The Difficulty of Defining Excess

In his comment to my previous post, Tom George asks,

presumably you wouldn't argue that there are no publishers who charge excessive amounts, and impose excessive embargoes? (and therefore are contributing to the serials and access crisis). The follow on from that is to ask at what level a publisher's price is too high, or what length embargo is too long? If you start trying to suggest a fair price level or a fair embargo length, everything becomes subjective and complicated.

I wouldn't exactly argue that no publishers charge excessive amounts; rather, I don't really understand what "excessive amounts" means, for precisely the reason stated in Tom's last sentence.

It's a capitalist economy, and the goal of any for profit corporation has to be to maximize profits.  I sometimes hear librarians suggest that publishers "charge what the market will bear" as if that's an evil and insidious thing.  But that's exactly what any company does in setting the price.  Charge less than the market will bear and you're "leaving money on the table"; charge more and you risk losing money because you're cutting off sales.  It's a delicate balance, but setting that price at exactly what the market will bear is the goal.  So if a company like Elsevier (to name the name that everyone thinks of when we get into this discussion) is able to set a price that garners them profit margins in the 30% range, they're not being evil, they're being tremendously effective.  If Elsevier's CEO were to go before his shareholders and suggest that they reduce their prices in order to cut their margin to 12% because that would be more socially responsible he'd be fired.  And the corporation would be right to do so.

I do not mean to suggest that I'm the least bit happy with this state of affairs.  My institution spends upwards of a million dollars a year for Elsevier product.  This means that several hundred thousand dollars of Alabama taxpayers' money gets whisked away into that profit margin.  I think the interests of those taxpayers would be much better served if that money stayed within the scholarly communication cycle -- but that's not the world that I live in.

The solution to this conundrum is clearly not open access.    Indeed, the deal that Elsevier has struck with HHMI should turn out to be a nice little gold mine for them.  Biomed Central and Hindawi are for-profit publishers and you can be sure that if they can get to the point where they can command 30% profit margins they will certainly do so.

When SPARC was originally formed, its purpose was to compete directly with the commercial publishers by helping societies come up with high quality non-commercial journals that would charge significantly less than their commercial counterparts.  And they had some striking successes.  But they were still working within the subscription model.   When I talked with Heather Joseph a couple of weeks ago, she said that SPARC was still doing that kind of work; but you hardly hear about it, and I encouraged her to try to do more about promoting it. 

As I've said before, I have nothing personally against the commercial publishers.  Many of the people that I've met who work for them are honorable people committed to doing good, and they have a right to be proud of the work they do.  But the society publishers have proved beyond doubt that scholarly publishing does not require profit incentives in order to produce excellent work.  In my ideal world, those honorable people would be working for not-for-profit publishers and the corporations would be making their money elsewhere.  But in the real world, there's money to be made, and it's senseless to speak of "excessive" charges.

So to follow Tom's line of reasoning, if there is such a thing as "excessive" profit, and if you can't establish a dividing line between what is acceptable and what is not, then any degree of profit is not acceptable and one should be as opposed to Biomed Central making money as one is to Elsevier.

If, on the other hand, one wants to suggest that there is some dividing line and that, say, 10% (or 12 or 7) is the okay limit, then you're suggesting some kind of government regulation that oversees pricing and establishes a limit on what publishers can charge.  Now that is a fantasy.

Comments

[Marcus Banks]

Just as SPARC should do more to promote its alternative publishing ventures, libraries should get more involved in publishing journals themselves. Or at least consider whether this is viable.

There will probably always be commercial and society publishers. But the "library publisher" could be a new and interesting variant of society publisher. Library publishers could offer very reasonable subscription prices to their colleagues.

[Dennis McDonald]

Government regulation of pricing may be a fantasy, but having negotiated with various government agencies on price setting for contract services of various types, I know that government influence is definitely possible!

My chief concern is not only pricing, it's turning over even more of the scholarly publishing cycle to the government and what that might mean for innovation and experimentation. I say that as someone who has personally benefited from government funding of experimentation in scientific publishing (the NSF funded my Ph.D. dissertation research).

One area where I would hope to see innovation would be in applying social networking techniques to promoting communication among researchers. Which is more likely to support such innovation -- government agencies or the private sector?

[Bill]

> one should be as opposed to Biomed Central
> making money as one is to Elsevier

I don't think that's quite right. BMC at least provides immediate OA in return for whatever profit they make. If Elsevier converted all its journals to OA, I would not care much about their profit margin.