Select Committee on Science and Technology Written Evidence


APPENDIX 32

Memorandum from Procurement for Libraries

1.  INTRODUCTION

  1.1  Procurement for Libraries (PfL) is an umbrella group representing the seven higher education (HE) regional purchasing consortia for libraries, the research council libraries' consortium and, since 2003, the British Library. It includes a representative of the Procurement Strategy Implementation Group for HE (Proc-HE), which is charged with developing and implementing the Procurement Strategy for Higher Education. Annual spending through the library contracts of the seven regional purchasing consortia is estimated at over £70 million.

  1.2  PfL's remit is to discuss strategy for procurement by HE libraries, to exchange information and intelligence between members, to develop awareness of and expertise in procurement within HE libraries, and to maintain liaison with external bodies. PfL is a member of the International Coalition of Library Consortia.

  1.3  Evidence is given below on the three questions posed by the Committee that relate directly to procurement.

2.  SUMMARY OF EVIDENCE AND ACTIONS

  2.1  The "big deal" is superficially advantageous but holds many dangers:

    (a) journals and publishers outside the "big deals" may be squeezed out of existence;

    (b) publishers' existing monopolies are intensified, since libraries are obliged to subscribe to the entire output of a publisher instead of to discrete titles; and

    (c) it puts publishers into an even more powerful position for increasing prices.

  2.2  Institutional repositories and open access journals have the potential to compete with commercially published journals; however cultural and systemic factors currently prevent them from competing.

  2.3  An investment, small in relation to the annual spend by HE on scholarly journals, would create an infrastructure of institutional repositories within HE capable of competing with commercial academic publishing.

  2.4  Proposed actions to promote a competitive market are:

    (a) give equal weight in the Research Assessment Exercise to open access and commercially published journals;

    (b) ensure that the workings of the market become more transparent by bringing purchasing decisions closer to the end-user; and

    (c) develop a national procurement strategy for information resources.

3.  WHAT IMPACT DO PUBLISHERS' CURRENT POLICIES ON PRICING AND PROVISION OF SCIENTIFIC JOURNALS, PARTICULARLY "BIG DEAL SCHEMES", HAVE ON LIBRARIES AND THE TEACHING AND RESEARCH COMMUNITIES THEY SERVE?

  3.1  Academic publishers are monopolists: only they own the rights to their content and determine the terms of sale. In the environment of consumer publications there is some substitutability: instead of buying The Times one can buy The Independent; they are different brands but with similar news content. However, in the academic world there is virtually no substitutability of primary content. If Researcher A needs the published results of Researcher B, the results of Researcher C will not do. If results in Researcher A's field are published in Journal Y, Journal Z will not do. Hence there is virtually no competition.

  3.2  In the past this lack of competition has led to notoriously high price rises for print journals. The mechanism driving this is as follows. If a publisher discounts the price of a well respected journal, the number of subscriptions will not rise hugely. Instead libraries will spend the saving on other titles, from other publishers. By discounting, the publisher has lost profitability and decreased market share. The converse is also true: if the price of the well respected journal is raised, some subscriptions will be lost, but other journals from other publishers may well be cancelled instead. By raising the price the publisher stands to increase profitability and market share.

  3.3  The same commercial logic applies in electronic publishing. It makes little sense for a publisher to offer discounts to the individual library, still less to offer them on a national scale. By so doing the publisher would simply and immediately decrease both profit and market share.

  3.4  Instead of discounts publishers have offered access to additional electronic content at somewhat increased prices. At first sight, these "big deals" offer possible benefits for all sides. Publishers have a stable revenue stream for a number of years, with no cancellations. Libraries can predict inflation over the term of the agreement, and save money from the inter-library loans budget. Users have immediate access to material previously not subscribed to, at no incremental cost.

  3.5  Early usage figures offer some evidence of this last, most important benefit: users are downloading or hitting articles well outside the range of the previously subscribed core of hard-copy titles. However there is other countervailing statistical evidence: for instance, at the University of North Carolina, 28% of Science Direct titles accounted for 75% of downloads; [105] 85% of subscribers to the Emerald "big deal" viewed less than 5% of the available titles. [106] Such usage seems to replicate hard-copy patterns.

  3.6  Not only is the main benefit unproven; there are also a number of dangers inherent in the "big deal" that shift the balance of power even further in favour of the publishers.

  3.7  The first danger lies in the very availability of the full output of some of the bigger publishers. Guédon traces the influence of the citation indexes' documentation of impact factors for journals in creating a core collection of must-have journals for particular disciplines. He also posits an increase in citations of the journals of "big deal" publishers (understandable given their availability) in the research output of subscribing universities. [107] We have therefore potentially a vicious circle: the journals in "big deals" have higher and higher impact factors, to the detriment of journals outside the "big deals". The effect on the market-place will be to undermine the financial viability of such journals and their (generally smaller) publishers.

