Re: UC v. NPG

[Bernd-Christoph Kaemper <bernd-christoph.kaemper@ub.uni-stuttgart.de>]

[Please exclude duplicate posting to both PAMNET and 
liblicense-l]

NPG touts they were 'shocked' that their indecent 300% increase 
proposal for the University of California's upcoming 2011 renewal 
did make it to the press. They bemoan "the sensationalist use of 
data out of context, misrepresentation of NPG pricing policies, 
and the fact that we were under the impression we were in an 
ongoing confidential discussion." [1]

So lets give this a bit more context.

Libraries and consortia worldwide dealing with NPG have been 
exposed to many such "shocks" during the last decade.

It came as a shock when NPG ended the trial period for their 
journals in 2000 and tried to enforce site licenses for their 
journals that not only excluded any perpetual access rights but 
asked libraries to pay up to USD 10000 just for having online 
access to the peer-reviewed original research published in Nature 
and be content with getting access to the widely read 
front-matter (all the week's hot news and commentary, 
perspectives, features and reviews, together 30% of the content) 
only after 3 months?

It needed concerted action by librarians and faculty worldwide 
(including open letters and prominent coverage in the Times 
Higher Education Supplement and LJ Academic Newswire) to convince 
NPG to change its license terms, finally offering immediate 
access to every item upon publication, as expected from an online 
journal. [2]

It came as a shock, when NPG changed its pricing policy in 2001 
and de-bundled print and online, accompanied by large price 
increases (50%) on both print and online which forced especially 
small libraries to cancel either their online or print 
subscriptions, in the latter case with no backup in case of a 
future cancellation, or to accept a tripling in price. [3]

It came as a shock, when in 2003/04 one of the top society 
published molecular biology journals, The EMBO journal, was 
transferred from Oxford University Press to NPG, got bundled with 
its sister publication EMBO reports and libraries suffered a 
price hike by a factor of 3 or more. An open letter from SPARC 
Europe noted an out-of-balance shift to profit maximization at 
the expense of access and called upon EMBO and NPG to reconsider 
their excessive and damaging price increase. At the same time, 
NPG saw no problems with the fact that their change in backfile 
policies meant "un-freeing" 9 months of content already released 
to the public for open access. [4]

It came as a shock when in parallel NPG made its own "adjustment" 
of global site license pricing across its rapidly expanding 
portfolio of Nature branded journals, with price increases of 45% 
on average and two years later again by about 60% (actual figures 
for individual libraries could be smaller or much larger, as the 
pricing model had changed, too). Libraries could consider 
themselves lucky when they were part of a consortium and had 
enough negotiating power to at least distribute the price hike 
over several years, with "generous" price caps of 20% per year.

It came both as a relief and a shock, when in 2005(06) NPG 
finally acknowledged the need to offer licenses with perpetual 
access rights for licensed content, but combined this with the 
introduction of one of the most scientist-unfriendly backfile 
policies on the whole STM market. Effective from 2007, new 
subscribers would no longer have access to the complete available 
backfile since inception of the online journal (we are not 
talking about retro-digitised archives here), but only to the 
last 4 years before entering the contract. And, to add insult to 
the injury, libraries do not keep access to these 4 years while 
their contract is running, but loose one year after another of 
these 4 years, as NPG insists on establishing access on a 
rolling-window basis.

It came as a shock, when libraries learned that in order to keep 
access to such backfile years or to fill in further backfile 
years, NPG would ask them to pay as much as 60% of the current 
year subscription price per year of back volumes added. For 
comparison, even for a commercial publisher like Elsevier, 
libraries with a current subscription are asked to pay only about 
2.5% of the current year subscription price in order to fill in 
missing back volumes.

It came as a shock, when libraries learned that the 
retro-digitised backfiles of NPG's flagship journal Nature would 
cost an average library of a research university about 100.000 
EUR, one order of magnitude more than AAAS was asking for the 
comparable archive of Science (Science Classic), or what other 
publishers ask for their journal archives when normalized for 
size and site license price of current years.

It came as a shock, when in 2008, NPG took over site license 
marketing for the Palgrave Macmillan Journals, decoupled print 
from online in one go (leaving libraries with the "freedom" to 
decide what to continue) and started capitalizing on the 
backfiles, access to which was previously marketed as an integral 
part and benefit of any subscription. Even libraries that 
converted their print + online subscriptions to e-only, had to 
discover that access to the backfile had been removed leaving 
them only with access to the last 4 years. (Again, only consortia 
had the negotiating power to avoid that outcome for their 
members.)

A nasty extra surprise was encountered by libraries in Europe, 
when it turned out that the publisher would use the opportunity 
to set online pricing in EUR instead of GBP at a fixed company 
rate of 1.55 to the British pound, at a time when the real 
exchange rate was already much lower and falling. Thus, although 
Palgrave had announced that the base price of the online edition 
would be set equal to the print price, librarians were suddenly 
confronted with a 30% price increase (the real increase would be 
even higher, due to the higher VAT rate on e-only in Europe). It 
took repeated requests for a change in pricing policy and a 
threat to involve the European Commission, Directorate General 
for Competition, to get the publisher to acknowledge (first time 
for our 2010 deal) that a European customer could also ask for an 
offer and pay in British pounds.

It came as a bad surprise for those libraries obligated to 
collect and preserve the literature as state or central subject 
libraries that still have to collect print, when it turned out 
that NPG apparently hedges against possible future losses in 
revenue through the hybrid model (subscription plus an option to 
pay for open access on an article basis) by starting with a 
generous 20% price extra increase for print in 2010 for 8 out of 
12 journals new for the hybrid program, although they had 
previously announced that "Print subscription prices for these 
Journals will not be affected" [4].

