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Magazines > Information Today > September 2004
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Information Today

Vol. 21 No. 8 — September 2004

Interview: Put Up or Shut Up
By Richard Poynder

Created from the recent merger of BertelsmannSpringer and Kluwer Academic Publishers, SpringerScience+BusinessMedia is currently owned by private equity firms Candover and Cinven. Derk Haank, Springer's new CEO (and former chairman of Elsevier Science), discusses his plans for the company, STM journal pricing, the Big Deal, and open access. Springer's new Open Choice, says Haank, is a direct challenge to open-access advocates to "put their money where their mouth is."

Q: You worked for Elsevier Science for 18 years. Why the sudden departure, and why to Springer?

A: I wasn't looking for a change, but I was attracted by the challenge of having ultimate responsibility for a company, rather than a division within a bigger unit. I also liked the idea of participating in the shareholding of a company.

Q: You have invested some of your own money in Springer then?

A: Yes.

Q: Can you expand on that?

Only to say that the entire management team was invited to participate in the company, and all of them have invested some of their own money in the venture.

Q: What does the new Springer consist of?

A:We have two activities. The biggest is the STM business, which includes around 1,400 journals. It is important to remember, however, that about one-third of the company is business-to-business publishing.

Q: Indeed, half the company's sales are in the German market. What's the geographical spread of the STM business?

A: As I say, we have two main activities. The business-to-business leg is almost exclusively in Germany. The STM leg is more broadly based, with about 40 to 45 percent of sales in the U.S., 35 percent in Europe, and the remainder in Asia and the rest of the world. I would think it is the same for competitors like Wiley, Blackwell, Reed Elsevier, etc.

Q: Springer is now the second-largest STM journal publisher, isn't it?

A: Right. We have a 9- to 10-percent market share, which compares with Elsevier's 28 to 30 percent.

Q: And last year the combined group's sales were [$1.02 billion]. Do you expect similar figures going forward?

A: Well, we have already made some portfolio adjustments. We have sold the print operation, Stürtz, for example, which will take [$73.7] million out of our revenue. But on a like-for-like basis we expect the business to grow by about 5 percent this year.

Q: Today there are around 5,000 employees. Were there many redundancies following the merger?

A: Not everyone can be given the position they might aspire to in a new structure, so a few people left, but not in massive droves.

Q: And, presumably, there is some overlap between the two companies' journals. Will some be discontinued, or merged?

A: In general the two portfolios are pretty complementary, so there is not a big overlap. Where there is, we expect to merge titles in the next year or two.

Q: And will you launch many new journals?

A: When companies go through a sales process it is not an ideal climate to innovate and launch new products, and I think we have a little bit of catching up to do. We have, therefore, urged our publishers to be bold in their aspirations for new products and new ideas.

Q: You've inherited two electronic platforms: Springer Link and Kluwer Online. How will these be integrated?

A: They have already been merged, and both are now running on EBSCO's MetaPress, which Springer had previously outsourced to.

Q: Springer is currently owned by private equity companies. Inevitably, this is likely to be a short-term investment. Is the plan to acquire further businesses and then go for an IPO?

A: We could add more businesses, but it is not absolutely essential. Our current size is sufficient for us to stand on our own feet quite happily for many years to come. However, I would expect an IPO in a couple of years. We are now in our second year, and private equity firms normally look to exit within 5 years. It's certainly the most logical exit route for Cinven and Candover, and it is also my preferred option because it would simply be a change of shareholding, and so [it] wouldn't impact the operations in any way.

Q: Can we move on to pricing? I'm told that Kluwer prices were generally higher than Springer's. Will Springer's pricing be rounded up to Kluwer levels?

A: Actually, if you look at pricing on a cost-per-article basis, then I don't think there was much difference in pricing. In any case, it is not the policy to make any changes to pricing.

Q: Historically, the pricing of STM journals has been pretty controversial, particularly with regard to the annual price increases. Elsevier says that it has now reduced these to between 6.2 percent and 7.5 percent a year. How does it look at Springer?

