PowerPoint Presentation

Joy Kirchner

ACRL Scholarly Communication 101: Starting with the Basics

Economics:The Not-So-Hidden CostsOverview of economics of scholarship and the quest for sustainable solutions1Learning ObjectivesUnderstand 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 publishing2costAcademicLibrarybudgetPublisherEditorPeer ReviewersCreationDisseminationPublication (Registration and Certification)Pressure pointsSo we find ourselves under tremendous pressure to cope under a system that is highly dysfunctional.CLICK to remove boxesAs librarians, there are three pressure points we need to understand and to explain to our constituents. All related to economic effects on the market in which published scholarship IP Rights: Enlightened management of IP rights by authors is critical to creating a more sustainable system. When authors give all their copyrights to publishers, they give publishers the ability to create scarcity, which translates into very high prices for those who want access.

Price: The cost of scholarly journals is out of sync with libraries ability to pay. We have to learn to say NO, and our institutions have to understand that until they regain control of their scholarly outputs, we will remain at the mercy of a small group of high-pricing publishers.

3) Access: Price is a barrier to access and a barrier to discovery. Whenever the intellectual output of our institutions is locked behind toll gates, our ability to find cures, grow economies through invention and discovery, and solve societal problems is compromised. 3peer-reviewed articles per year24,000peer-reviewed journals1,500,0001,800+scholarly publishers (est.)Who is publishing scholarship?Beginning with an overview of who is doing what in the area of scholarly journal publishing4Journal publisher size guidePetite (5 or fewer) 54%Small (6-10)11%Medium (11-25)16%Large (26-50) 8%X-Large (51-100) 4%XX-Large (100+) 7%Scholarly publishing practice: academic journal publishers policies and practices in online publishing, 3rd survey, ALPSP, 2008Scholarly Journals Market The vast majority of publishers publish 10 or fewer journals65%On the other end of the spectrum, the 3 largest publishers (Elsevier, Springer & Wiley) account for 43% of all scholarly articles; each publishs 1,500 to 2,000 journal titles!5societies & other non-profits university pressescommercial publishersMost, if not all, journals are published by one of these three types.

Some society publishers act like commercial publishersACS is a good example

One growth strategies for publishers is to attract established journals from societies with the offer of higher revenue to that subsidize the society and its other activities.

Case in point is Wiley: Acquisition of Blackwell, which had held highest number of society publications; movement of American Anthropological Association journals from University of California Press

6$ 20.3 Brevenue in 2009STM sector$ 2.4 BSSH sectorData from Simba Information 2010 publishing industry reportsScholarly Publishing Market System generates billions in revenue, heavily weighted to STM side:Almost 89% of revenue, over 20 billion in scholarly journal publishing is made by STM12% made by Social Sciences and Humanities

7Profits 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 wouldnt be available.8To maintain these margins, prices must rise2010 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%Figures come from latest Library Journal pricing survey.

Even during 2010, which was supposedly a time of retraint, prices rose faster than inflation. And since then the trend is for an ever larger percentage increase each year9

SteelmakersAuto manufacturersConsumersSteel$Cars$Typical economyRoot of the problem is disconnect between typical market economics and the market for scholarlship

In a typical market, there is reciprocity between suppliers, producers and consumers. Both steel makers and auto manufactures have strong incentive to price according to demand and to keep desire for profits in a balance with price the consumer will pay.10AuthorLibraryJournalArticlePublisher$$Gift economyP&TGrantsReputationPrestigeSScholarly publishing is a different, odd system

Authors, who are the suppliers in this system, are rewarded through a separate system altogether (click for shapes); Two separate economies at work here! Prices can rise freely since the suppliers (authors) suffered no adverse consequence.

Publishers are under no pressure from suppliers to control costs (since they are not paying for their product), and, because of the copyright monopoly, they can charge their consumers (mostly libraries) artificial high prices due to lack of competition. 11Publisherwholesale transfer of rightscreates scarcity/monopoly

drives prices up(inelastic market)When authors give all their copyrights to publishers, they give publishers the ability the benefit of artificial scarcity, which translates into very high prices for those who want access.

Need for better management of IP rights by authors, not merely to put a check on rising prices, but to restore some of the incentive purpose of copyright to scholarly authors. Loss of control over work

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Libraries challenge pricing power Publishers try to sustain revenue flow Tying print to onlineBundling journalsRequiring multi-yr contractsBuying other publishersRaising prices

Subsidizing journal start-ups Canceling journalsEducating faculty authorsForming consortiaFighting mergers13The Battle over sustainability Publishers want to preserve their revenues, naturally, while libraries recognize that something has to give. Looking for creative solutions that are more sustainable.

