Re: Calculating the Cost per Article in the Current Subscription Model

["Sally Morris \(ALPSP\)" <chief-exec@alpsp.org>]

The Wellcome study, by its own admission, does not factor in either
overheads or any profit or surplus.  By my calculations (modest estimate
of overhead as 35% of direct costs, profit as 15% of total revenue) you
therefore need to multiply their figures by approximately 1.6 to arrive at
the total figure.

Sally Morris, Chief Executive
Association of Learned and Professional Society Publishers
E-mail:  chief-exec@alpsp.org

----- Original Message ----- 
From: <heatherm@eln.bc.ca>
To: <liblicense-l@lists.yale.edu>
Sent: Tuesday, January 04, 2005 2:06 AM
Subject: Re: Calculating the Cost per Article in the Current Subscription 
Model

> Very interesting and very helpful data.  I would like to point out that
> the cost per article published (Figure A) - appears to be about $2,500
> to $5,000 - does not represent the full range of estimates, but rather
> what I would consider to be overestimates of cost.  The Wellcome Trust
> report, for example, quotes about $1,500 US for an OA journal of high
> quality, and less for a medium-quality journal (not unlike the $1,500
> charge for PLoS and about $525 for BioMedCentral.  Tenopir and King, as
> I recall, also estimate around $1,500 per article.  Changing these
> figures radically changes the conclusions.
>
> To illustrate the difference this factor makes, consider that if the
> publication cost per article can be lowered to about $500 US average,
> then ALL the ARL libraries would pay less under open access. If we
> assume an average cost of $1000 US (averaging BMC and PLoS publication
> charges is about this amount), then 6 ARL libraries pay more under OA,
> not 67 as per the present spreadsheet.
>
> Other indications that the figures are an overestimate of what is
> necessary:  recently, SPARC Publishing Partner Optics Express, an OA
> publisher, recently announced that they are set to generate a modest net
> revenue this year, basing total revenue on publication charges of $450
> for articles six pages and under,and $800 for articles over six pages.  
> See the announcement in the SPARC Open Access Forum at
> https://mx2.arl.org/Lists/SPARC-OAForum/Message/1360.html
>
> I have been working on figuring out how much money is really needed to
> publish even a very high-end STM article, working from the ground up
> (the work involved, salaries, overhead, etc.).  My current estimate is
> about $500 U.S. per article.  Sally Morris figures that this does not
> factor in rejected articles, which she thinks take twice as much work as
> accepted articles.  Even taking this at face value, we still get an
> estimate of about $1,500 U.S. per article.  On the other hand, other
> expert sin the publishing industry has told me that my estimates are
> based on higher salaries than what they actually pay, and I believe
> there is room for even more efficiencies.  If you're interested in the
> details of my calculations, go to the SPARC Open Access Forum archives
> https://mx2.arl.org/Lists/SPARC-OAForum/List.html and search for
> "Imaginary Journal".
>
> The lowest rates will be achieved through totally open access journals,
> electronic only, published by nonprofit organizations (no taxes).  This
> is not to say that current publishers would charge such reasonable
> amounts - Springer does charge $3,000 per article, obviously.  My point
> is that this much revenue is not truly necessary for an open access
> scholarly publishing model.
>
> One issue that Phil's analysis highlights, which I think is very
> important, is that production-based models do not factor in potential
> contributions by other players, such as non-research libraries and
> corporations.  I believe there must be ways to involve these groups as
> well.  For example, it makes sense to me that governments would provide
> some subsidy for an OA scholarly publishing scheme for the benefits that
> accrue to the education system, and for government employees.  It would
> probably be best if this was only a small portion of the total, to avoid
> the potential of government control (some might prefer no contributions
> and no potential for control whatsoever, of course).  There could be
> other opportunities for contributions by other sectors, such as using
> the tax regime to manage corporate contributions (i.e. corporations
> which apply for tax relief due to R & D could have the option of making
> their results openly accessible, or contributing to a fund to be
> distributed to the research-producing universities).  One reason to
> hesitate before adopting such a scheme is that it may not be necessary -
> and having the research universities control the funding entirely leaves
> the control of the system entirely in their hands.
>
> Many thanks for this spreadsheet and analysis, Phil - very helpful!
>
> cheers,
>
> Heather Morrison