RE: Monopolies in publishing

["D Anderson" <danderson@corhealth.com>]

It's true that to the consumer, there doesn't seem much evidence of
economies of scale. One factor the consumer doesn't readily have is data
on changes in the number of subscribers a given journal may experience. It
may be the case that economies of scale were achieved but were offset by a
drop in subscribers. In that case, the price may stay the same, but at
considerable effort by the publisher to reduce costs in the face of
declining revenues.

That's certainly been the case with some of our publications. The first
thing we do if the subscriber base declines for one of our publications is
to find ways to trim expenses while maintaining quality. Only after we've
taken steps to reduce costs do we consider raising prices because we know
that higher prices will encourage more customers to drop their
subscriptions.  Consumers, of course, see none of this process. They only
see that prices remain the same or increase.

Given the comments I've seen posted here and elsewhere, libraries have
been cutting back subscriptions (indicating some level of price elasticity
). For evidence, check the postal statements periodical mailers are
required to publish in issues coming out near the end of the year. They
show circulation statistics and a comparison over time will yield
subscription trends. The statements I track in the healthcare field
overall show a circulation decline over the past two years. I know that my
fellow publishers have focused substantial energy on cutting costs. So it
is reasonable to assume that any economies of scale that may have been
achieved were offset to some extent by a declining subscriber base.

Dean H. Anderson

COR Health
Insight ... not just news
http://www.corhealth.com

-----Original Message-----
[mailto:owner-liblicense-l@lists.yale.edu]On Behalf Of Hamaker, Chuck
Sent: Tuesday, July 15, 2003 1:41 PM
To: 'liblicense-l@lists.yale.edu'; 'espositoj@worldnet.att.net'
Subject: RE: Monopolies in publishing

In response  to Jose Esposito:

There isn't much evidence of economies of scale in Elsevier and other
large journals publishers operations. Per page/per journal,per 1000
character or per 10,000 characters if you look at price to libraries,
economy of scale, if it exists, doesn't show in the pricing.

The market has been so inelastic I believe, that large publishers have had
little incentive to look for means to internalize real savings in
production costs. And anecdotally, editor's processess have been fairly
well stuck in the 50's for many publishers. Even IF the publishing house
has "electronic" forwarding of mss to editors and reviewers, my guestimate
from talking with various publishers, is that less than 50% of editors
actually use the newer and potentially more cost effective means for
transmitting mss for review, processing, etc. True In house, i".e.
"typesetting", layout, proofing, etc. there may be scale savings, but even
that's hard to tell, and is where you would expect the most cost
savings/economy of scale. But now some publisher's tell us that the "in
house" what they have control over costs are not the significant piece of
the puzzle.

Just my opinion, backed with a fair amount of research done by many
others.-Cost(i.e. subscription price) per k/character studies have been a
standard for 40 years or more, and they haven't shown much if any economy
of scale with commercial publishers.

Chuck Hamaker