Select Committee on Science and Technology Minutes of Evidence


Examination of Witnesses (Questions 20 - 39)

MONDAY 1 MARCH 2004

MR ROBERT CAMPBELL, MR RICHARD CHARKIN AND DR JOHN JARVIS

  Q20  Geraldine Smith: That is not what Dr Virginia Barbour is saying, the molecular medicine editor at the Lancet. She feels that patients should be able to access papers about their medical conditions. What are you doing to ensure that patients who are not scientists have access to quality medical journals that could help them have a better understanding of their own illnesses?

  Dr Jarvis: As I say, I think the mechanisms really are in place. Members of the general public get access to an article at no cost. They might not get it immediately on their desktop screen at home, which sounds like a good idea, but there is a lot of available information which most of us need to be interpreted. You could get yourself in trouble if you wrongly interpret this kind of information, much of which is arcane.

  Mr Charkin: The unprocessed data of scientific research papers is very tough for a lay person. We run a website which takes the news and filters it and puts into a form, and journalists get open to access to that, so can therefore transmit it; and the original paper could be got through inter-library loan; so we are doing things.

  Q21  Geraldine Smith: How are you protecting and encouraging pay-per-view access to articles?

  Mr Campbell: The amount that we sell directly from our site on a pay-per basis is increasing at a very high rate, almost doubling. I think it is the same for other publishers. That is effectively paying by the glass rather than the bottle. It is part of being able to deliver journals on line and you have greater flexibility. A lot of those people buying on a pay-per-view base seem to be outside the academic community, and quite often buying in the evening. There is quite an interesting pattern, if you analyse those people. The search into our literature is free; there is Medline and now increasingly Google, so there is huge support for users there to get into the literature and find the article you want.

  The Committee suspended from 4.51 pm to 4.57 pm for a division in the House.

  Q22  Geraldine Smith: How do you ensure that users in the developing world have access to journals, if they cannot afford the subscriptions?

  Mr Campbell: We work through an organisation called HINARI, which was developed by the publishing industry working with the WHO; and that ensures that most poorer countries can get free access to medical and biological journals. It also helps with the infrastructure because there is not much point in giving free access if they do not have the kit to access it. It is more about organising the infrastructure to help them get access to journals. For agricultural and related biological sciences there is a programme called AGORA, which the publishers have developed with help from Rockefeller and the FAO in Rome. That is also going very well. There is a third organisation called INASP, which is doing something quite interesting because not only are they helping publishers get journals to the developing world at little or no cost, but they are helping train local people to do their own publishing and develop their own on-line systems, so they are building up their own publishing systems in poorer countries. There is a huge amount of activity. I think it is mentioned in some of the submissions.

  Q23  Geraldine Smith: Is pay-per-view more expensive per article?

  Mr Campbell: I think so. My colleagues would have to answer that. There is another pricing model where the library might take some journals on a subscription price, and then the rest of the publisher's list on a reduced pay-per-view access, so you would have access to the whole publisher's list, paying full price for the heavily used journals and the rest at a very low price—related to the big deal, which is in your question.

  Q24  Geraldine Smith: According to Wiley, approximately 10% of potential users are unable to gain access to its publications. Can you tell me who they are and why this is?

  Dr Jarvis: These are people who do not belong to a consortium or one of the a basic licence to our journals. They do have a whole range of options when they are denied access. Obviously, we think we are making deep inroads into improving access, which our and other submissions showed; but there is always work to be done. I would not argue with you that we need to keep on improving access, but that 10% is the current number for denied access. It has reduced over time.

  Q25  Geraldine Smith: Can you tell me how you are trying to improve access?

  Dr Jarvis: We offer vouchers to our subscribers, for people who are not part of that consortium; or they could have pay-per-view individual access by paying directly at the time of access.

  Q26  Dr Iddon: Can you explain the difference between the cost of producing an article and the cost that someone has to pay for reading that article, on average? What fills the gap apart from profit?

  Dr Jarvis: Some of the evidence seems to be that there is not much of a saving as you move from a demand model to a supply model. If you look at some of the open access organisations, some of whom are commercial and others are not—the kind of prices they are suggesting would be required per submission from an author differ widely. If you multiply the 1.2 million to 1.4 million articles published each year by an average submission charge, it comes to about the same £3 billion to £3.5 billion per year as the current subscription model. You are simply shifting from the demand end to the supply end, and some of the submissions showed that one of the concerns is that the net producers of articles like Britain, which spends about £87 million each year on subscriptions at the moment, will probably spend up to £150 million in an open access model because they produce more articles; and the major industry readers of information, like the pharmaceutical industry, would be in a much better position in an open access model since they do not produce very much in terms of new research articles. So for companies countries that do not produce very much material but read a lot—I will not mention names, but this would be wonderful news. It would be wonderful news for the chemical industry and for the pharmaceutical industry, and bad news for major research institutes like Oxford and Cambridge, Harvard and Yale, and for countries like Britain.

