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64 joseph

  1. 1. Pricing Journals in a Time ofUncertainty – Exploring An OpenAccess Alternative Heather Joseph Chief Operating Officer, BioOne 21 Dupont Circle NW St 800 Washington, DC 2003 +1 202 296 2296 Heather@arl.org www.bioone.org
  2. 2. Less Access to Scholarly Researchn Large percentage of pressure driving publishers to experiment with Open Access stems from results of current pricing policies in the marketplace. n Scientific journal prices have risen an average of 8.5% per year since 1986, while library budgets have stayed flat. n ARL libraries spend three times more money on journals compared to what they spent in1986. Yet, that money buys them 5% fewer titles. n During this time period, the volume of research published has increased significantly.
  3. 3. Contributing Factorsn Along with steadily decreasing library purchasing power, other contributing trends have emerged: n Consortia Purchasing: Good for libraries - lowers overall cost and broadens journal access. Good for larger publishers with critical mass; However, generally leaves smaller publishers out of the deal. n Bundled Packages: Larger publishers can sell bundled content to maintain/expand market share; Smaller publishers can not. Downside: ever-growing percent of library budgets tied up in package purchases, threatening continuation of support for small publishers.
  4. 4. Drivers Leading toConsideration of Open Accessn Given these market conditions, many publishers are at least considering alternatives. Drivers include: n Are we maximizing our access? n Can a move to Open Access stem or reverse negative trends in flat or declining subscriptions? Submissions? n Will a move to Open Access significantly boost my journal’s impact factor? n What if a competitor moves to an Open Access model? n How can I compete with a $0 subscription price?
  5. 5. Considering a Move to OpenAccessn What are the primary factors that you should consider?n How do you begin to do scenario planning?n Are their any templates/roadmaps/tools that can help you?
  6. 6. Risk Assessmentn Source: Crow and Goldstein, OSI Guide to Business Planning For Converting A Subscription-Based Journal To Open Access, Third Ediation, February 2004n Evaluation of a move towards an Open Access model should take into account three indicators, which differ journal to journal:
  7. 7. Publication/Author Feesn With Open Access movement is still in its infancy, most widely known model to support it is to replace subscription charges with a publication charges.n How does a publisher determine an appropriate level for these charges for your publication?
  8. 8. Article Fee Calculation Methodn In setting these fees, publishers must take into account the following factors: n All pre-press processing costs for which submissions will incur a charge n The number of submissions expected to be received. n Will they cover all submissions received? Or just accepted? n The extent to which a publisher wants these charges to offset actual expenses - completely cover the cost of processing? Partially defray costs? n Acceptance author fees in the journal’s field.
  9. 9. Sample Article Fee Calculation
  10. 10. Beyond Author Feesn A publisher might consider looking beyond a single source of revenue to try and combine multiple components to build a sustainable operation. There are myriad potential sources to draw on, including:n Author submission/publication charges (as just discussed)n Article processing feesn Re-print/Off-print salesn Advertisingn Sponsorshipsn Convenience-format licenses or distributor format fee
  11. 11. Beyond Author Fees (cont’d)n Journal publication in additional supplementary formatsn Value-added fee-base servicesn Contextual E-commercen Community Marketplacen Dues Surchargen Foundation Grantsn Institutional Grants and Subsidiesn Government Grantsn Gifts and Fundraisingn Voluntary Contributorsn In-kind Contributions
  12. 12. Article Fee Calculation Methodn Market environment is changing quickly - don’t be too quick to dismiss potential source.n Make projections based on objective analyses of market factors and potential.n Prepare three sets of revenue projections—worst case, mid case, and best case—and create three total scenarios/pro-forma financials for each.n Even small percentages of revenue (3-5%) from 4-5 of sources can quickly add up to 12-25% of your revenue - that publication fees don’t need to cover.
  13. 13. Transition from SubscriptionModeln Some journals moving away from subscription income are using a hybrid model designed to make a planned transition over time.n Journal offers an Open Access option it authors, and lowers its subscription price over time as the proportion of authors willing to pay the publication fee increases.n The theory is that journal gains new revenue to support a transition at a rate approximately commensurate with the acceptance of publication charges by the journal’s author community.
  14. 14. Sample Forecast for Journal
  15. 15. Transition from SubscriptionModeln A)Year: Start with current year and project through at least ten years.n B) Subscription Price: Projected price based on the subscription income necessary to offset any shortfall in covering publication costs after income from publication charges (and other income, if any).n C) Paid Subscription Base: This is an estimate of the number of paid subscribers relative to price and transition to Open Access.n D) Articles per Volume (Year): This encompasses EITHER: number of articles published each year OR
  16. 16. Transition from SubscriptionModelnumber of submissions, depending on fees charged only on published articles or on all submissions.n E) Cost to Produce Journal: The projected annual cost of journal publication that needs to be recovered.n F) Percent of Authors Paying Chargen G) Percent of Waived Charges: Percentage of authors expected to pay publication charges in each year, relative to those authors who will not.n H) Computed Per-article Publication Cost: Estimated cost to produce the journal divided by the number of articles per volume (year).
  17. 17. Transition from SubscriptionModeln I) Actual Author Publication Charge: This incorporates a surcharge to allow for the difference between paid and waived publication charges.n J) Publication Charge Income: Calculate the paid publication charges—articles per volume multiplied by the percent of authors paying. Multiplying that by the actual amount of the author publication charge arrives at publication charge income.n K) Subscription Income: Multiply subscription price by the number in the paid subscription base.
  18. 18. Transition from SubscriptionModeln L) Other Income if any: Input the estimated amounts of other income (advertising, sponsorships, etc.)n M) Total Income: This is the sum of J + K + L.n N) Surplus or –Deficit: This is the “bottom line” for each forecasted year. Deducting total cost to produce the journal from total income yields the estimated surplus or –deficit. A deficit is equivalent to the amount of financial risk or shortfall the organization will face as it transitions to Open Access.n O) Cumulative Surplus or –Deficit: A spreadsheet calculation of the cumulative amount.
  19. 19. Framework for InformedDecisionsn While business models that can support Open Access journals are still relatively new, and need testing to determine sustainability, some good tools do exist to help publishers evaluate their potential.n A $0 subscription-based pricing model may not be for everyone, but chances are, it will affect your publishing program in some way.n Objectively analyzing potential net effect is always a prudent business strategy.
  20. 20. Resourcesn Guide to Business Planning for Converting a Subscription-based Journal to Open Access, (Edition 3), R. Crow and H. Goldstein (www.arl.org/sparc/resources)n Model Business Plan: A Supplemental Guide for Open Access Journal Developers & Publishers (Edition 1), R. Crow and H. Goldstein, SPARC Consulting Group - - (www.arl.org/sparc/resources)n “Scholarly Associations and the Economic Viability of Open Access Publishing,” John Wallinsky, Journal of Digital Information. Vol. 4, No.2 (April 9, 2003).n History of the Immediate Free Web Access (IFWA) initiative, http://csssrvr.entnem.ufl.edu/~walker/epub/esaepub.htm.n Alternative Publishing Initiatives Resources for alternative scholarly publishing initiatives from the Association of Learned and Professional Society Publishers (ALPSP) http://www.alpsp.org/htp_altpubs.htmn OSI/ALPSP Roundtable Meeting: Converting an Existing Journal to Open AccessNotes from the September 13, 2002 meeting http://www.alpsp.org/notes131102.pdf