taily; more than 1100 items were purchased only once

a huge percentage of visitors find site via google; percentage of visitors who purchase is 0.2% — but tiny conversion rate still results in $2 million in sales

tiny conversion rate might teach us about “deep niche” — percentage of people who, on any given day, are newly interested in and willing to pay for high-quality online content — continuous rolling special interest market

we’re still operating in a mode of information scarcity, visible in the ways that scholarly authority is conferred — just as it has been for decades, institutionally, with exclusivity in a world of scarce resources

this has changed in the world of broadband — anything and everything could be published online

how do we manage in a world of content abundance? — google page rank; digg/slashdot; tagging

how will scholarly authority be computed in an online environment of abundance?

authority 3.0 will likely include algorithms for everything: prestige of author, prestige of reviewers/commenters, prestige of sources of links, etc.; attention metrics

challenge for universities will be determining means that scholars can be fairly judged via these new metrics, and not leave those judgments to presses and libraries

need to think hard about computable authority, and how to be part of that computation — can’t leave it to google to sort out for us!

if we stick to old scarcity-based metrics in tenure/hiring/firing, will be demonstrating our irrelevance

Terry Ehling, Director, Center for Innovative Publishing, Cornell University

four topics that keep her awake at night:

— arXiv: Cornell University Library now manages, for $200K/year — only manages to keep the lights on; cannot grow, cannot capitalize; how to create and attach revenue model to a resource that must remain open-access? Without doing so, arXiv can’t grow

— rumor is that Nature is going to start publishing ephemera (poster sessions, informal discussions and slides from conferences) — moving closer to authoring process — meaning that Nature will now have rights to everything that grows out of that early-stage material; for-profit publishers are commodifying process, so how will u presses respond?

— Amazon “publishing” Cornell/UMich titles in public domain; selling like hotcakes, even without marketing — this process is not innovative, but it demonstrates to library that they can bolt a revenue-capturing model onto non-rev processes and materials

— what does it mean for scholars to communicate via mobile/handheld devices? more audio-based scholarly communication environment? how do we prepare for that?

— thought experiment: lop off on-ramp of scholarly publishing (no more acquisitions) and off-ramp of libraries (no tools for push content); what do you do with the material you already have? how do you repurpose it?

Kate Wittenberg, Director, EPIC, Columbia University

observations and long-term concerns; some provocative comments

needs to be a clear distinction between commercial presses’ income production models and university presses’ cost-recovery needs — don’t confuse the two; cannot throw out the model of charging fairly to recover costs out of anger with commercial presses’ strategies of overcharging

someone has to pay for all this: high-quality publishing, editing, etc has serious costs associated with it; we do the discussion a disservice if we don’t acknowledge those costs, and that someone must cover them

must also acknowledge that some business models for digital publishing have worked well — institutional subscriptions for digital resources, for instance; may need to be tweaked or modified, but shouldn’t be thrown out

however, new forms of publishing — blogs, wikis, etc, as well as research material, curricular material, etc — require new business models; institutional subscription models won’t work; levels of access?

long-term concerns: mechanisms for retaining highly-skilled staff, thinking about career paths for staff — staffing must be stabilized alongside technical infrastructure

must figure need for R&D into budgets — can’t just cover costs of doing what you’re doing and then leave it alone — need to be able to develop with users

in order to develop effective business models, must have good handle on costs; hard to do in collaborative environment, but need to learn how

Q&A:
— questioner moved by Kate’s concluding remarks about cost-accounting — different ways of looking at business between libraries and presses; might be useful to have a conversation about the kind of accounting system needed to work for collaborative enterprises
— caution from Michael Jensen, though: decline of book sales in Czech Republic once accounting system was improved and they figured out how much a book really “cost” — better accounting, but great cultural loss; should everything be cost-effective?
— “cost-recovery” won’t work for electronic publishing, because “costs” don’t always come on the front end; maintenance and development of texts post-production is a huge percentage of costs
— are we coming at this backward? rather than trying to recover costs on new projects that we’re not sure that people want, why not find ways to market the material we’ve already got that we know people want?
— Terry Ehling: does a university press necessarily need to collaborate with its own library? what kinds of cross-institutional collaborations might be imagined?
— can these kinds of projects be done without being on the dole? what is the responsibility of the university to support these projects? if presses and libraries are taking on a service role, infrastructure-building will require money up front; institutions need to support. Must still be careful about accounting, but not sure we can or should move toward full cost-recovery model
— how do we explain what the mission is to the university?
— no single model will work, not for any discipline, not for any particular kind of content — must be in many networks, many distribution channels
— that’s difficult for small presses, or presses with limited resources
— part of tradition of library is to hide costs from users — that’s part of the service! — don’t want scholars to think about costs of things, want them to go and get the articles; not necessarily good for research to show all costs
— abundance v. gatekeeping: society determines what is “quality” by what it’s willing to spend money on; doesn’t always make good decisions, but… to some degree, resources get allocated according to quality; if we can do that better, ok, but there is a connection between what we’re willing to pay for and how good something is
— in a world of over-abundance of information, having someone be the selector can be of great value to scholars
— Terry Ehling: is quality what we put into texts, or what users get out of them? quality isn’t defined by us, but by the user
— longish discussion about pricing
— what we’re forgetting is that part of the crisis that has produced this discussion is due to pricing of science journals
— need to remember the mission — scholarly communication
— two questions from Catherine Candee — what do we think about proposal that scholarly publishing serve a more public mission? and what about wikipedia-style textbooks?

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