  Q27  Dr Iddon: Are you saying that the cost mechanisms, particularly the sales price of journals, is more or less constant year in, year out, apart from your overheads like inflation and printing costs and all that? Can you tell me why in the last five years the retail price index has gone up 11% and the average cost of a journal has gone up a massive 58%?

  Mr Campbell: That is the masthead price, the subscription price; but in fact many libraries now get their journals through negotiated deals, so there is another statistic which is more important because it is about—the question in your document to us—access. In Britain, for example, on average, the British University had access to just under 4,000 journals in 1993. Last year they had on average access to just under 6,500 journals. What happens is that they are paying less per journal than they were ten years ago and they are getting far more journals; so you should not be misled by the price. There are an awful lot of deals, and Britain has led some of that through HEFCE with the national electronic site licence initiative, and it has pioneered new pricing models.

  Q28  Dr Iddon: Anybody who is an academic, or has been like some of us on this Committee, knows that we have been faced with long lists of journals from the departmental liaison officer with the main university library, and every year—year in and year out for a decade now—I was asked to tick journals that we could do without in relation to other journals which were very necessary for me as a scientist.

  Mr Campbell: I do not think that is the reality. If you look at the—

  Dr Iddon: I have not asked the question yet, with respect.

  Chairman: He is anticipating the answer.

  Q29  Dr Iddon: How come the publishing industry blames the lack of finance for the libraries being put in that situation when I have just quoted those rising costs?

  Mr Campbell: Personally, I would not blame the library budget at all. What has happened is that publishers are delivering more journals. If you read page 5 of the Wellcome report, which was a pro open access report, you will see there is data there showing that libraries are able to access far more journals than ten years ago, which is what I have been saying. The reality is that they are getting more journals. The inefficiency in the system is basically the library overhead. If you read the papers by Andrew Odlyzko, he analyses the total cost of the system. The problem at the moment is that people are focusing on this headline price, the subscription price. If you look at the whole system, two-thirds of the cost of journals is the library, not the publisher; and as Odlyzko said, if you have free journals, within ten years you would have a library-funding crisis because the biggest cost is overheads. The way you get round that is to work together. You can develop national key performance indicators. You can look at where the costs are in the system and work a lot of those out. Going on-line entirely is the biggest single factor that can enable us to save costs and get more journals to more people. It is a very efficient system. If you read Lord May's paper, Scientific Wealth of Nations, Britain scores very well against, for example, the United States. He gives us a score of 90 citations per million pounds spent on R&D, while in North America the score is about 60. The system works very well.

  Q30  Dr Iddon: I am old enough to remember when there were very few commercially produced journals around, and when scientists and people in humanities published in the journals of their learned societies. The facts that we have collected shows and the evidence shows that not-for-profit journals—and a lot of those are published by learned societies—are more highly cited than your journals are; but they are a damn sight cheaper. How can you justify it?

  Dr Jarvis: One of the things which intrigues me about the idea of authors paying a fee to be published is that that is exactly what many societies did before commercial publishing appeared. One way of subventing one's costs and holding down the subscription price is to charge some kind of a page charge or a fee. The fact that commercial journals started in a free market was not something where one could ask how it happened. It happened because there was a service provided which scientists—and you were obviously one—actually voted with their papers and persuaded their libraries to purchase these journals. The 58% price increase in journals versus the RPI is an interesting statistic, but, again, publishers do not write these papers, and there has been a tremendous increase in the amount of R&D spend, and subsequently the research articles published at the end of it. Publishers of all types are there to try to get that information to the market. Measuring a niche market like STM Journal Publishing and its pricing structure against a broad basket of consumer goods RPI is not particularly helpful.

  Q31  Dr Iddon: The point I was driving at in my question, with respect, was this: why is there such a big difference in the costs of purchasing a learned society's journal, even discounting the profit; there is a huge difference in cost between a learned society journal and any journal from a commercial producer?

  Dr Jarvis: They have member fees, which obviously subvent their costs. They do not, with respect to them, produce many surpluses of profits in which to build the kind of digital infrastructure which commercial publishers have had to build. It has been the commercial publishers over the past five years who have been responsible for doing it, but the enormous costs that many commercial publishers have put into transitioning since 1997, from print business through the mail to a highly efficient digital business, is something that we should all be proud of. I cannot think of any other industry that has transitioned itself through the Internet as STM Journals have.