  3.8  Secondly, libraries can no longer cancel individual titles, as they did with print subscriptions. Instead the "big deal" commits a library to either buy or cancel the entire content of a monopoly publisher: the monopoly is thereby intensified. The monopoly is intensified even further in the case of national deals covering an entire library sector, such as HE. Such intensification cannot be in the interests of the purchaser.

  3.9  The final related danger is that, at renewal time, publishers can offer libraries a stark choice: pay a much higher fee for the "big deal" or cancel. Few academic libraries will be able to refuse the "big deals", because they contain so many must-have titles; we have replaced must-have titles with must-have publishers. The inflation we have seen for hard-copy titles will now be further fuelled by bundling into the "big deal". The consequence will therefore be that journals outside the "big deals" will be cancelled. Publishers, particularly the smaller ones, will cease trading, and there will be further consolidation in the marketplace.

4.  WHAT ACTION SHOULD GOVERNMENT, ACADEMIC INSTITUTIONS AND PUBLISHERS BE TAKING TO PROMOTE A COMPETITIVE MARKET IN SCIENTIFIC PUBLICATIONS?

Dissemination or validation?

  4.1  Before discussing actions to promote a competitive market, it is important to determine what publishers offer in the marketplace. In effect they provide two services: firstly they disseminate information; secondly they confer authority on the information published by ensuring its quality. The latter service is by far the more important.

  4.2  Dissemination can be achieved by anyone with a network connection: scholars and professionals regularly use e-mail and other similar means of disseminating results. Dissemination is not therefore a point of scarcity. This conclusion is supported by an examination of the rewards of intermediaries engaged in dissemination. Serials agents command very low margins on hard copy journal subscriptions—an average of 7% has been cited; booksellers, on the other hand, command margins of up to 50%. The difference reflects the relative importance of dissemination for these types of publication.

  4.3  It seems therefore that scholarly publishing in academic journals is essentially about validation of results through the editorial and peer-review process, rather than dissemination. Guédon traces this process of validation, of creating the scholarly record, of establishing paternity and property rights, back to the 17th century, where it is already evident in the first issues of the Philosophical Transactions of the Royal Society of London. [108]

The Economics of Scientific Journals

  4.4  The economics of the market in STM journals are not normal: producers, of both the content and the validation service, are generally not directly rewarded; users, of both the content and the validation service, do not pay for it.

  4.5  Firstly, scholars and their employing institutions generally receive no or very low direct rewards for creating the content and providing the validation without which academic publishing would not exist. However, scholarly and academic authors do reap substantial indirect rewards from publication, particularly in prestigious peer-reviewed journals: career advancement and research funding. There is of course institutional, as well as personal, interest in such publication: the funding and prestige of institutions are generated in large measure by their scholars' success in gaining research grants and in the Research Assessment Exercise (RAE).

  4.6  There is therefore a large financial interest, on the part of both individual scholars and their employing institutions, in continuing publication in existing established peer-reviewed journals; this may explain, in part at least, why new electronic initiatives outside traditional publishing have been slow to take off. One obvious action to promote competition with commercial peer reviewed journals is to enhance the standing of open access journals.

  4.7  Action 1—Give equal weight in the RAE to open access and commercially published journals. It may be argued that this would devalue or subvert the RAE, the purpose of which is to assess research quality, not to act on the marketplace for journals.

  4.8  The second unusual characteristic of the economics of scholarly publishing is that the end-user or consumer in general does not pay for the information used. Payment is made from an institutional budget, generally delegated to the librarian. The end-user is therefore insulated from considerations of cost and the effects of inflation: unlike most products price does not affect demand because the user is not obliged to place a value on the product consumed.

  4.9  Action 2—Ensure that the workings of the market become more transparent by bringing purchasing decisions closer to the end-user. The electronic age has enabled a high degree of granularity in e-commerce transactions, and provides a similar degree of granularity in publishing by facilitating access at the level of the individual article rather than the journal title. It is ironic therefore that the academic sector is now purchasing in electronic form the complete output of publishers, instead of individual tiles or indeed articles. Experimental models do exist that bring the purchasing decision close to the individual user, while still offering publishers stability of income and libraries the means of controlling budgets. [109]

Procurement strategy

  4.10  The position of HE is not helped by the fragmented nature of the procurement of information resources.

  4.11  There are seven HE regional purchasing consortia with remits for the procurement of the widest range of goods and services supporting all HE activities. In the past strategic direction was enabled through the Joint Procurement Policy and Strategy Group (JPPSG). The Procurement Strategy Implementation Group (Proc-HE) is a new group, which in 2003 replaced the JPPSG, charged with developing and implementing a new three-year Procurement Strategy for Higher Education. [110]

  4.12  As far as libraries are concerned, all the regional consortia are represented on Procurement for Libraries, as is Proc-HE (for PfL's remit see § 1.2 above). The regional consortia have been very successful, negotiating contracts for books and journals with an annual value of about £70 million. Success is in part due to dealing with intermediaries—booksellers and serials agents—that are in competition with each other. Major savings and improvements in speed and quality of service have been achieved. The regional consortia also discuss whether procurements should be undertaken at regional or national level. In the past the prevailing view has been that competition amongst suppliers is best fostered by procurement at the regional level.

