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SPARC/ACRL session gives librarians an economics lesson on serial

Excerpt Posted with Permission from LJ Academic Newswire.

Chuck Hamaker

Library Journal Academic Newswire (TM)
Special ALA Midwinter Meeting Report for January 30, 2003

--SPARC/ACRL session gives librarians an economics lesson on serials
--Economics lesson leads to inspiration: is a site license boycott by
libraries possible?

In years past, the joint session offered by the Scholarly Publishing and
Academic Resources Coalition (SPARC) and the Association of College and
Research Libraries (ACRL ) at the American Library Association Midwinter
Meeting has often resembled a pep rally, where librarians were encouraged
to learn more about the journals marketplace that is squeezing library
budgets. But the 2003 session was noticeably different: an unvarnished
economics lesson, delivered by economists, reflective of a mature SPARC
organization that has continued to refine its activities. The session was
noticeably lighter on the usual fiery rhetoric from the dais. It was,
however, one of the most compelling Midwinter programs delivered in
SPARC's history. Attendance at the session swelled into the Society Hill
Sheraton's hallway, where more than 30 extra chairs were needed to
accommodate those who could not find seats inside the standing-room only
session. Columbia University Librarian James G. Neal chaired the session,
which featured Mark McCabe, assistant professor of economics at the
Georgia Institute of Technology, Theodore Bergstrom, chair of the
economics department at the University of California at Santa Barbara, and
Mary Case, ARL scholarly communications director.


At this year's SPARC/ACRL midwinter meeting, economist Mark McCabe began
the session by giving an effective presentation on how industry
consolidation and subsequent pricing practices has negatively impacted the
journals marketplace for libraries. McCabe should know--for seven years he
worked with the U.S. Justice Department's antitrust division, analyzing
anti-competitive practices, mergers, and federal economic regulation. He
was followed by UC Santa Barbara's Theodore Bergstrom, who immediately got
librarians' attention by asking a provocative question: just why are
libraries involved in subscribing to e-journal site licenses when the
e-journals aren't residing in the library, and are being used largely
outside of the library? "Bergstrom cited statistics that showed that
librarians were now spending 91 percent of their serials budgets on
for-profit journals, which in turn account for just 38 percent of
citations. In comparison, he noted that the nine percent of the serials
budget that goes to non- profit journals account for 62 percent of
citations. "So how are for-profit publishers able to squeeze 91 percent of
your budgets with less than 40 percent of the citations?" Bergstrom asked.
He then offered a basic economics lesson, demonstrating why site licenses
for bundles offered by for-profit publishers, while offering wide access,
actually harm the buying power of libraries. In essence, Bergstom
explained, the site license practice divorces the journal user, the
faculty member, from the publisher, or more precisely the publisher's rate
card, turning the library into a financial middleman ill-equipped to
properly negotiate the market. Bergstrom, however, said that he could not
tell librarians not to buy site licenses, as each institution needed to
necessarily act in its own best interests. His lesson, however, clearly
sunk in. One ibrarian later asked what would happen if academic libraries
banded together and agreed not to purchase individual site licenses. The
immediate response was that such collusion would be illegal. Intriguingly,
however, the illegality of such collusion was disputed by Mark McCabe, the
former Justice Department member on the panel. Librarians were abuzz as
McCabe explained the department has an apparatus in place where
organizations can petition for the right to collude if the end result
provides a social benefit. McCabe suggested that saving library budgets
and allowing higher education funding to be put to more productive uses
could certainly qualify for such an exemption, leaving librarians at the
session wondering whether such an action was in fact feasible.

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