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Not so quiet on a Western front1

In negotiations with Reed Elsevier, the University of California libraries recently held out over a license to selected titles in its Science Direct package until a price was agreed that allowed, at least temporarily, the arrest of the spectacular inflation in price over the past few years2. This experience has been illuminating to me as a university administrator and a librarian, and informs my thinking on the economics of scholarly publishing set out below.

I believe that the business model of commercial publishing, which once served the academy's information needs, now threatens fundamentally to undermine and pervert the course of research and teaching. Put bluntly, the model is economically unsustainable for us. If business as usual continues, it will deny scholars both access to the information they need and the ability to distribute their work to the worldwide audience it deserves.

Familiar data support this claim. Last September, the investment bank Bear Stearns issued an 'outperform' rating for Elsevier's stock, highlighting the company's profitability with reference to a graph showing that demand for scholarly journals was 'inelastic', an economic term which means that demand is not substantially affected by either price increases or decreases3.


Shareholders will no doubt have both eyes on the steep curves showing how academic libraries' spending on journals kept pace with increases in subscription prices each year from 1986 to 2002 - increases four times higher than the consumer price index rate of inflation. Journal subscription prices rose 227% over that 16-year period, whereas the consumer price index (CPI) rose by just 57%.

Scholars, librarians and others more interested in the future of the academy than in publisher's share prices, should take a hard look at the fairly flat line showing that despite the explosion in the number of new journals, libraries did not buy many more titles in 2002 than they did in 1986. The academy is paying more each year to access a steadily declining portion of the scholarship and knowledge that it creates.

The problem is now attracting attention. A parliamentary select committee has been convened in the UK to investigate scholarly journal pricing in science, technology and medical (STM) fields4. In its testimony to the committee, the publishing industry has acknowledged that a problem exists, but the solution it proposes, however, is tainted by a hubris fed by greed.

The testimony given by Elsevier's CEO, Crispin Davis, is exemplary. It could be paraphrased perhaps as something like: 'Our business model is fine; the problem is there isn't enough funding available through library budgets to sustain it. The solution accordingly involves strategies for enlarging the company's revenue streams by expanding their share of the libraries' collection budgets and by tapping new sources within universities and within the government, philanthropic, and corporate entities that invest so extensively in research'. If only the directors of Global Crossing and WorldCom had been so visionary.

The tenor of Davis's testimony will not be unfamiliar to those who have listened patiently to negotiating teams sent along by commercial publishers to explain the benefits inherent in the so-called 'big-deal; price bundling, where journals titles can be had at deeply discounted prices but only if acquired as part of a package or bundle of journal titles. The details are mind-bogglingly complex and vary from one publisher to the next. One real-life example, however, illustrates the most significant difficulty that libraries are likely to encounter, but also a possible way through them. At first blush, the wholesale volume discount is attractive. One might argue that it was also an efficient means of moving libraries and publishers from print to electronic formats at a time before the market for electronic journals had found its footing or its price points.

But by 2003, it had become a debilitating drain on scarce collection resources. In that year, the libraries of the nine University of California campuses subscribed as a single system to nearly 1,200 Science Direct journal titles for a single price of nearly US$8,000,0005. When negotiating access for 2004 and beyond, the system was faced with a stark choice: continue subscribing to the database at an annually incremented rate (in 2003, Elsevier advertised to libraries that it would seek a 6.5% annual price increase for 2004) or subscribe selectively to titles at a non-discounted rate. However, the non-discounted rate was set in a manner that can only be described as punitive.

According to our best estimates, at an unbundled rate, the UC libraries would have had to curtail access to 40% or more of the titles subscribed to in 2003 before any real savings could be made on the $8,000,000 big-deal subscription cost. In the end, the parties were able to identify a third way: a selected title list at a discounted rate and the right, annually, to swap titles in and out of the subscription. Though one may question the price and the value it returns to the University of California, the deal itself is significant insofar as it represents a pathway through a difficult issue; one which, through its evolution, may afford universities, and the publishers they rely upon, the information access and financial revenues that they respectively enjoy a right to expect.

Not-for-profits, not so innocent

Scholarly journals, produced largely by not-for-profit learned societies cost far less than those produced by commercial publishers (see Table 1)6.

Table 1


However, these data mask as much as they reveal. Just as not all commercial journals are exorbitantly priced, non-profits are not uniformly reasonably priced. For the University of California at least, Nature - published by the commercial company that sponsors this free on-line forum - is far less expensive than its society - produced counterpart, Science.

