HBR Responds and I React

The HBR saga continues today with HBR responding both in the Financial Times and to me personally about some of the issues that have been raised this week. To recap, here are links to:

• My initial post
• My clarification
• My Financial Times article

The HBR response in the Financial Times today was written by the Associate Dean in charge of the publishing business, Professor Das Narayandas. It paints me as someone arguing that information should be free which, for anyone who has read my recent book published by Harvard Business, will know that I do not argue or believe that. Instead, I believe that information wants to be shared, something very consistent with my criticisms this week the HBR are not only violating academic norms but also not actually pursuing a good business model (of which I will say more in a moment).

The first point from Professor Narayandas is that they are facing market pressures common to all publishers:

We are not alone among publishers in trying to do this in a sustainable manner. Call it the innovator’s dilemma: On the one hand, we are in a moment in time where the learning environment is changing dramatically and increasing numbers of people believe all information should be free. But high-quality information – ideas that have been carefully crafted by authors and editors to make sense to managers and to achieve maximum impact – comes at a cost. Adding to our challenge is the fact that HBR is a unique publication, with multiple audiences that span research, teaching and practice. So how can we continue to develop outstanding content and broaden accessibility, all in a sustainable way?

Now I am not sure that that is the innovator’s dilemma as outlined by Harvard faculty but ignoring that, is what HBR is proposing to do a sustainable way of reacting to the pressures of consumers who increasingly do not want to pay for information. A case in point is the what I call platform siphoning that triggered the recent changes to HBR’s approach:

We discovered, though, that some institutions were using Ebsco access as a substitute for paying the normal course material fees. This summer, therefore, we designated 500 of the more than 13,000 HBR articles available in Ebsco – those most widely used in other schools’ curricula – as read-only and removed persistent linking to them. At the same time, we contacted schools and libraries to discuss institutional volume discounts. Any associated licence fees are not incremental or new; they simply shift the payment for these articles from the school to the library.

In this case, HBR have moved to charge more for information to those very consumers not less. They have not moved to reposition their content or to, as I advocate in my book, encourage more sharing that would increase its value. On the face of it, they are creating more incentives to avoid sharing that content — especially in teaching — by trying to force consumers into inconvenience. Specifically, they make their 500 most influential articles now ‘read only’ in libraries — meaning you have to ‘pay to recline’ — and they now cause schools to pay extra if they link to those holdings — again a form of convenience in sharing and curation.

Their expectation is that Schools will react to this by paying for the same HBR articles provided to students. But over the last week many faculty from both near and far have asked me what they should do. My response had been to really avoid pointing students to HBR articles unless it is really necessary. Is there another better Journal of Economic Perspectives or Academy of Management Review piece they can use which will not incur a charge? Or perhaps a chapter of a book that can be provided in course packs under copyright exemptions. My point being that demand curves slope downwards and I suspect HBR are going to learn that. Moreover, the fewer students who read HBR as students, the fewer will convert to long-term subscribers. Not the complete contrast here to other business related outlets that offer discounts to students to read their content! Without faculty recommendations, how many students are going to experience HBR and its claimed high quality content?

Now this post is moving dangerously towards “The Five Customer Relations Lessons Harvard Can Learn from its Pricing Debacle” (and yes I did flirt with writing it exactly that way and offering it to HBR as a post!) and, in many respects, history will teach those lessons more than me pontificating here. Instead, let me move to clarify matters. Professor Narayandas ends with:

We recognise that many faculty members, including some at HBS, are unaware of different distribution and pricing mechanisms for material that is used in different contexts. We clearly can do more to communicate this framework.

I thought that was interesting. HBR’s response had not actually disputed my claims as to what they were doing and I wondered, therefore, if there was a broader lack of clarity. To that end, I wrote to Professor Narayandas and asked him to clarify the behaviours that were now prohibited. Here are the behaviours and what I understand of the response: