Plenary session 2: Economics of Scholarly Information
Ted Bergstrom
Big Deals and the Terrible Fix
Ted started by describing librarians' “shopping problems"
The first big deals entailed a publisher (roughly speaking) working out the library's current spend, multiplying by a factor, and then offering e-access to all content in addition to the print for existing subscriptions.
How effective was this? Very, since the publisher knows that the library is willing to pay at least same as they did for their paper subscriptions, and giving them additional content costs the publisher nothing. Bundling works well from a seller's perspective: demand for bundles varies less than individual titles, and deters entry to the market by making it hard to add new competing journals. And of course, by the time the deal expires, the faculty are addicted to online access so the library has to negotiate a new deal.
Ted then gave the audience an economic prescription: namely, if you want to allocate resources efficiently, use a price system where users pay for what they get out of their own money, and therefore economise, ie a pay per view model. If informed users spend their own money on downloads, demand becomes more price elastic, monopolists are forced to cut prices, and authors prefer to publish in reasonably priced journals in order to get more readers.
Does it work for academics? Ask yourself: who else is better placed to decide value of article access?
Currently there's a big discrepancy between the average cost of a non-profit and for-profit article. The competition prediction suggests that if users pay, it would drive down prices to just over cost-price. There could be limited role of central purchase, where libraries could subscribe to journals which cost no more than 1.5 times as much as the average non-profit journals and allow their users free access.
What can one library do?
Marybeth Manning
Reset: a publisher's response to the changing economy
SPIE have taken the “unusual” step of reducing institutional subscription prices to their Digital Library by 10%, because they believed there would be sustained impact on scholarly publishing from changing publishing models and economic crises.
SPIE are a not for profit international society for optics and photonics: their Digital Library contains journals, conference proceedings and books. The subscription model is tiered (with different criteria for academic, government and corporate customers) and was originally based on print pricing.
Their objective is optimal dissemination of information, but it must be sustainable: a balance of reach and revenues. SPIE decided that their tier model was acceptable and understood, but penalised smaller institutions or large institutions with few relevant programmes. Corporations preferred price per use, and overall the cost per use for low tiers too high. Combined with environmental factors (the global economic crisis) they decided on overall price reductions on full DL subscriptions and topical segments (not including consortia or single subscriptions). They also added a 5th tier for the smallest organisations, and allowed introductory discounts to enable institutions to test interest. So far renewal levels have stayed strong, and they have good levels of new business, especially in lower tiers.
Does it apply to wider community?
SPIE wanted to shift their business model rather than have it shifted for them by factors outside their control, and believe that market growth and user demand will support reduced prices in future. They “want to be seen as part of the solution not the problem”.
But does this affect anything when big deals/mega publishers are so dominant? If libraries won't vote with their feet (or with their £) then who is to blame?
Carol Tenopir
University investments in the library: measuring the return
How does the library demonstrate its value to the university and its scholarship?
How can value be measured?
Derived measures: A way to show that the library contributes to the income generating activity of the university ie for every £ spent on the library, the university received £ in return. One way is to look at money spent on collections and then money coming back in grants.
Grant cycle => conduct research – write articles – write reports and proposals – obtain grants – conduct research etc. Libraries have already been connected to all steps aside from obtaining grants: this is key unknown.
University of Illinois did a phase 1 study funded by Elsevier which found $4.38 grant income for each $1 invested in the library (based on the % of faculty who rated citations in proposals as important in their success x % of proposals funded/library budget). Their findings have been published in a white paper.
Phase 2 expanded the methodology from phase 1 across 8 institutions in 8 countries – does it still apply? (But remember that ROI numbers do not tell the full story)
Big Deals and the Terrible Fix
Ted started by describing librarians' “shopping problems"
- Delegation: Librarians are making choices for consumers who aren't spending their own money – 'the university' pays
- Unreliable signals: Arguments for subscriptions are fervid but not always reliable
- Complexity: Libraries face all or nothing complex deals, and when there are large numbers of titles covering 100+ disciplines, who can say what it's worth?
- Monopoly: Journals represent price inelastic demand, i.e. demand doesn't vary according to price (much like the prescription drug industry)
The first big deals entailed a publisher (roughly speaking) working out the library's current spend, multiplying by a factor, and then offering e-access to all content in addition to the print for existing subscriptions.
How effective was this? Very, since the publisher knows that the library is willing to pay at least same as they did for their paper subscriptions, and giving them additional content costs the publisher nothing. Bundling works well from a seller's perspective: demand for bundles varies less than individual titles, and deters entry to the market by making it hard to add new competing journals. And of course, by the time the deal expires, the faculty are addicted to online access so the library has to negotiate a new deal.