The cynics among us were no longer surprised when it turned out 
that NPG would not stick to its announced hybrid journal pricing 
policy (i.e. reduce prices in line with the amount of material 
still published under a subscription model, as the revenue from 
Open Access charges and the proportion of articles paid through 
this route increases) but changed the rules to avoid price 
decreases as much as possible (including setting an arbitrary 10% 
OA uptake threshold and conveniently ignoring any decreases in 
published output, as in the case of EMBO). No wonder that major 
funding organizations do not trust hybrid publishers anymore and 
restrict major new OA funding programs to articles from 
non-hybrid journals. [4]

More recently (2009), it came as a shock when NPG acquired 
Scientific American, increased its (US) print subscription price 
seven-fold, introduced tiered pricing and increased its site 
license price by some 150% (a factor of 2.5). The backfiles are 
sold at about USD 5000 each for both the archive segment 
1948-1992 and 1993-2005. Apparently, NPG now tries to carry over 
the pricing strategies so successfully tested in the STM market 
of scholarly journals to the popular scientific magazine sector 
as well, assuming that when it comes from Mother Nature, everyone 
will pay. The success seems to have been limited, even many 
American libraries just said no.

This much for context on the UC case, and the pricing history of 
NPG which only in 2008, after two price hikes in a short time 
("Business models continue to evolve, and most publishers 
continue to experiment,: Steven Inchcoombe 2008 [6]), started to 
realize that (lo and surprise!) "a key priority for our customers 
is the ability to forecast costs and budget accurately," 
therefore "committing NPG to price increases capped at 7% in all 
four major currencies (GBpounds, USdollars, Euro, Yen) for three 
years" (starting from 2009, [5]). How this can be seen as 
compatible with a proposed increase of 300% in site license fees 
for UC for 2011 (for the same portfolio of titles), remains NPG's 
secret.

I cannot imagine that any consortium when confronted with a 
threat to increase site license fees by a factor of 4 from next 
year, take it or leave it, would have stayed calm and say, that's 
still a good deal for us - amidst a global financial crisis that 
hit not only California, but many American libraries and 
libraries worldwide. And what about NPG's claims that the UC deal 
has been "unfair" for many years and simply was not sustainable? 
I don't buy the argument: NPG let UC add journal for journal 
under their present agreement (19 or 20 journals after 2005, in 
for 2007 and 2008 alone 14 journals, according to title lists 
archived on cdlib.org), and happily took the extra revenue it 
brought to them year on year (it's not the case that UC's spend 
stayed flat, witness the 137% increase from 2005-2009). To me 
this conveys a different impression: first getting you hooked on, 
then asking for big cash, assuming that an institution like UC 
could not afford to roll back access to "must have content" of 
their fast growing NPG portfolio, once they have licensed it.

So it is timely, that we see the "ICOLC Statement on the Global 
Economic Crisis and its Impact on Consortial Licenses" reissued 
and reinforced today [6].

With about 10-12% of the papers published in Nature involving an 
author from UC, they are in a pretty strong position. UC has as 
much to win as to loose in this battle. I wish them good luck and 
hope they consider also the wider implications for scholarly 
publishing and the road to open access.

Bernd-Christoph Kaemper, Stuttgart University Library and
GASCO Nature and Palgrave Consortium

Disclaimer: this is my personal opinion and not a statement 
endorsed or influenced by either the German, Austrian and Swiss 
Consortia Organisation (GASCO) nor people from the UC or the 
California Digital Library.

[1] Informational Update on a possible UC systemwide boycott of 
the Nature Publishing Group; letter of the University of 
California, Office of the President, California Digital Library, 
June 4 2010 
http://libraries.ucsd.edu/collections/Nature_Faculty_Letter-June_2010.pdf

U. of California Tries Just Saying No to Rising Journal Costs / 
by Jennifer Howard, Chronicle of Higher Education, June 8, 2010 
http://chronicle.com/article/U-of-California-Tries-Just/65823/

UC threatens "systemwide boycott" of Nature Publishing Group / 
The Great Beyond (Nature blog), June 09, 2010 
http://blogs.nature.com/news/thegreatbeyond/2010/06/uc_threatens_systemwide_boycot_1.html

Inflation, in: Reciprocal Space: a nature network blog / by 
Stephen Curry, June 9, 2010 
http://blogs.nature.com/scurry/2010/06/09/inflation

Public statement from Nature Publishing Group regarding 
subscription renewals at California Digital Library (CDL); 
Nature, June 9, 2010 
http://www.nature.com/press_releases/cdl.html

Response from the University of California to the Public 
statement of Nature Publishing Group regarding subscription 
renewals at the California Digital Library; June 10, 2010 
http://osc.universityofcalifornia.edu/news/UC_Response_to_Nature_Publishing_Group.pdf

[2] Nature - what other libraries say. [Last updated July 23, 
2002.] 
http://www.ub.uni-stuttgart.de/ejournals/Nature_andere_Univ.html

[3] ibid, Insert: The Case of Small Libraries and Institutions.

[4] Hybrid Journal pricing (II): when and by how much will we see 
EMBO prices decrease / Bernd-Christoph Kaemper, posted on 
liblicense-l, Tue, 20 Oct 2009 19:30:06 EDT, and references cited 
therein 
http://www.library.yale.edu/~llicense/ListArchives/0910/msg00078.html

[5] NPG's annual letter to customers (2008) / Steve Inchcoombe, 
NPG Managing Director, 17 Sept 2008. 
http://www.nature.com/press_releases/marketletter.pdf

[6] International Coalition of Library Consortia (ICOLC) 
Statement on the Global Economic Crisis and Its Impact on 
Consortial Licenses, reissued June 14, 2010. Originally Issued 
January 19, 2009. 
http://www.library.yale.edu/consortia/icolc-econcrisis-0610.htm

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