  4.13  Two bodies are active nationally, negotiating with content owners and aggregators for electronic content. Having no members, they function as agents of the HE sector rather than as consortia. The Joint Information Systems Committee (JISC), resourced by the Funding Councils, negotiates with publishers for NESLi2 (a national initiative for the licensing of electronic journals) and for JISC Collections (a collection of online research tools, learning materials and digital archives). [111] Eduserv Chest (a not-for-profit organisation within UK higher education) negotiates for all forms of commercially available electronic resource (abstracts, full text, journals, software, courseware, etc) for the education and research communities in the UK and Republic of Ireland. [112]

  4.14  There seems little logic in this arrangement. NESLi2, JISC Collections and Eduserv Chest seem to negotiate agreements for the same type of content. Arrangements made previously under NESLI have cut across agreements negotiated by the regional consortia and have cost libraries money in terms of forfeited discounts.

  4.15  Action 3—Develop a national procurement strategy for information resources. Mechanisms are already in place under the auspices of Proc-HE for all commodities and under the auspices of Procurement for Libraries for library resources.

  4.16  It must be stressed that a national strategy does not necessarily imply procurement agreements at the national level. It is not clear that national procurement of electronic resources is advantageous (see §§ 3.8 and 4.12 above).

5.  WHAT ARE THE CONSEQUENCES OF INCREASING NUMBERS OF OPEN-ACCESS JOURNALS, FOR EXAMPLE FOR THE OPERATION OF THE RESEARCH ASSESSMENT EXERCISE AND OTHER SELECTION PROCESSES? SHOULD THE GOVERNMENT SUPPORT SUCH A TREND AND, IF SO, HOW?

  5.1  Two related developments are institutional repositories and open access journals.

Institutional repositories

  5.2  Potentially institutional repositories represent an inversion of existing practice. Until now, higher education institutions have generally sought to collect the relevant works of scholars of other institutions in order to make them available to their own scholars. Given the explosion in the number of researchers and the volume of information, the achievement of this aim has become impossible. Under the new model, higher education institutions collect only the works of their own scholars, and make them available to other institutions. This aim is obviously much more achievable: the scale of a repository is directly related to the research activity, and hence income, of each institution.

  5.3  If all HE and research institutions maintain their own repositories, they will create a distributed archive of scholarly publications, easily searchable with modern technologies. It is foreseeable that this archive could also be hospitable to virtual journals. Peer review and editorial structures would validate submitted papers and give them an electronic stamp of quality; the documents themselves would remain on and be available from the home institution's server.

  5.4  An investment, small in relation to the annual spend by HE on scholarly journals, would create an infrastructure within HE capable of competing with commercial academic publishing.

Open access journals

  5.5  Open access journals are starting to compete with commercial journals. However, for the reasons outlined in §§ 4.5-4.6 above, they do not yet compete on an equal footing. This situation will continue until the academic community accords them the same status.

February 2004




105   Chuck Hamaker, "Quantity, quality and the role of consortia", What's the Big Deal? Journal Purchasing-Bulk Buying or Cherry Picking? Strategic issues for librarians, publishers, agents and intermediaries, ASA 2003 conference; available at http://www.subscription-agents.org/conference/200302/chuck.hamaker.pps Back

106   David Nicholas and Paul Huntington, "Big deals: results and analysis from a pilot analysis of web log data: report for the Ingenta Institute", in The consortium site licence: is it a sustainable model? Edited proceedings of a meeting held on 24 September 2002 at the Royal Society, London, Oxford: Ingenta, 2002 (Ingenta Institute, 2002), pp 121-159, pp 149, 151. Back

107   Jean-Claude Gue«don, "In Oldenburg's long shadow: librarians, research scientists, publishers, and the control of scientific publishing", ARL proceedings, 138, May 2001, p 24; available at http://www.arl.org/arl/proceedings/138/guedon.html Back

108   Gue«don, p 3. Back

109   One is the PEAK Project, by the University of Michigan and Elsevier; see http://www.lib.umich.edu/retired/peak/. For a discussion of the implications see: David Ball, "Beware publishers bearing gifts: why the "big deal" is a bad deal for universities', Libraries and Education in the Networked Information Environment: proceedings of the 24th Annual International Association of Technological University Libraries 2003 Conference, Middle Eastern Technical University, Ankara, 2-5 June 2003. Available at: http://www.iatul.org/conference/proceedings/vol13/papers/BALL_fulltext.pdf Back

110   See: http://www.jppsg.ac.uk/ Back

111   See http://www.jisc.ac.uk/index.cfm?name=coll  Back

112   See http://www.eduserv.org.uk/chest/ Back


 
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