The data also obscure the fact that since at least 1988, subscription price increases for non-profit society journals, at least in STM, are not far off those for commercial ones7. Although society journals are starting out cheaper, they are racing along a trajectory towards the same breaking point that we have already reached with some commercial ones (see Table 2).

Table 28


We recognize that academic societies play a much wider and valuable role in fostering research and learning. We also appreciate that there are substantial costs associated with transitioning printed publications to electronic formats, and that this transition can itself lead to losses of advertising and possibly even membership revenues.

But when, by whom and according to what logic, have some societies decided that academic libraries should bear such a large burden of those costs? Why do not more academic societies - which after all, are creatures of the academy, governed by its members - show more of the innovation and leadership that the academy sorely needs to place scholarly publishing on a viable footing?

We applaud the American Physical Society's (APS) decision not to require its journals to generate profit for the society's other worthy activities, and for its full and public disclosure of its journal production details. We admire the European Economics Association for taking a principled stand against high subscription prices, by switching to a new publisher9. And we admire the societies, too numerous to mention, that forego lucrative contracts with commercial publishers in part to keep their journal prices down.

We encourage those societies that have decided instead to follow the path of unacceptable rates of journal price inflation, to think hard about its impacts and long-term sustainability. Grasp the nettle of this historic opportunity and uphold, defend and promote the interests of the professions that are your lifeblood and the academic enterprise with which you are so closely associated. At a minimum, explore new ways of generating society revenues in the certain knowledge that income derived from publications cannot be sustained at its current level. In this respect, we watch with interest as the American Council of Learned Societies partners with several societies and university presses to explore new modes of monographic publication, as the American Anthropological Association builds online 'portal' services that promise to 'bring 100 years of anthropological material on-line to scholars and the public', and as the Mathematical Association of America investigates on-line mechanisms for supporting mathematical education (at all levels) while sustaining the Association10.

Before we throw in the towel and concede that large commercial STM publishers have created a black hole of a business engine so powerful as to draw all comers into its wake, we urge more academic societies to adopt a longer-term and more civic-minded view.

Open minded on Open Access

We are at once amused and disturbed by the debate over the strengths and weaknesses of Open Access publication. Of course questions surround this new enterprise:

  • Will author charges sustain high-quality peer reviewed publications? Perhaps not. But surely the combination of uncertainty and hope associated with this unproven model is vastly superior to the certainty and hopelessness that surrounds the current and failed commercial one. Furthermore, is it not likely that the Open Access model will evolve as much or more than the one(s) it seeks to replace? Looking forward, can we not see it floating, perhaps in a slightly altered state, on a confluence of revenue streams that combine, for example, author fees, institutional memberships (perhaps paid as reasonably priced subscriptions), as well as any funds derived from a new generation of value added (aggregation or other) services? Can we not see Open Access publishers fundamentally rethinking the scholarly communication process, and in so doing coordinating but self-consciously decentralizing production processes in order cost-effectively to leverage the extensive but institutionally distributed authoring, editing, archiving and dissemination capacity that exists across all of higher education? In this regard, is it not more appropriate to view the current Open Access business model as a starting point and catalyst for change rather than as a static form?
  • Will the model work outside a small number of scientific disciplines? It may not, but should we not be encouraging various approaches, so long as each meets a range of agreed criteria concerning, for example, quality (peer review), price, facility of production, accessibility, interoperability and persistence? Should we not concentrate our intellectual efforts and our rapier wits, respectively, on evolving and debating the criteria and the range of options that meet them, rather than on fighting over one-fits-all models?
  • Will Open Access publishers guarantee the integrity and persistence of the scholarly record they help to create and disseminate?Our guess is that they will fare no worse than subscription-based entities, and probably better, as debate over terms and conditions of access will not hinder or kill every archiving initiative as has so often happened in ventures involving subscription-based publishers. Indeed, Open Access publishers may find the means of digital preservation more readily at their fingertips than commercial publishers. Anyway, as the University of California libraries build their digital preservation programme, they are thinking long, hard and carefully about how and where to expend their scarce digital preservation resources. Where online scholarly journals are concerned, two paths are readily apparent. Along one, we would focus our effort on the journal publishers that consume the most subscription dollars in return for the largest number of subscribed titles (e.g. (Elsevier, Wolters Kluwer, Springer and John Wiley). Along the other, we would hold the larger publishers robustly to worded licensing agreements that guarantee our persistent access to subscribed content. This would allow us then to make our digital preservation capacity available at no cost to Open Access and reasonably priced journal publishers, thereby giving them a small competitive edge. Although our deliberations have only just begun, it is clear that digital preservation resources are like acquisition dollars. They are among the very few tools we have to exercise some modest influence over the market place, by rewarding with our investment decisions those publishing models that appear to be more sustainable than others. However these questions are answered, it will only be through practical experience and trial and error. The trial has begun. What a pity for us - what a plum for the commercial publishers whose practices we seek to change - that it has provoked distracting and intensely secular battles over whether or not the model is itself the holy grail that our troubled community longs for but knows cannot exist.

