Economics:
The Not-So-Hidden Costs
Joy Kirchner
ACRL Scholarly Communication 101:
Starting with the Basics
Learning Objectives
• Understand some of the basic economic realities of the
traditional scholarly publishing system
• Recognize the connection between authors’ copyright
management practices and monopolistic pricing in the
scholarly journal market
• Consider and reflect on alternative models & funding
sources for scholarly publishing
Pressure points
Publication (Registration
Creation
and Certification)
Editor
©
Dissemination
Academic
Library
cost
Publisher
Peer
Reviewers
budget
Who is publishing scholarship?
peer-reviewed journals
peer-reviewed articles per year
scholarly publishers (est.)
Journal publisher size guide
Petite (5 or fewer)
Small (6-10)
Medium (11-25)
Large (26-50)
X-Large (51-100)
XX-Large (100+)
54%
11%
16%
8%
4%
7%
Scholarly publishing practice: academic journal publishers’ policies and
practices in online publishing, 3rd survey, ALPSP, 2008
university presses
societies &
other nonprofits
commercial
publishers
Data from Simba Information 2010 publishing industry reports
STM sector
revenue in 2009
Profits are high, too
 Elsevier consistently reports profit margins
for its STM journals of ~ 36%
From an investment analysis by Deutsche Bank:
“We believe the publisher adds relatively little value to
the publishing process. We are not attempting to
dismiss what 7,000 people at REL do for a living. We
are simply observing that if the process really were as
complex, costly and value-added as the publishers
protest that it is, 40% margins wouldn’t be available.”
To maintain these margins,
prices must rise
2010 – academic journal prices rose 4.3%
(year budgets were, supposedly, worst)
2011 – Average increase was 5.5%
2012 – 6%
2013 – Projected average increase is 6-7%
Typical economy
Steel
Cars
Auto manufacturers
Steelmakers
$
Consumers
$
Gift economy
Article
Author
Publisher
$
P&T
Grants
Reputation
Prestige
Journal
Library
$
wholesale transfer of rights
©
creates scarcity/monopoly
Publisher
drives prices up
(inelastic market)
Libraries challenge
pricing power
Subsidizing journal start-ups
Canceling journals
Educating faculty authors
Forming consortia
Fighting mergers
Publishers try to
sustain revenue flow
Tying print to online
Bundling journals
Requiring multi-yr contracts
Buying other publishers
Raising prices
Cost to produce one journal article
Average journal
article
Average journal
article
My Facuty, PhD
My Facuty, PhD
XYZ Commercial
Publisher
ABC Not-forProfit Publisher
Amsterdam, London, New York
Roger Clarke, The cost profiles of alternative approaches to journal publishing, First Monday, 3 December 2007
Economics of quality?
C. Bergstroms & T. Bergstrom
www.econ.ucsb.edu/~tedb/journals/jpricing.html
9% $
62%
citations
91%
dollars
38%
citations
The cost of knowledge -- what do others pay
PRICE Per
Title:
• Elsevier - $784
• Wiley -$665
• Springer - $1519
• Sage -$401
So how good a deal is the “Big Deal”?
Bergstrom compared 2009 prices paid by large research
universities based on cost per ISI citation and per article:
– Elsevier’s Freedom package
– Packages offered by major professional societies
AltMetrics for library collection
development?
BUNDLE
Per Cite
Per Article
Elsevier (U. Mich)
$3.60
$15.16
Am. Biochem. Soc.
$0.20
$0.95
Am. Physical Soc.
$0.45
$1.10
Am. Soc. Microbiology
$0.45
$1.20
Oxford U Press
(Colorado)
$0.55
$2.15
Am Chemical Soc. (U
Mich)
$0.65
$2.85
Am Geophysical Union
$0.90
$2.65
IEEE
$1.05
$2.25
Am Medical Assoc.
$1.05
$5.90
UC Value experiment
UC Value-‐Based Pricing
Strategy: 2007“How can we establish, validate
and communicate an explicit
method for aligning the purchase
or license costs of scholarly
journals with the value they
contribute to the academy and
the costs to create and deliver
them?”
http://libraries.universityofcalifornia.edu/cdcval
uebasedprices.pdf
New value metrics?
A growing directory of noteworthy
altmetrics tools:
http://altmetrics.org/tools/
Total-Impact
Total-Impact is a Web-based application that makes it easy to track
the impact of a wide range of research artifacts (such as papers,
datasets, slides, research code). The system aggregates impact data
from many sources, from Mendeley to GitHub to Twitter and more, and
displays it in a single, permalinked report.
ReaderMeter
ReaderMeter is a mashup visualizing author-level and article-level
http://chronicle.com/article/As-ScholarshipGoes-Digital/130482/
The Cost of Knowledge – the Elsevier
boycott
• Over 11,000 signers on May 4; growing daily
• Reaction to prices and lobbying to prevent
public access to scholarship
• Expression of frustration FROM THE
SUPPLIERS!
• Many asking what to do next.
• Harvard Library Advisory Board memo to
faculty may offer a path
• Promotion & Tenure system
• MLA Guidelines for evaluating Digital
Humanities & Digital Media.
Scholarly communications
reform includes efforts to
establish balanced,
sustainable economic
models
Long-term solution may
include shifting of library
funds from collecting to
producing or subsidizing
scholarly content
Questions?
Comments?
This work was created by Lee Van Orsdel for the ACRL
National Conference, Scholarly Communications 101
Most recently updated by Kevin Smith & Joy Kirchner
June 11, 2012.
It is licensed under the Creative Commons AttributionNoncommercial-Share Alike 3.0 United States License.
http://creativecommons.org/licenses/by-nc-sa/3.0/