Examination of Witnesses (Questions 40
MONDAY 1 MARCH 2004
Q40 Paul Farrelly: Concentration
tends to increase margins, increase profitability. Some people
would say that digitisation reduces the barriers, but if you have
a substantial library as an independent, then face the basic costs
of migrating on to that platform without financial strength, digitisation
can clearly be a concentrator. Would you say that mergers and
digitisation overall operated to increase margins for the business
Dr Jarvis: Decrease so far, certainly
from our own experience. We have had to invest from those margins
over the past five years. There is no shortage of aggregators,
of services, people who have built independent servers; so there
are the servers which run from the major publishing houses, but
there is no shortage of places for the smallest publisher to mount
his or her journals on. Obviously, there may be a difference in
functionality, but again the value of that is decided by market
freedom, and market forces. There will be some services which
scientists will use and find the functionality enormously helpful;
other services will invest their money in different functions,
which will not be as accepted. At the end of the day, I do not
think any publisher, however small, is omitted from participating
in a digital future.
Mr Charkin: I think there are
clearly some scale advantages of being big, but I believe that
those advantages are trivial compared with the added profit from
doing a better job. A better job is typically to have a better-designed
applicationbetter websites in particularwhich attracts
people in. That is what matters.
Q41 Bob Spink: We heard about your
very high level of profits, which most manufacturers could only
dream about, and we know of course that the content of the papers
that you publish is often produced at the public expense and very
rarely at your expense. Can you tell us how much of your profit
margin is actually being invested in new digital technologies?
Can you each give the percentage?
Mr Charkin: The percentage of
Q42 Bob Spink: A percentage of your
turnover that is re-invested in development of new technologiesor
whatever the figures are; just give me the figures.
Mr Campbell: Things come up, you
Q43 Bob Spink: No, I just want the
Mr Campbell: I would guess for
next year it is going to be a lot for us because you go in cycles
and you have to reinvest in a new system. It will be some millions
of pounds next year, so a percentage of
Mr Charkin: It is 30% for us.
Mr Campbell: We certainly have
not invested as much as 30% in new technologies for this year.
My colleague is working something out to give you.
Dr Jarvis: On our STM business,
I would think it is something like 10-15%. I really cannot be
more accurate than that. Of course, STM journal publishing is
only one arm of our business, so it would be a smaller percentage
of the overall profit.
Q44 Dr Iddon: When an author submits
a paper to you, it is quite normal to send a number of free reprints.
I used to get 50 paper re-prints. We have some evidence that commercial
journals are now beginning to charge authors for copies of their
own work. Somebody from the University of Leiden has written to
the Committee complaining that he was charged
250 for a PDF file of his own paper. Is that a growing
Mr Campbell: No, it is quite the
reverse. Our company policy is that authors get a PDF free, which
they can then use to disseminate their own article; and so it
is an added service to our authors. The answer to the previous
question is 25%my colleague has just given me the figure
from the accounts.
Q45 Dr Turner: A lot of journals
are increasingly being sold as bundles. Would it surprise you
to know that there has been a certain amount of criticism of this
practice in that publishers are cutting tough deals with libraries,
which, if they want to take the leading journal at a reasonable
rate, have to take a whole lot of other subsidiary journals with
it, which they may or may not want very much. Not only that, but
these contracts go for a long time; they have penalty clauses
and so on. Do you think these criticisms are justified?
Mr Campbell: It was a new pricing
model which was pioneered in Britain and subsidised by the state
initially to get it started from HEFCE, as I mentioned earlier,
and now known as the Big Deal. In our view it is a transitional
model and we are moving to different sorts of pricing models and
working through the Big Deal as part of that evolutionary process.
It is working well; it is enabling us to get to a lot more libraries
at the moment, but I do not think it is the answer and I expect
we will evolve through that to more accurate pricing models based
Q46 Dr Turner: Are you looking to
something which will give libraries a bit more flexibility?
Mr Campbell: Yes, and based on
size of the institution, usage, the value to those institutions
of the particular type of model.
