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  • The Uncomfortable Calculations of Publisher-Library Relations

    The System as It Stands

    A study published in July 2014 used the Freedom of Information Act to request access to contracts between academic publishers and 55 university and 12 consortia of libraries (Bergstrom 2014). 360 contracts were received, documenting prices and bundling of deals from 9 major publishers (including Elsevier, Springer, Wiley, ACS, and Oxford University Press).

    The contracts show the result of opaque sales practices, manipulation, and varying degrees of negotiation skill: publishers can charge vastly different prices for the same products and services. Keep in mind they are selling to nonprofit institutions whose members

    • conduct groundbreaking and lifesaving research (often taxpayer-funded)

    • volunteer their time and talent to the publishers’ peer review process

    • pay for the submission of articles published in journals

    • and are now buying it all back.

    Also keep in mind that top publishers have profit margins on the order 30% or more.

    In the mid 1990s, with the shift from print-only to digital distribution, economic formulations changed. No longer would a research university need to subscribe to multiple copies of in-demand journals. No longer would storage space play a significant role in decisions (e.g. storage and maintenance costs for a 2500 page journal volume range from $300-1000). No longer would impact be a limiting factor for purchased titles, or as it’s now emerging, should it even be. And publishers could now offer their whole catalog of journals at one discounted “Big Deal” price. In the words of Derk Haank, then Elsevier and current Springer CEO:

    But what it [electronic publishing] does do is to dramatically lower the marginal costs of allowing access.... [The cost for each new users] is virtually nil and that means that we should be more creative in the business model.... where we make a deal with the university, the consortia or the whole country, where we say for this amount we will allow all your people to use our material, unlimited, 24 hours per day. And, basically the price then depends on a rough estimate of how useful is that product for you; and we can adjust it over time. [emphasis added]

    Here, “adjust it over time” means mandate an average 5-6% price increase annually. Bergstrom, et al calculate:

    “A bundle whose price increased by 5.5% per year would double its price between 1999 and 2012, whereas over the same period the US consumer price index rose by 38%.” [emphasis added]

    What’s more, such “creative” business models force library administrators to try to quantify abstractions like the value of information. Information, however, is context dependent. The difference of opinion on a paper’s importance could range from “meaningless” to a critical insight for unraveling a disease pathway.

    At the end of the day, an all-inclusive “Big Deal” bundle may be easiest – if funds are available. When cost limits access, however, researchers may rely on e-mailed PDFs from helpful colleagues at better-equipped campuses. Another solution, when access is out of reach or publication slow (e.g. a year from initial acceptance to publication is common for some Statistics journals), is pre-print repositories like arXiv. Unfortunately, the articles aren’t peer-reviewed, a reason big publishers can charge so much.
    This is also a reason we think researchers (and journals!) might want to try their own pilot study of Authorea-as-interactive-repository or submission platform.

    This is the 21st Century, scientists should be writing and disseminating like it!

    Have thoughts about this? Let us know in the Comments or follow us to get updates!

    References

    1. T. C. Bergstrom, P. N. Courant, R. P. McAfee, M. A. Williams. Evaluating big deal journal bundles. Proceedings of the National Academy of Sciences 111, 9425–9430 (2014). Link

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