Ted then gave the audience an economic prescription: namely, if you want to allocate resources efficiently, use a price system where users pay for what they get out of their own money, and therefore economise, ie a pay per view model. If informed users spend their own money on downloads, demand becomes more price elastic, monopolists are forced to cut prices, and authors prefer to publish in reasonably priced journals in order to get more readers.
Does it work for academics? Ask yourself: who else is better placed to decide value of article access?
Currently there's a big discrepancy between the average cost of a non-profit and for-profit article. The competition prediction suggests that if users pay, it would drive down prices to just over cost-price. There could be limited role of central purchase, where libraries could subscribe to journals which cost no more than 1.5 times as much as the average non-profit journals and allow their users free access.
What can one library do?
- Consider dropping big deal subscriptions to overpriced journals
- Maintain subscriptions to reasonably priced journals, at zero cost to end users
- Subsidise user-pays models (not to their full cost though)
Marybeth Manning
Reset: a publisher's response to the changing economy
SPIE have taken the “unusual” step of reducing institutional subscription prices to their Digital Library by 10%, because they believed there would be sustained impact on scholarly publishing from changing publishing models and economic crises.
SPIE are a not for profit international society for optics and photonics: their Digital Library contains journals, conference proceedings and books. The subscription model is tiered (with different criteria for academic, government and corporate customers) and was originally based on print pricing.
Their objective is optimal dissemination of information, but it must be sustainable: a balance of reach and revenues. SPIE decided that their tier model was acceptable and understood, but penalised smaller institutions or large institutions with few relevant programmes. Corporations preferred price per use, and overall the cost per use for low tiers too high. Combined with environmental factors (the global economic crisis) they decided on overall price reductions on full DL subscriptions and topical segments (not including consortia or single subscriptions). They also added a 5th tier for the smallest organisations, and allowed introductory discounts to enable institutions to test interest. So far renewal levels have stayed strong, and they have good levels of new business, especially in lower tiers.
Does it apply to wider community?
SPIE wanted to shift their business model rather than have it shifted for them by factors outside their control, and believe that market growth and user demand will support reduced prices in future. They “want to be seen as part of the solution not the problem”.
But does this affect anything when big deals/mega publishers are so dominant? If libraries won't vote with their feet (or with their £) then who is to blame?
Carol Tenopir
University investments in the library: measuring the return
How does the library demonstrate its value to the university and its scholarship?
How can value be measured?
- implicit value – downloads, usage
- explicit value – testimonials, researchers' purpose in using library services
- derived values – Return on Investment (ROI)
Derived measures: A way to show that the library contributes to the income generating activity of the university ie for every £ spent on the library, the university received £ in return. One way is to look at money spent on collections and then money coming back in grants.
Grant cycle => conduct research – write articles – write reports and proposals – obtain grants – conduct research etc. Libraries have already been connected to all steps aside from obtaining grants: this is key unknown.
University of Illinois did a phase 1 study funded by Elsevier which found $4.38 grant income for each $1 invested in the library (based on the % of faculty who rated citations in proposals as important in their success x % of proposals funded/library budget). Their findings have been published in a white paper.
Phase 2 expanded the methodology from phase 1 across 8 institutions in 8 countries – does it still apply? (But remember that ROI numbers do not tell the full story)
Library ROIs fell into three distinct tiers:
Universities' administration staff also said they wanted the library to help them:
Phase 3 (LibValue project) will be looking at more complex areas of library's value to teaching/learning, and social/professional activities. ARL will be involved in disseminating tools and measures. They recognise that they also need to look at new scholarly endeavours – e-science, collaborative scholarship, institutional repositories.
Conclusion
- STM research institutions: up to 15.5 to 1
- Research/teaching institutions STM/Humanities/Social Sciences: up to 3.4 to 1 (most common category)
- Research and teaching all disciplines, not so much emphasis on external funding: less than 1 to 1
Universities' administration staff also said they wanted the library to help them:
- attract/retain outstanding faculty (studies have shown a relationship between reading more library resources, publishing more, getting more grants: typical profile of 'star' faculty members)
- foster innovative research (bearing in mind that the number of articles cited will be much lower than those read)
- build research reputation of institution (some cases have shown positive relationship between library funding and amount of successful grants)
- promote seamless integration of the library with institutional research activities (some studies have shown a positive relationship between article downloads and research productivity)
Phase 3 (LibValue project) will be looking at more complex areas of library's value to teaching/learning, and social/professional activities. ARL will be involved in disseminating tools and measures. They recognise that they also need to look at new scholarly endeavours – e-science, collaborative scholarship, institutional repositories.
Conclusion
- It's possible to tie library e-collections to faculty productivity
- Libraries help generate grants income
- ROI for grants varies according to the mission and location of university
- Value can be measured in many ways
Labels: big deal, publishers, roi, sustainability, value
posted by Frances Machell
at 4/12/2010 07:14:00 pm
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