Mr Charkin: Absolutely. Flexibility,
I am sure, is going to come and we are on the way.
Q47 Mr Key: What are you doing to
preserve digital archives, and once libraries have paid for electronic
publication are they guaranteed access for ever?
Mr Campbell: Yes. One of the problems
is that publishers such as the three of us here are developing
systems quite fast and are able to create legacy, which is a huge
investment. Why I was stalling a bit on the percentage of technology
was that I was trying to work out how much we are spending on
so-called legacy this year, which is digitising backgrounds to
create the backruns you were talking about. It is likely that
the better funded publishers will be setting up their own archive
or legacy and they will be able to update the technology and it
is charged for by the subscription price to libraries, and libraries
have a permanent access to that material that they subscribe to.
The concern over, let us say, an open access or the author PAYS
model is that if you need to shift your technology, as happens
regularly, who pays? Does the new crop of authors of that year
pay for the huge investment in changing your backrun to suit modern
technology? Alongside that most large publishers are working with
the library community on library solutions as well and the British
Library is active in that and Harvard and California and the Royal
Dutch Library. There are a number of libraries who have signed
agreements with publishers to create archives outside the publishing
house as well. We have not got there yet but quite a robust system
has evolved. I would claim it is a point in favour of the submission
model, and there is a system called JStore and others that we
work with as well.
Q48 Dr Turner: What is that?
Mr Campbell: It is a North American
service where they digitise backruns of journals and sell that
service to libraries and libraries have access to the backruns
of journals. It is particularly strong in economics and ecology.
Q49 Paul Farrelly: I want to address
very briefly copyright. We only have a short time so let me put
it in the starkest terms. What would be the effect on your business
and the industry if your requirements to obtain copyright were
outlawed as an onerous term and there were restrictions placed
on inducements to assigning copyright? Also, because we do not
operate in isolation, what would be the effect on publishing in
the UK and indeed in Europe if it was adopted Europe-wide?
Dr Jarvis: I think this is one
of the most important questions and it is a philosophical question
almost because if you think about copyright and the copyright
system and how it works, the only alternative is patronage and
that is a system which we used to have where publishing was funded
by royal families or the church or governments. Since the former
two would not be active in this any more it is basically government.
What we all have to think about very carefully indeed, therefore,
is that in this industry there are certain aspects of open access
which are important and which we are looking at, but as soon as
anybody funds an author to publish there is an inherent pressure,
and history proves this, that ultimately the person who pays can
in the most benign way begin to influence what gets published,
and what the message isIn short, what we see, read and
hear. That sounds a little dramatic but I genuinely believe that
this is something which all of us have to think very carefully
about. A copyright system, which embodies the unimpeachable right
of an author to publish their work wherever they want for no cost,
is something which we would throw away at our peril. The subscription
model may sit alongside an open access systemand as I said
earlier, there may be some niche publications where it is valuable
to offer authors the chance to publish their work in an open access
system by paying for it. However if that ever replaces the inalienable
right of an author to publish their work where they want to without
any patronage from whatever source, we should beware. Copyright
is something which is essential to us. It is the author's work,
it is their intellectual capital. Once they start to be coerced
into putting it here, putting it there, I think we unpick something
which took us a long time to build.
Q50 Paul Farrelly: Anything to add?
Mr Charkin: I support that. There
is also a risk. Copyright is in an interesting legal phase at
the moment because there are various changes in electronic delivery
and such like, but it is very hard to start slicing up copyright
and saying that scientific papers are one sort of copyright and
literary novels are another sort of copyright. What has been fundamentally
strong about copyright is that it does not differentiate. It is
the author's work, it is his or her right. Starting thinking about
changing rules for one sub-sector is rather dangerous apart from
Q51 Dr Harris: I want to come back
to one of Dr Iddon's questions because he asked all of you, how
do you explain an average journal price increase of 58%, "average"
being the key word there, in the past five years compared to an
increase of 11% in the RPI, and the 58%, he said, came from the
Consortium of University Research Libraries. Mr Campbell, your
answer was, "Ah, because there are more journals now".
