Examination of Witnesses (Questions 20
MONDAY 1 MARCH 2004
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 pricerelated to the big deal, which is in your
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
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
notthe 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 lotI 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 aboutthe
question in your document to usaccess. 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 yearyear
in and year out for a decade nowI 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
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
journalsand a lot of those are published by learned societiesare
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 scientistsand
you were obviously oneactually 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
journalsI accept thatbut 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 allbefore 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
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
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% profitand we are struggling towards thatand
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
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
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 ofand 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 excessive35% 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, STMbook
publishing in particular. They were very profitable. We have seen
the demise ofbook 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
journalsthe 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 badbefore 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.