  Q32  Dr Iddon: You do publish prestigious journals—I accept that—but what appears to be happening is this. When I look at my tick list as an academic, and I have to cross journals out that are of a lower priority order than the more prestigious journals, the more prestigious journals appear to be increasing their price almost deliberately so that you are forced to cross them off the list, and forced into bundling exercises in order to buy the ones that you really cannot do without. This seems to be a trend in the commercial publishing business that we have noticed.

  Mr Campbell: Could I read out a statement and ask you if you agree with this? "Librarians are suffering because of the increasing volume of publications and rapidly rising prices. Of special concern is the much larger number of periodicals that are available that members of faculty consider essential to the successful conduct of their work." Would you agree with that statement?

  Q33  Chairman: Who wrote that, first of all—before he agrees to anything?

  Mr Campbell: It is in a report of the Association of American Universities dated 1927. This is not new. You said you had been around for a long time.

  Q34  Dr Iddon: I have to tell you, Mr Campbell, that I am asking the questions and you are answering them.

  Mr Campbell: Sorry. Thank you for reminding me!

  Q35  Dr Iddon: Coming back to my first question, because I do not think I got an answer, and perhaps I can phrase it more straightforwardly, what is the cost to you of publishing an article, and what is the price you charge for that article?

  Mr Campbell: For Blackwell? We divided the number of articles we published last year into the revenue, largely from the subscriptions from libraries and from other sources, and we published 115,000 articles and then we divided the revenue, and it worked out at £1,250 per article. That was the cost of the total system, paying the publisher's price for journals. We are trying to get to a level of profitability where we make about 15% profit on our turnover. Out of the £1,250 there is 15% profit—and we are struggling towards that—and the rest is cost. That does include fees to societies and royalties to editors. There is quite a lot of money going back to the university system.

  Mr Charkin: For Nature Publishing Group it is more or less the same numbers for what we call academic journals, but do not forget the £10,000-30,000 figure for Nature, which is a very different model.

  Q36  Paul Farrelly: Picking up on Brian Iddon's point, and the effect whereby one publisher increasing the price of a journal puts the competition out of business potentially, is that it does not fit easily with standard economic models. That said, in your industry would you generally across certain sectors say there is a definite price leader?

  Chairman: Or is it that you get what you can get?

  Mr Campbell: Yes.

  Mr Charkin: That was not the question, was it? Is someone pricing higher than everybody else?

  Q37  Paul Farrelly: Is there a price leader you would respond to? You have a relatively small market share overall.

  Mr Campbell: I do not think so. We set our prices with editorial boards and societies, so our prices largely are dictated by a group of academics. We show them budgets and they decide what the price should be next year. If you lost the support of your academics that are editing your journal for you, you would have no journal; therefore, this is a very close association with the academic community. We are not sitting in a bunch of businesses that can pick our prices out of the air.

  Dr Jarvis: Certainly not for us, I can add. We have sometimes seen after the event that we have probably been a price leader ourselves in a particular year. It depends what new journals one is pricing, how many journals one is adding to the portfolio, how many more papers you are publishing, and all the things which influence price. We have sometimes been in the top three or the top five. There is not anybody that I would see as the price leader.

  Mr Charkin: I think there is a significant new pressure, which is the library list servers, which now instantaneously transmits around librarians if anyone is seen to be out of line; so it is not just the academics but the librarians that we have to be very aware of—and indeed their budgets.

  Q38  Paul Farrelly: I am trying to get a perspective on the complaints from some quarters that the margins in your industry are excessive—35% in some cases and 29% Wiley. Taking twenty years ago, before a lot of the larger mergers took place and before digitisation came in industry-wide, how were margins in those days compared with these days?

  Mr Campbell: Probably higher. Certainly, then you had very successful book publishing; so publishers like McGraw Hill was, I guess, price leader in our field, STM—book publishing in particular. They were very profitable. We have seen the demise of—book publishing is quite hard work and margins are quite low on book publishing. In addition, journals hit the peak in circulation in about 1986; that is when most journals reached the highest circulation in terms of subscribers. Since then, there has been a small decline, as we have heard, and some journals have been cancelled. More recently, because of the development of new pricing models of consortia, a number of people that take journals—the circulation has gone up usually. Therefore, to have a session like this would have been quite relevant ten years ago when things were looking pretty bad—before digitisation, before on-line, early to mid 90s we were seeing lower circulations of traditional print-on-paper subscribers. Since then, publishing has flourished. We are now supplying thousands of libraries, and it is very exciting to see the data. We are increasing downloads every year. I honestly think this was an old problem ten years ago, but not any more.

  Q39  Paul Farrelly: You are saying that margins if anything are lower these days.

  Mr Campbell: No, but I cannot speak for any other publishers. Some publishers are doing better today than they were ten years ago, and some are doing worse. It goes up and down in cycles. I guess that when a publisher starts doing badly for a while, it can get sucked up.


 
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