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Publishers’ panel - Rocky Mountain SLA - November 21st 2002
Miriam Gilbert Liz HaighRolf Janke
Mary Waltham
www.MaryWaltham.com
Why do publications cost so much?
Where does the money go?
Where does the money come from?
What are the challenges?
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“The doors of wisdom are never shut”
Ben Franklin
Costs - some typical cost ratios
Cost category Learned journal-Universitypress
Journalwithadvertising-commercialpublisher
Societypublisher –technicaljournals
Average scholarlyjournal (after Tenopirand King: Towards electronicjournals: Realities forscientists, librarians andpublishers ISBN 0-87111-507-7(2000))
Contentcreation
30% 26% 31% 37%
Publishingsupport(Sales, G&A)
28% 33% 16% 30%
Manufacturing,paper andprinting, andonline hosting
25% 26% 25% 19%
Distributionandsubscriptionfulfillment
17% 15% 28% 14%
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Costs - fixed and variable
Fixed costs - Content creation ~ editorial office costs,
reviewing ($160 /article), editing ($320/article), SGML, HTML,XML etc
Publishing support ~ marketing (3-5% of revenues), ad sales, finance and administration
Variable costs- Manufacturing Distribution - print and online Order fulfillment - print and online
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First copy and other fixed costs Content creation costs incurred whether
product is print or online or both Publishing support costs incurred
whether product is print or online or both “New” additional costs are incurred
as/when print and online become distinct
Does publisher size matter?(Source:ALPSP Benchmarking study Sept. 2002 First copy cost in ₤’s )
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Additional costs of online publication Copy-editing ~ additional 5%/article “Typesetting” ~ additional
10-20%/article Subscription management ~
additional 10-15%/article Online hosting - varies widely ~$25 -
$96+/article/year
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Other significant cost lines
Archiving ~ digitization of content from paper archives $84.46/article (Classic articles in Neurosurgery) $0.27 cents/page for 2.3 million pages (Making
of America IV) Typically in the $10/article range
Reference linking ~ 0.25 cents per reference say $6.00 per article in the backfile
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“Out of intense complexities intense simplicities emerge”
Winston Churchill
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Where does the money come from?
Business models Print only - almost extinct! Print and online Online only Aggregations “Free”
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Where does the money come from?
Currently three major online revenue lines ~ the price of each has an impact on the others
Individual articles Personal/member subscriptions Site licenses and institutional subscriptions
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Where does the money come from?
Additional revenue
Author fees/charges Licensing/rights Reprints Advertising e-commerce
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Not all publishers are created equal Commercial publishers ~ whether public or
private (in general) must do more than ‘break even’ - shareholder pressure
Not-for-profit publishers~ same as above, publications often fund significant other society activities - member pressure or other scholarly publications for University presses
Note: Tax base quite different
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Not all publishers are created equal
In general commercial publishers launch more new products than not-for-profits, examples include product “twigging” and also new product lines
New product launches ~ in general do not expect to break-even for five years sometimes seven to ten e.g.a major reference work
Investment pay-back ~ 8 + years
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Not all publishers are created equal
Most publishers aim to do for their customers what they cannot do for them selves Peer review Quality control Efficient, effective and timely distribution Aggregation of online information thus common
online interfaces Create and build new online products ~
opportunities to support users are vast
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Mergers and acquisitions Scholarly publishing market
considered a ‘target buy’ Note: Kluwer Academic Publishers
sold for Euro 600 million which is 4 times annual sales, and an estimated 13 times operating profits
More to come …what will be the outcome for the library market?
