Re: Self-Archiving and Journal Subscriptions: Critique of PRC

[David Goodman <dgoodman@princeton.edu>]

Yes, there's an obvious typo; their costs and profits are both 
higher. As Sally has pointed out to me privately also, there are 
few public figures for costs and profits.  What figures have been 
given are not of publishable quality, with the exception of 
Elsevier's annual report figures for their return on sales. But 
what there certainly is, however, are figures for the sum, the 
price to the purchaser.

So it is certainly true that the possibility is open to any 
publisher of maintaining profits and lowering prices by increased 
efficiency.

David Goodman, Ph.D., M.L.S.
dgoodman@princeton.edu

----- Original Message -----
From: Joseph Esposito <espositoj@gmail.com>
Date: Thursday, June 14, 2007 8:45 pm
Subject: Re: Self-Archiving and Journal Subscriptions: Critique of PRC
To: liblicense-l@lists.yale.edu

> Is there a typo in this thread?  As I read it, the assertion is 
> that commercial publishers have higher costs and lower profits 
> than NFPs. My experience is precisely the opposite, though I 
> can't say that I have peeked at the income statements of more 
> than a small fraction of the 24,000 peer-reviewed journals. 
> Obviously, a lot of this is accounting methodology, and NFP 
> financial analysis is rarely on a par with the commercials, but 
> even so, my limited experience shows higher productivity and 
> lower costs for the commercials by most management metrics. 
> NFPs tend to pay people less, but have lower productivity for 
> many reasons (not least being that they pay people less).
>
> No doubt others have different experience, but I would really
> like to see the data before making any generalizations.
>
> Joe Esposito
>
>
> On 6/13/07, Sally Morris (Morris Associates)
> <sally@morris-assocs.demon.co.uk> wrote:
>> I'm particularly interested in David's assertion that
>> commercial publishers' costs are at least 50 percent higher
>> than those of nonprofits, and their profits lower. This matches
>> my own hunch, but I've been looking in vain for information on
>> exactly this, and so would love to know his source
>>
>> Sally Morris
>> Consultant, Morris Associates (Publishing Consultancy)
>> Email:  sally@morris-assocs.demon.co.uk
>>
>> -----Original Message-----
>> [mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of David
> Goodman> Sent: 31 May 2007 01:33
>> To: liblicense-l@lists.yale.edu
>> Subject: RE: Self-Archiving and Journal Subscriptions: Critique
> of PRC
>>
>> The economic argument goes as follows:
>>
>> There is an economic advantage in the simpler and more complete
>> access to research information from open access. It is not a
>> very great one--I think that some of the calculations are way
>> off the mark, but let's say it's 5%. That's about the cost of
>> paying for open access publishing.
>>
>> The problem is that the savings comes only when everyone
>> publishes OA, and all institutions and funders pay for it. So
>> the early adopters take the risks. The transition to open
>> access has always been the difficult part. There is temporarily
>> some additional money needed: for the university researchers to
>> pay for the publishing, while still needing to maintain a
>> library, for the journal publishers to risk the loss of
>> subscriptions while converting to open access--it would appear
>> that neither side can move first.
>>
>> There are four ways of making the change.
>>
>> The most obvious is to reduce the size of the highest cost
>> segment: the costs of the commercial publishers are at least
>> 50% higher than the non-profits, and their profit margin is
>> also much greater.  A determination by the major universities
>> to not pay for ineffective periodicals, those causing the
>> collapse of the lowest half of their journals, would do it. But
>> as long as even 100 universities are willing to pay, a journal
>> can continue. This takes the realization of the faculty that
>> the loss of access will be only temporary, because with the
>> failure of the inefficient journals publication will be
>> redirected to the efficient ones.
>>
>> Equally obvious is removing a certain amount of publication
>> from the journal system altogether. For the very best
>> researchers, their is minimal advantage in publishing outside
>> of such repositories as arXiv--their work will be noticed and
>> read every bit as well, and their established reputations will
>> substitute for peer review. I liker this result, but the
>> difficulty here is that this will differentially affect the
>> best journals, the ones that publish their work. The only way
>> of avoiding such an effect is the rapid complete conversion of
>> publication in those areas.
>>
>> Is there an alternative that will protect the commercial
>> publishers? Yes, optional open access--the ability of the best
>> funded laboratories (and the most generous funders) to pay for
>> individual articles being available open access, with this
>> stepwise reducing the cost of the journals (The Springer plan
>> provides in detail how they will calculate the lowering of
>> subscription costs--other publishers are less specific). As
>> journals are paid for in advance, there's a two or three year
>> delay, and it will be interesting to see if there is any effect
>> on the 2008 Springer prices. If they thought it worth the
>> investment to use some of their available capital to reduce the
>> prices further, it could go very fast. Perhaps the alternative
>> in the paragraphs above may give them some reason.
>>
>> The fourth is even less attractive: the forced conversion by
>> funders. With governmental funders, I have always disliked
>> this--once you rely on mandates, you have to accept whatever
>> the mandators may choose to do.  The only reason PubMed Central
>> is even acceptable is because it is being operated by NCBI, one
>> of the very few truly efficient governmental agencies, and with
>> a very long record in successful innovation.
>>
>> As for the political argument, Jan Velterop outlined it very
>> well in a single sentence: "Of course it is a 'political'
>> statement; it only applies if one accepts that formally
>> publishing the results is integral to doing research." (There's
>> an unstated premise that I think can be assumed on this list:
>> that research is worth doing.)
>>
>> David Goodman, Ph.D., M.L.S.
>> dgoodman@princeton.edu