The empire strikes back

Concern about the economics of scholarly publishing is no longer a special or local interest. Faculty and university administrators' concerns, once a trickle, have recently swollen into a flood. Detailed information about publisher pricing models and their impacts are now eagerly consumed on college campuses. Without exception they provoke a single response of shock and awe over:

  • publisher profits where these are deemed to be: excessive, significantly out of line with production cost increases, or built up unduly on intellectual property that is contributed in some large measure on a volunteer basis;
  • price increases measured in multiples of the CPI rate of inflation and justified by increases in the number of papers, pages, editors and rejection rates but without reference to the marginal costs of production or to the level of publishers' revenue and profit growth;
  • stock-analysts' estimates that see publisher profits continuing to rise because the market for them is 'inelastic' - a polite way of saying that the academy is unable to curb its voracious appetite for information or to make any progress in finding alternatives; and
  • the apparent unwillingness of some leading scholarly societies to break the mould and provide leadership in the quest for mechanisms that would reassert the Academy's control over its own research.

Concern has been translated into demands upon libraries to reveal more about the market for scholarly publications, its dynamics, and the behaviour of its players; to disclose what really goes on behind the scenes, as it were, to enable faculty and students to connect instantaneously to what then seems to them a world of barrier - free online information.

That same concern has been translated into statements of outrage and demands for action. At the University of California it was a combination of efforts that moved negotiations between its library and Elsevier beyond impasse, and tilted the balance in the university's favour11. Individual faculty, and faculty Senate, threatened to boycott Elsevier journals as authors, editors and reviewers. The university's senior administration took principled stances, refusing, for example, to deal campus-by-campus with Elsevier should it fail to reach satisfactory terms on a system-wide basis.

We note the extent to which similarly principled statements of faculty and institutional resolve are associated with recent dramatic changes in library buying habits, for example, at Cornell, at Harvard, in the Research Triangle and elsewhere. And we take interest in the fact that these changes within the academy appear to be one of perhaps several influences exerting a downward pressure on one thing of which we know commercial publishers will take notice: their share prices.

And so these are perhaps the most revealing lessons that we have learnt from our recent experience. The unsustainable economics of scholarly publishing is not a problem for academic libraries but for the academic institution of which they form a part. When addressed as such, it can and may be solved.

Daniel Greenstein

Associate Vice Provost, Scholarly Information, University of California; University Librarian, Systemwide Library Planning and California Digital Library


  1. This article has benefited enormously from sage and expert input form Catherine Candee, Beverlee French and John Ober. The author takes full responsibility for its content.

  2. See http://libraries.universityofcalifornia.edu/news/facmemoscholcomm_01070.pdf

  3. The graph, based on data prepared by the Association for Research Libraries is published in Bear Stearns' European Equity Research 'Media: report on Reed Elsevier', 29 September 2003. The data, along with other information, are presented in a set of PowerPoint slides

  4. See House of Commons, Minutes of Evidence Taken before Science and Technology Committee. Scientific Publications. Monday 1 March 2004. Cf. 'Elsevier's comments on evolutions in scientific, technical and medical publishing and reflections on possible implications of Open Access journals for the UK' (February 2004)

  5. The formula, not atypically was based on the number of Elsevier print subscriptions maintained by the nine campuses when the University of California moved as a system to an on-line subscription.

  6. Bergstrom, C. T. & Bergstrom, T. C. The economics of scholarly journal publishing. (2002).

  7. See Kean, G. 16th Annual Study of Journal Prices for Scientific and Medical Society Journals 2003 Pricing Trends for U.S. Society Journals and Ten Recommendations for Pricing 2004 Volumes.

  8. The ALA Library Materials Price Index Committee (Library Resources and Technical Services, LRTS), July 2003. The annual average price changes for US society journals were from the Allen Press annual studies. Consumer Price Index is from the US Department of Labor.

  9. See the EEA's account at http://www.eeassoc.org/default.asp?AId=24

  10. See the ACLS's History e-book project, and the AAA press release.

  11. For details of the Elsevier/UC deal, see http://www.econ.ucsb.edu/~tedb/Journals/ucbigdealpage.html.

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