In a post entitled "Is scientific publishing about to be disrupted?", quantum information theorist Michael Nielsen describes what he thinks is a general explanation for why businesses and industries fail, and goes on to draw an analogy between the newspaper industry and the scientific publishing industry. Although the post is well written and highly entertaining, (I find his discussion of "immune systems" particularly delicious) I find part of his analysis to be even worse than a spherical cow approximation- he's trying to study milk production by analyzing the spherical chicken! Let me explain.
Nielsens "spherical chicken" is illustrated in this graph from his blog:
In the graph, he plots some sort of measure of success versus some sort of configuration parameter that presumably could be tuned to turn the New York Times into TechCrunch, or vice versa. He goes on to say that
The problem is that your newspaper has an organizational architecture which is, to use the physicists’ phrase, a local optimum. Relatively small changes to that architecture - like firing your photographers - don’t make your situation better, they make it worse. So you’re stuck gazing over at TechCrunch, who is at an even better local optimum, a local optimum that could not have existed twenty years agoThe problem with this analysis is that TechCrunch is completely immaterial to the difficulties that the newspaper industry is undergoing. The financial health of the New York Times and the newspaper industry is not being undermined by news blogs, it's being undermined by non-news sites such as Craigslist, Zillow, and the internet as a whole. Craigslist has focused on classified ads, and only classified ads, and unburdened by the expense of producing the rest of a newspaper, it is able to provide a much more effective solution for the classified advertiser. Zillow has done the same thing in the real estate advertising category. Another big revenue source for newspapers is display advertising to consumers. But nowadays, when someone wants to buy something or find a service, their first thought is to go directly to the internet. Want to find when a movie is playing? You used to pull out a newspaper, now you go to the internet. A company like BestBuy used to communicate with customers through newspaper ads; while they still do so to some extent, the internet allows them to communicate directly with consumers through their web site. None of the newspapers' real competitors are in the news business at all, and there is no configuration parameter of any sort that could be tuned to transform the New York Times into Craigslist.
The news industry's core problem is not, as Nielsen suggests, their inability to adopt disruptive technologies, but rather the disintegration of the linkage between their main activity and their revenue streams. In the past, good news would attract readership, and readership would attract advertisers. The biggest difficulty for newspapers today is not so much the loss of readership, it's that advertisers now have many more ways to connect to that readership. In applying the lessons of the newspaper industry to the evolution of the scientific publishing industry, it's the stability of activity-revenue linkage that needs to be closely examined.
Even a cursory look at the scholarly publishing industry reveals a very different situation from that of the newspaper industry. First of all, there is much more business-model diversity in scholarly publishing. There are huge companies like Elsevier competing with cottage companies which produce a single journal. There are large non-profit societies such as the American Physical Society that produce extremely cost effective journals and who make much of their content available for free. There are journals that have long survived primarily on advertising and journals that have long survived primarily on society member dues. There is also a lot of experimentation with business models going on, including author-paid open access publishers, and mixed "open choice" business models. This business model diversity gives scientific publishing industry robustness against the prospect of any one business model being severely disrupted. In addition, the transition to digital delivery which is giving the newspaper industry such difficulty is to a significant extent already being accomplished in the journal publishing industry.
The scientific publishing industry does have a similar activity-revenue linkage problem that it needs to pay attention to. The people who write the biggest checks to scientific publishers are institutional libraries. But scientific journals, for the most part, do not cater to libraries, they cater to author communities, because the biggest determinant of a scientific journal's success has been the quality and quantity of articles it is able to attract. As long as libraries continue to be attracted to the authorship attracted by journals, and continue to attract the institutional funding they need to support their subscription, the biggest revenue stream for scientific publishers will be secure. But suppose that institutions start deciding to outsource their libraries or begin to require researchers to directly fund their journal subscriptions? Or suppose that libraries are successful in attracting authors directly into open-access institutional repositories?
A better analogy from physics for the scholarly publishing business might be the polaron. A polaron is the combination of a particle and interactions with the environment that it moves in, and the combination has a mass significantly larger that the "bare" particle moving on its own. In the case of the scientific publishing business, the interactions with its environment include the way tenure committees rely on the prestige of a journal that has published a candidates work, or the way accreditation boards require libraries to subscribe to certain numbers of journals. The polaronic industry thus gains mass and inertia, allowing it continue longer than it might otherwise do. Computer operating systems work in the same way- they induce the creation of third party software that interact with the operating system and thus increase its mass and inertia in the market.
Strongly interacting polarons can distort their environments so much that the become trapped by their cloud of interactions- think of a celebrity trying to walk though a crowd of fans. For a business this can be a fatal situation if objectives change, and there is no possibility to adapt.
How's that for a spherical cow?