A: The figures are not markedly different at Springer, and we envisage that this will be the same going forward. But the reality is that annual price increases have become almost academic, since nearly all our customers now negotiate individual contracts. These will usually cover both paper and electronic versions of the journals, with maybe some backfiles too; they will also guarantee the price for 1, 2, or maybe 5 years. As such, the catalog prices are just a starting point for negotiation nowadays.

Q: Would you say Springer's pricing model is similar to its competitors?

A: Most of the main players have similar models now, although not identical. The principle is that where customers want paper and electronic, they pay a surcharge. If they then move to electronic only, the surcharge goes away.

Q: And customers pay a premium for backfiles?

A: Yes. Basically this means everything published prior to 1998. One of the first decisions we made when the companies were merged was to invest in digitizing everything that both companies have ever published, going back 160 years in the case of Springer. Work is in progress right now, and, as of early next year, we will start selling them as subject collections for a one-off payment.

Q: Another controversial pricing issue has been the introduction of the so-called Big Deal. As I understand it, this was a byproduct of the migration to electronic distribution, when it was decided to introduce a new "all you can eat" subscription model in order to offer customers unlimited access to all the publisher's journals for a fixed sum?

A: Right. The thing about electronic publishing is that the distribution costs are much lower. This means that you can give people a lot more access than they had in print. So yes, that was the genesis of the Big Deal, and the aim was indeed to provide a lot more for the same money.

Q: But the model has evolved over time?

A: Libraries started saying they didn't want everything, so we introduced limited Big Deals—subject collections and so on. Alternatively, where a library may subscribe to X number of journals in print and want electronic access to just those journals, we will agree [to] a deal to that for a fixed price for a certain number of years. So, a deal may no longer necessarily be that big: Actually, it can be as small as a customer wants.

Q: Ultimately libraries want maximum flexibility then?

A: Absolutely, and at Springer customers can now buy content by article, by journal, by subject collections, or they can buy the whole lot. And the principle is that the larger the quantity you buy, the lower the unit cost.

Q: Blackwell's managing director, Robert Campbell, recently argued that the Big Deal is on its way out. Do you agree?

A: No. The Big Deal has had some bad press, but in principle there is nothing wrong with it. There would only be something wrong if customers were offered no alternative but the Big Deal.

Q: Nevertheless, as these Big Deal contracts have come up for renewal, we have seen some very public cancellations from major universities like Harvard and Cornell. Why?

A: That's just market forces. When a contract comes up for renewal, customers will pretend they are not going to renew in order to put pressure on the renewal process. But, to my knowledge, eventually most, if not all, of these contracts are renewed. So it's not that customers don't renew. They usually negotiate a different content package or a different pricing level, and what we've seen is that some of that negotiation has been conducted via the press.

One problem we've found is that we can offer a library with, say, 200 journals a deal where they can get 1,000 journals for a little bit more than they paid for 200—which makes them very happy—but then 2 years later they come back and say they don't want all 1,000 anymore, and they ask for a discount. But that is not how it works.

Q: Surely, if they want to have fewer journals, it's right that the price should go down again?

A: There's no reason why they can't go back to 200 journals, or try to negotiate a new deal for 600 or 800 journals. The problem is that librarians often want to get a discount on a price they never paid in the first place.

Q: Last time we spoke [in 2002] you were skeptical about open access. Yet one of the first things you have done at Springer is to introduce a new author-pays option called Open Choice. Have you changed your views?

A: No. I haven't changed my views. I remain skeptical about people's ability to undertake the massive redirection of money flows—both within each single institution, and within every country—that open access requires. That is why I have always advocated providing greater access using the existing money flows. This offers a much faster, more efficient, and less risky way of adjusting the system in order to exploit the benefits of electronic publishing. And that is why I am still advocating the Big Deal, or variations of it. By paying a fixed amount, institutions get access to everything they could possibly want.

Q: So why have you introduced Open Choice?

