Springer Nature’s recent stock initial public offering (IPO) ultimately failed, but it provided the academic community with plenty of information about the company’s and the academic publishing industry’s philosophy, as well as its anxieties. In fact, the prospectus that accompanied the IPO reads like an extended, dire warning about the dangers facing traditional academic publishers and their business model. This may have had something to do with the failure of the IPO.
Conversely, the prospectus is a surprisingly tacit acknowledgement of the power of the academy to throw off the yoke of Springer Nature and its competitors. The document is long, but well worth reading for anyone interested in academic publishing.
First, the prospectus sounds a cautiously hopeful note that “an industry shift towards the open access model will lead to an increasing number of open access publications, on platforms such as ours, and it will also lead to higher revenues from APCs [Author Processing Charges]” (:S-4). So of course, the goal of open access is not to democratize scholarship and to increase its availability. It is to get higher revenues from APCs. This is not exactly a surprise.
Springer Nature’s view of their business model
Springer Nature claims to create value “through performing a peer review process, which is intended to act as a quality assurance mechanism for the content we publish” (:4), selecting text, editing content, and securing copyrights (:S-3). Not only does the prospectus conspicuously fail to acknowledge that the value is mostly created by the unremunerated labour of volunteer, editors, board members, and reviewers, it actually suggests that these are paid functions, and even that authors are compensated: “Under our traditional subscription model, the subscribers of journals, databases and eBooks pay us for access to this content. In turn, we remunerate owners of journal intellectual property rights or eBook authors and editors for their content contributions”.
The prospectus inexplicably goes on to present APC supported open access as an inversion of the traditional business model in which authors are compensated and the consuming public is charged a subscription fee. Any academic who publishes will know that this is a very strange portrayal of academic publishing. Springer Nature understandably warn that “Any failure to attract and retain a large number of high quality editors, editorial board members, and peer reviewers will significantly negatively impact our operations” (:S-16). This threat would be even more real to the reader if they described the system as it actually exists.
Disintermediation is here
But of course, the biggest threat they identify is the internet. “It may enable authors to disseminate their work in electronic form without the need for an intermediary such as us, making them less dependent on our services and know-how in the fields of sales, printing and distribution” (:1). This is really all we need to know, because “These and other factors may lead to a disintermediation of our industry or otherwise negatively affect our value proposition, which could jeopardize our business model as it currently exists” (:2). Academic authors have no need for sales, since we are not paid for what we publish, and we have no need for printing, since we can post whatever we want, wherever we want. We increasingly control our own distribution, and we already organize and provide the editing and reviewing for free. The intermediaries are looking less intermediate all the time.
The business model and philosophy of Springer Nature and its competitors, as is openly acknowledged in the prospectus, is to insert themselves as unnecessary intermediaries in the academic publishing process, and profit from it. The main threats to their existence are factors that can lead to disintermediation. I would say their business model is dead. The intermediaries are no longer necessary and it is only a matter of time before everyone realizes it, and they become fully disintermediated in a post-journal academic publishing landscape.