Response from Ted Bergstrom to Ann Okerson

["Alison Buckholtz" <alison@arl.org>]

forwarded from Ted Bergstrom to liblicense readers.
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Ann Okerson suggests that :

However, the calculations would need to be done quite differently for
library and consortial package collections, wherein for a small extra
surcharge one gets many more titles.

The larger publishers are practicing what economists call price
discrimination (charging different buyers different prices for the same or
similar items) by negotiating individually with libraries for the purchase
of bundles of journals.  Contracts apparently vary in important details
like which journals are included and how much money the library would save
by dropping any given journal.  Consequently, there is often no single
price for a collection of journals.  It would be very useful for libraries
to collect consortium price data in a central database, to help libraries
understand the negotiating environment.  This would require universities
to show some backbone in refusing to sign secret agreements with
publishers. For many purposes, the listed price of individual journals is
the most useful information available. To a good approximation, the prices
charged for bundled site licenses are a multiple of the sum of the listed
prices of that publisher's print journals to which the library previously
subscribed. The all-or-nothing bundling policies of the big publishers is
a device for extracting greater revenue.  University administrators would
do well to refuse to buy journal bundles without the right to cancel
individual journals from their original holdings at a cost savings equal
to their listed individual prices.

Ted Bergstrom Preston McAfee
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From: Ann Okerson <ann.okerson@yale.edu>
Date: November 3, 2005 6:29:18 PM EST
To: liblicense-l@lists.yale.edu
Subject: Re: Bergstrom & McAfee Open Letter to University 
Presidents and Provosts
Reply-To: liblicense-l@lists.yale.edu

The authors' calculations (or at least the methodologies)  are certainly
accurate for print journal subscriptions. The findings are also consistent
with studies done in the past at ARL and also by other researchers.

However, the calculations would need to be done quite differently for
library and consortial package collections, wherein for a small extra
surcharge one gets many more titles.  A not atypical situation would be
that the Library subscribed to, say, 100 print journals from a publisher
-- and with the e-collection might pay an extra 5-10% for the entire list
which could have double or triple the number of titles. At times the
surcharge might be negotiated and aggregated consortially with a payment
made by the consortium.

So, in those cases, numbers would have to be re-worked entirely; the "cost
per"  would be lower by quite a lot; and there could also be sizeable
variations between libraries' costs.  Re-working is a complex process,
were it do-able.  Ann Okerson/Yale Library