Library support in the transition to open access: membership cancellations

The purpose of this post is to shed some light on a specific issue in the transition to open access that particularly affects small and low-cost publishers and to suggest one strategy to address this issue.

In the words of one Resource Requirements interviewee:

So the other set of members that we used to have about forty library members , but when we went to open access online, we lost the whole bunch of libraries. Yeah, so basically we sent everybody ,you know, a letter saying we are going to open access online, the annual membership is only $30, we hope you will continue to support us even though there are no longer print journals, and then a whole flu of cancellations came in from a whole bunch of libraries, which we had kind of thought might happen but given how cheap we are, I have to say I was really disappointed when it indeed did happen especially from whole bunch of [deleted] libraries [for which our journal is extremely relevant]. I was going, seriously $30?

Comments: for a university library, a society membership fee, when not required for journal subscriptions, may be difficult to justify from an accounting perspective. $30 is a small cost; however, for a university the administrative work of tracking such memberships and cutting a check every year likely exceeds the $30 cost. With 40 library members at a cost of $30, the total revenue for this journal from this source was $1,200. A university or university library could sponsor this amount at less than the cost of many an article processing charge. The university and library where the faculty member is located have a support program for open access journals; clearly the will, and some funding, is there.

One of the challenges is transitioning subscription dollars to support for open access, as I address in my 2013 First Monday article. Following is one suggestion for libraries, or for faculty to suggest to their libraries: why not engage your faculty who are independent or society publishers to gain support for cancellations or tough negotiations and lower prices for the big deals of large, highly profitable commercial publishers that I argue are critical to redirect funding to our own publishing activities?

Here is one scenario that may help to explain the potential. If a library current spends $1 million a year on Elsevier’s big deal (not uncommon for a large university libraries; some pay more) at the current rate of profit of 37%, your library’s contribution to Elsevier profit is $370,000 per year. If your library could convince Elsevier to “make do” with a mere 36% contribution to profit from your library, that’s still a $360,000 contribution to Elsevier profit. The $10,000 difference would be enough to fund a $1,200 a year subsidy for 8 journals like this one to make up for loss of library membership / subscription revenue.

Here is how to calculate the potential for savings for your library and support:

  • The Elsevier 37% profit rate can be found in the 2014 Reed Elsevier Annual Report.The actual numbers (in millions) are 2,048 GBP revenue, 762 GBP adjusted operating profit.
  • Adjust as necessary using a currency conversion tool such as the Bank of Canada currency conversion service (daily and 10-year available). The actual numbers are substantial and hence important to this type of argument. 762 million GBP in profit is $1.17 million USD in profit as of today.
  • Take your library’s annual payment to Reed Elsevier.
  • Multiply by .37 to calculate your library’s contribution to Elsevier profit.
  • Use one or more other multipliers to calculate the savings possible through lower Elsevier profits, e.g.:
  • .36 to illustrate a drop in your library’s contribution to Elsevier profit of 1%
  • .20 to illustrate a drop in your library’s contribution to Elsevier profit to a “mere” 20% profit level
  • and so forth.

Similar calculations can be made with other publishers. I use Elsevier as an example partially because they are the largest scholarly publisher and partially because, as a publicly traded corporate, Reed Elsevier is required to publish this information. Fully private businesses (e.g. Springer, Sage) are under no such legal obligation.

References

Morrison, H. (2013). Economics of scholarly communication in transition. First Monday 18:6
http://firstmonday.org/ojs/index.php/fm/article/view/4370

Reed Elsevier (2014). Annual Report, page. Retrieved Jan. 7, 2015 from http://www.relx.com/investorcentre/reports%202007/Documents/2014/relxgroup_ar_2014.pdf

This post is part of the Resource Requirements for Small Scholar-Led Open Access Publishing
project.

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