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As their traditional print-based business models erode, major scholarly and textbook publishers are transitioning from being content providers to technology and data companies, too.
The stakes go far beyond the companies' own financial success: their collective platforms and tools -- the research databases owned by Elsevier and Clarivate, for example, or the data that Pearson and Cengage collect through their "inclusive access" programs and homework software -- could help them "influence, and perhaps exert control over, key university decisions, ranging from student assessment to research integrity to financial planning," says a new report commissioned by the Scholarly Publishing and Academic Resources Coalition, or SPARC.
The companies' successful capture of data about student and faculty behavior, research output, and institutional productivity, the authors warn, "could significantly reduce institutions' and scholars' rights to their data and related intellectual property."
SPARC, a coalition of libraries, is an unabashed advocate for policies that advance the open flow of information in education and research -- notably open-access scholarly publishing and open educational resources. As such, SPARC regularly criticizes the practices of big publishers.
The group, for instance, keeps close track of the cancellation of "big deal" contracts between publishers and universities and states (which have accelerated with the University of California's decision last month to end its pact with Elsevier) and promotes institutional and government efforts to embrace open educational resources to drive down students' textbook costs.
Heather Joseph, executive director of SPARC, said in an interview last week that the organization "owns" its reputation for taking an "open or bust" view of the world. But she also said the group was at a "more mature point in its organizational arc" and realizes that it can help its members not just through advocacy but with better understanding of the environment they're operating in.
"We want them to stop, be deliberate" about the choices they're making about what practices and what partners to work with -- "the things they should be aware of" as they decide whether to keep working with a major scholarly publisher or to use an inclusive access provider for their curricular materials, Joseph said.
So while Joseph acknowledges that this report is clearly part of the organization's overall advocacy, it is distinguishable from some of its other work because it was conducted by a former Wall Street analyst of the publishing industry, producing a balanced, "relatively strong analysis drawn from publicly available information," said Roger C. Schonfeld, director of the libraries, scholarly communication and museums program at Ithaka S+R.
The paper's lead author was Claudio Aspesi, who for more than a decade covered European media stocks for Sanford C. Bernstein (now part of Alliance Bernstein Holding), an investment management firm. The analysis explores the strategies and prospects for the dominant players in both the scholarly research market (Elsevier, Springer Nature Group, Wiley and Clarivate) and the textbook and student data analytics markets (Pearson, McGraw-Hill Education, Cengage) -- and finds similarities in how they are responding to the downward pressure on prices caused by the shift to digital and the impact of those new strategies on the academy.
In both scholarly publishing and the realm long known as "textbook publishing," Aspesi and his co-authors from SPARC write, the major companies "are transforming themselves into data analytics companies built atop their content, effectively adding ways to monetize it."
The report delves in some detail into the strategies adopted by Elsevier, for instance, to both hold on to its core journals business and collect data from its research databases (such as Scopus, Science Direct and Bepress) to improve its own operations and sell back information to universities, funding bodies and governments.
On the textbook and student learning side, it explores how Pearson, Cengage and McGraw-Hill are responding to the declining demand for and price of print textbooks by embracing inclusive access programs in which institutions automatically bill students for their course materials as part of their tuition or course fees, so that on the first day of class, every student has the right textbook and is ostensibly ready to learn. The materials must be offered to students at below-market rates, and students must be able to opt out.
While the report focuses on the economic pros and cons of inclusive access for the companies and for students (with a tilt toward the cons for students and institutions), it also says this to drive home the larger issue of the report: "Most important for the purposes of the issues raised in this document, once students transition to digital materials it enables both their institutions and the commercial vendors to collect vast amounts of data on them: their physical location when they use them, their study habits, their learning profile, and granular knowledge on their performance. This poses significant privacy issues, and -- potentially -- legal liabilities which could become, at some point, very grave."
As befits a document that SPARC officials portray as more objective landscape analysis than advocacy framework (SPARC officials say they plan to release a strategic "road map" in the coming weeks to help institutions and scholars respond to the market), the report offers little in the way of recommendations.
It suggests, however, that colleges and universities consider some "risk mitigation" strategies such as writing into contracts with publishers that the institutions (rather than the companies) own data produced by their digital tools and that colleges refuse to sign contracts that contain nondisclosure agreements.
"In conclusion," the authors write, "we believe there is still time for the academic community to act, and now is the time to do it. By taking stock of the situation, asking the right questions, and choosing the right course of action, the academic community can prevent itself from winding up in a position where it is obliged to follow a path out of its control and harmful to its future."
Reactions to the Report
Publishers had little to say about the report. Elsevier declined to comment on it, and a spokesman for Pearson, Scott Overland, offered this statement: "As institutions and faculty continue to look for ways to leverage technology to improve learning, faculty instruction, and lower the cost of higher education, we are proud to support them in doing so. Innovation in any product or industry is always met by some that doubt or challenge progress, but the digital transformation in higher education and the inclusive access model are here and offer real benefits to students, instructors and institutions.
"Inclusive access provides students with access to affordable, high-quality digital course materials and tools on the first day of class, at prices up to 70 percent off traditional print materials. First-day access has been proven to increase student retention and performance in class, and busy students, particularly those who are juggling work and school, know they are getting a great deal without having to spend time searching for course materials."
Schonfeld, from Ithaka S+R, said the SPARC report helps make clear how significant a transformation the onetime publishing companies are undergoing toward being technology and data companies.
He said, however, that by focusing on a handful of major players in the market, the report understates the explosion of competition in the space, including numerous start-up companies and organizations (especially in the scholarly publishing space) whose approaches may impede the behemoths' ability to take over the market in the way the report suggests.
The report also plays down some of the challenges that some of the big publishers face, such as the "leakage" of content through entities such as ResearchGate that could undermine publishers' attempts to control the research landscape.
"I think these major publishing houses have all sorts of strengths in these transformations, but also a lot of threats they're facing," Schonfeld said.