A: What we are saying is: "Look. It's not that we don't want to change on principle; we've been advocating the traditional model simply because we thought it was practical. But if you want to try open access, and you can really organize yourselves in a different way, and the money starts to come out of a different pot, we are happy to change our internal procedures to accommodate you." So, with Open Choice, authors are now able to choose between publishing their papers using the traditional subscription model, or they can pay to have their work published so that anyone can read it at no cost.

Q: You have set the publication fee at $3,000 a paper. Critics say this is too high, that authors won't pay that much; and so, perhaps Springer is only going through the motions. Is Derk Haank really serious about open access?

A: As always, I am very serious—$3,000 is a very competitive price. Even open-access advocates would have to acknowledge that. The Wellcome Trust report, for instance, estimated the true cost of publishing a paper at more like $3,500.

Q: But if PLoS charges $1,500 and BioMed Central just $525, how can Open Choice be competitive?

A: Of course, we can't compete with heavily subsidized prices from new initiatives. In reality, however, it is they who are not competitive because they can't offer a brand name like Springer's. What we are offering is the best of both worlds. If you publish with a Springer journal you have always had a tried and trusted reputation; now you can have open access too.

Q: Open-access advocates also complain that since authors still have to assign copyright to Springer under Open Choice, it is not really open access that you are offering?

A: What we have tried to make clear in our new policy is that there is no principle difference between traditional publishing and open access—it is just a matter of who pays: the reader or the author. Personally, I couldn't care less. So the only thing we are going to change in our current process is whom we send the invoice to. Copyright transfer is a very efficient way of making sure that we have the commercial rights to exploit the articles. However, this is not intended to stop authors from doing anything reasonable with their articles themselves, including putting them on their own Web sites.

Q: One novelty of Open Choice is that you have linked its takeup with the price of journal subscriptions. How does that work?

A: The deal is that if from tomorrow the publication cost of all articles in a Springer journal were to be paid for by the authors, then the library price would be nil. If, on the other hand, say, 20 percent of the articles in a particular journal have been paid for by authors, then the subscription price will be 20-percent lower than it would otherwise have been.

Q: So every year you will go through each journal and calculate how many of the papers have been paid for, and then adjust the subscription on a pro rata basis?

A: Exactly. As the number of paid-for articles increases in a journal, so the subscription decreases.

Q: Clearly that would benefit library budgets. Do you think librarians will warm to the idea once they see those benefits?

A: I'm not sure. Librarians have very mixed feelings about open access.

Q: Certainly librarians and researchers are coming into increasing conflict over open access. This seems to be because while librarians' main concern is that they cannot afford as many journals as they want, researchers want to maximize access to research. So, librarians are more interested in new open-access journals, and researchers are more interested in self-archiving papers on the Web. The end goal may be the same—unfettered access to research—but it has led to considerable disagreement over strategy within the open-access movement.

A: Well, it is clear that the open-access debate arose because librarians were no longer able to afford to pay for everything their audience wanted to access. But the good news is that Open Choice kills two birds with one stone. Researchers who want people to be able to access their work without charge can pay to have it published; since this will also lower the cost of journal subscriptions, it will help librarians too. Moreover, Open Choice enables this to be done within the existing infrastructure, obviating the need for authors to turn to untried ventures, new brands, and unproven technology.

Q: Self-archiving advocates like Stevan Harnad, however, argue that it will take too long to achieve open access that way. They want open access now, and they believe that the quickest way to get there is for researchers to continue publishing with the Springers and Elseviers using the traditional reader-pays model, and then self-archive their papers on the Web. This, they say, will allow them to achieve the same endpoint promised by Open Choice, but without the need to pay anything to Springer, and far more quickly.

A: That is an option, but I remain convinced that offering their articles as part of a service from a publisher—which includes all the navigational tools and the packaging a publisher can offer—is in the best interests of authors. Most readers won't want to search all those Web sites to get what they want.

Q: Can you clarify Springer's current policy on self-archiving? Can authors archive Springer's final PDF file, or just their own file? And are they able to put it up both on their own Web site and in an institutional repository?

