Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Enshittification — the phenomenon of companies degrading their own products in the pursuit of profit — has reached the ivory towers of academia. Publishers of scholarly research are inundated with papers, an increasing portion of which are of patchy quality.
AI-penned articles are flooding in: submissions to one major academic journal are up more than two-fifths since Chat GPT appeared four years ago. Trying to sort wheat from a mountain of chaff has increased costs for publishers, both in terms of technology and human reviewers. Elsevier, for example, has increased its reviewers by more than a third to 1.9mn since 2022.
That, plus fears that in the future every possible bit of knowledge will be spat out by Claude and its ilk, has dented share prices. Shares in Springer Nature remain below the €22.50 they were issued at two years ago. Mergers could help by creating savings that offset the increased costs of quality control.
The industry's biggest four groups account for two-fifths of articles published. That leaves plenty of scope to roll up the unwieldy long tail that includes university publishers and professional organisations such as IEEE. There have been a few smaller transactions so far, such as Wiley's £337mn acquisition of Emerald Publishing in June.
But Informa's decision earlier this week to separate Taylor & Francis from its live events business may give dealmakers a boost. Private equity can help, having already dipped a toe into the sector: Springer Nature was previously owned by companies including EQT and BC Partners. And the financials still look attractive.
For players such as Elsevier and Taylor & Francis, this is a cash-generative business boasting top-line growth of about 4 to 5 per cent and operating margins between 30 and 40 per cent.
Source: Financial Times Companies · Summarized by HeadlinesBriefing