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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