A: Essentially, our policy is the same as that announced recently by Elsevier. Authors can put the corrected version of their own article (their version, not Springer's) either on their own Web site or in their institutional repository. We also require them to put a link back to our PDF file.

Q: And can anyone link to the author's version?

A: We do not allow any linking for commercial purposes. We don't want someone establishing links in such a way as to bring together the entire article list and effectively replicate the original journal, for instance. If we allowed that, there would be no need to subscribe to our journals anymore!

Q: And do authors need to get approval on a case-by-case basis, or do they have blanket permission to self-archive?

A: There is now blanket permission.

Q: Self-archiving certainly got a boost from the recent inquiry into STM publishing by the U.K. Science and Technology Committee. Its main recommendation was that the U.K. government mandates all publicly funded researchers to self-archive their papers. What's your response to the report?

A: What I like about the report is that it acknowledges that it is too early to conclude that we need a completely new system, and that it is better to adjust the old one. As long as the debate continues along those lines, Springer is happy to participate in all kinds of experiments—as we have demonstrated with Open Choice.

Q: There have been a number of similar proposals in recent months. In July, the U.S. House of Representatives Committee on Appropriations recommended that NIH provide free public access to research articles resulting from NIH-funded research 6 months after publication. And in June, the E.U. followed in the U.K.'s footsteps, and commissioned a report into STM publishing in Europe. Open access is a hot issue right now, isn't it?

A: The EU initiative has a positive ring to it. They say they want to stimulate research and make funds available; at the same time, they want to make sure that the dissemination of those results is at an optimum. Who could be against that?

You know, what is striking to me is that open-access advocates think everybody is talking about it, but if you go to the grass roots, most of them don't know what it is, and most of them couldn't care less. In fact, our research shows that more than 50 percent of active authors haven't got a clue what open access is. The other half knows what it is, but says: "Over my dead body. I am not going to pay for other people to look at my research." I don't wish to diminish the open-access movement in any way; I just want to put it in perspective.

Q: There seems, however, to be an increasing emphasis on "mandating" authors to adopt open access. Another of the committee's proposals, by the way, was that the U.K. government investigates the feasibility of mandating publicly funded researchers in Britain to retain their copyright and only license their articles to publishers. Does that concern you?

A: It would be like using a cannon to kill a fly, and is simply not necessary. If people don't want to transfer copyright, we are happy to negotiate a license to have publishing rights. This is not a matter of principle for me: It is about practicalities. The point is, it would be very easy to agree to the copyright proposal and leave everything else unchanged. But the debate wouldn't go away because this is not about who has copyright; it is about who has access, and who is going to pay the costs.

Q: Here's a deeper question: Does Derk Haank believe that making all research literature freely available to anyone who wants it on the Web is a sufficiently desirable societal good in its own right [and] that we just have to make it happen?

A: It would be nice if we could achieve it, but I have always believed that it is much easier to make it widely available to the relevant audience by migrating from the current subscription model to a database license model. The trouble is that the issue has become more of a populist debate as to whether the public should be interested in the content of academic publishing.

What I object to is people taking the high moral ground on this question, signing declarations, and pointing at us as the bad boys, simply for defending the traditional way of publishing, with all its benefits and advantages. That is why I am sometimes a bit irritated by the open-access debate.

Q: This is purely a practical matter then?

A: Absolutely. This is not a black-and-white or clear-cut issue, and there are certainly no moral imperatives: It is just a matter of practicalities. My aim with Open Choice, therefore, is to provide authors with the opportunity to publish in this new way if they wish to. Until now, if you wanted to, you had to go to untried, unbranded new ventures, so this is the first real commercial test of the appetite for open access. Our message with Open Choice is simply this: "If you are really serious about open access, here is your opportunity to show it."

Q: Put up or shut up then?

A: Let them put their money where their mouth is. I am not saying that they are not going to do that, but the academic community now needs to show how seriously it wants open access. So, yes, it is now time for the open-access movement to put up, or go off and do something else.


Richard Poynder is a U.K.-based freelance journalist who specializes in intellectual property and the information industry. His e-mail address is
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