I am not a great mathematician but I understood that the question,
including an average price assumed, allowed for the increase in
the number of journals, so can you clarify whether you think that
figure is wrong and it is a fraudulent figure, or whether your
journals have not gone up by that much and it is some other nasty
publisher out there who is making very big profits?
Mr Campbell: There are relatively
few new journals now. The year when the most journals were launched
was something like 1968. Since then there have been fewer journals
launched each year, so this is a myth, that there are more titles
being launched, there are more papers being published, so the
big successful journals attract more copy and, even though they
might have higher rejection rates, a lot of them are growing in
size every year. If you, for example, look at the cost per article
from our list, it has gone up by 2.8%. The actual cost to subscribers
per article from last year to this year has gone up 2.8%, so it
is more or less in line with inflation.
Q52 Dr Harris: Is that across the
range or is that just Blackwell?
Mr Campbell: That is Blackwell.
Mr Charkin: Ours would not be
significantly different. The thing we measure is the cost per
access of our various papers and that has come down significantly.
Q53 Dr Harris: Does that include
the back catalogue?
Mr Campbell: That comes down hugely.
If you include the archive the cost per article which you could
access on line drops.
Q54 Dr Harris: If the libraries tell
us that the price per article has gone up, and you are saying
you are only around inflation, then some players in the market
have increased the price per article. I cannot believe there can
be this dispute over figures but I remember seeing a presentation,
and we will check this, where the price per article generally
had gone up higher than that.
Mr Campbell: Our figures are in
the open. Our price per article for 2003 was 1.77 and this year
it is 1.82. If you bought the whole list at full subscription
price, which does not happen
Q55 Dr Harris: Just to change the
subject, everyone worries about publication bias, that negative
results are not published. Do you think publishers have a role
in solving this major worry by providing a system maybe on open
access that enables all those negative studies to be logged in
some way, or do you think that is an issue not for publishers
but for the pharmaceutical industry and so on?
Mr Campbell: The pharmaceutical
industry would not publish negative results.
Chairman: Because they get a lot!
Q56 Dr Harris: Some people feel that
research on human beings is not ethical unless it is going to
be published, assuming it is fit for publication in terms of peer
review. That is what I am getting at. Is it right that we should
experiment on people and then not publish the results?
Mr Campbell: No; I think that
is a fair point. With most medical journals you have to accept
that if a negative result came through there would be, I guess,
less chance that the referees would recommend its publication.
We do sometimes publish negative results but I would think fewer
get through refereeing than other papers.
Q57 Dr Harris: That is my question.
What are we going to do about it?
Mr Campbell: People have tried
publishing journals on negative results and they have been complete
failures because nobody wants to subscribe to them.
Dr Jarvis: We could publish more
but there is a cost to it all. One could do it by open access
or by subscription model but the more papers you publish there
will be an increased cost. It does cost. As somebody said earlier,
you take this stuff from scientists and you do not do anything
to it. That is not true. We do not take manuscripts from authors
and give them back to them and charge them for that. There is
a great deal of cost and work put into that first. We have had
more papers submitted to us and we have published more papers,
which has partly contributed to the 58%. There is a lot of R&D
out there and a lot of output from it and unfortunately library
budgets have not kept pace with that. That is something which
we have banged on about for a long time. We do not write these
papers. These papers are out there and if publishers like ourselves
do not publish them other publishers do. There are new entrant
publishers coming in all the time with new ideas, new journals,
niche journals, people spinning off journals. There is a lot of
publishing out there, not driven by us.
Q58 Chairman: Would the whole system
not work in the same way if the publisher licensed the article
copyright and did not own it?
Mr Campbell: Yes. Some publishers
do not insist on full copyright assignment but in effect have
an exclusive licence to publish.
Mr Charkin: We just take a licence.
Q59 Chairman: I know.
Dr Jarvis: One of the down sides
of that, of course, is that if your author's work is then stolen
or changed, what publishers can do because of their scale and
their reach is to do something about that. Individual authors
would find it very difficult if their article was used and changed.