Let me be clear. We sometimes hear challenges to new models of publishing or disseminating scholarship that they are not sustainable. I think that the figures we have looked at suggests that, whichever new models may survive the test of time, it is the traditional model that most obviously cannot be sustained.Roger Clarke, The cost profiles of alternative approaches to journal publishing, First Monday, 3 December 2007Cost to produce one journal articleAverage journal articleXYZ Commercial PublisherAmsterdam, London, New YorkMy Facuty, PhDAverage journal articleABC Not-for- Profit PublisherMy Facuty, PhD$ 730$ 3,400DIFFERENCE IS OVERHEAD CARRIED BY COMMERCIAL PUBLISHER: MARKETING, SALES FORCE, PROFIT MARGINHIGHER COST RESULTS IN HIGHER PRICE; IS THE HIGHER PRICE CAUSED BY HIGHER VALUE IN MARKET OR BY PRESSURE TO COVER MORE EXPENSIVE BUSINESS MODEL AND RETURN EVER HIGHER PROFITS TO STOCKHOLDERS? EVIDENCE SUGGESTS THAT PRICE AND VALUE DO NOT NECESSARILY TRACK TOGETHER

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9% $91%dollars62%citations38%citationsEconomics of quality?C. Bergstroms & T. Bergstromwww.econ.ucsb.edu/~tedb/journals/jpricing.html

IF YOU USE CITATION PATTERNS TO JUDGE VALUE OF A JOURNAL, an early study (2004) by Carl and Ted Bergstrom showed that JOURNALS FROM COMMERCIAL PUBLISHERS TAKE 91% OF OUR BUDGETS BUT YIELD ONLY 38% OF CITATIONS.CONVERSELY, WE SPEND ONLY 9% ON JOURNALS FROM NON-PROFIT PUBLISHERS THAT GET 62% OF THE CITATIONS. DISCONNECT BETWEEN VALUE AND COST. ONE INDICATOR THAT OUR MARKET IS DYSFUNCTIONAL. *****THE COMBINATION OF AUTHOR INDIFFERENCE TO COST AND PREFERENCE FOR STATUS TITLES/PUBLISHERS HAS GIVEN TREMENDOUS PRICING POWER TO COMMERCIAL PUBLISHERS LIKE THE BIG FIVE******

15The cost of knowledge -- what do others pay

PRICE Per Title:

Elsevier -- $784Wiley -- $665Springer -- $1519Sage -- $401

ARL has asked libraries not to sign NDAs in vendor contracts; public universities must disclose prices paid for goods and services.Knowing what other institutions pay helps libraries push back against big deals and seek price breaks.

16So 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:Elseviers Freedom packagePackages offered by major professional societies

Ivy Anderson of CDL has done a lot of work using negotiating from the standpoint of aligning purchase of license costs to the value they contribute to the academy.

She also calculated how many CDL articles were written by CDL faculty and tried to negotiate from that standpoint of CDL authors contributions should reduce the cost of the licensed material. Somewhat successful but an interesting approach.17AltMetrics for library collection development?BUNDLEPer CitePer ArticleElsevier (U. Mich)$3.60$15.16Am. Biochem. Soc.$0.20$0.95Am. Physical Soc.$0.45$1.10Am. Soc. Microbiology$0.45$1.20Oxford U Press (Colorado)$0.55$2.15Am Chemical Soc. (U Mich)$0.65$2.85Am Geophysical Union$0.90$2.65IEEE$1.05$2.25Am Medical Assoc.$1.05$5.90This chart comes from Bergstroms presentation at the ARL membership meeting in Montreal on May 3, 2011. It offers another way to assess the value we get for our money, by asking not only how much a bundle costs per title, but also how much it costs per citation that arises from the material licensed in that bundle.18UC Value experimentUC 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/cdcvaluebasedprices.pdf

Ivy Anderson is the Director of Collection Development and Management at the California Digital Library, where she oversees a broad range of shared collections activities encompassing licensed content

Ivy Anderson of CDL has done a lot of work using negotiating from the standpoint of aligning purchase of license costs to the value they contribute to the academy.

She also calculated how many CDL articles were written by CDL faculty and tried to negotiate from that standpoint of CDL authors contributions should reduce the cost of the licensed material. Somewhat successful but an interesting approach.

19New 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 statistics based on the consumption of scientific content by a large population of readers. Readership data is obtained via the Mendeley API. Reports are available both as HTML and in a machine-readable version as JSON and are released under a CC-BY-SA 3.0 license.http://chronicle.com/article/As-Scholarship-Goes-Digital/130482/

Our IRs also provide metrics.20The Cost of Knowledge the Elsevier boycottOver 11,000 signers on May 4; growing dailyReaction to prices and lobbying to prevent public access to scholarshipExpression of frustration FROM THE SUPPLIERS!Many asking what to do next.Harvard Library Advisory Board memo to faculty may offer a pathPromotion & Tenure systemMLA Guidelines for evaluating Digital Humanities & Digital Media.Libraries are no longer in this alone. Prices, and rights issues, now have gotten the attention of scholars, the higher ed press and even legislators.

Lots of things are happening. Lots of experiments in new approaches and increasing pressure on the traditional model.

Libraries need to stay informed and agile, ready to adapt to the only thing that is surely inevitable -- change21Scholarly communications reform includes efforts to establish balanced, sustainable economic modelsCancellations continue, but many new experiments going on, point to sustainable solutions. Many are driven now by the scholars themselves, and the role of scholarly communications offices in libraries is often to offer support and expertise to the new things are faculty members are trying.22Long-term solution may include shifting of library funds from collecting to producing or subsidizing scholarly contentSo we start now growing CAPACITY for those activities, which is the focus of our remaining time together.23Questions?Comments?24This 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 Attribution-Noncommercial-Share Alike 3.0 United States License. http://creativecommons.org/licenses/by-nc-sa/3.0/

25Bergstrom costvcites0.910.090.380.62

CommercialNon-ProfitAn Economics Journal Collection:Cost and Citation Comparisons

Sheet1Percent of CostPercent of CitationsCommercial91%38%Non-Profit9%62%

Sheet2

Sheet3