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Hypermedia Online Publishing: the Transformation of the Scholarly Journal

6.2.9 New economic models

There is a very large literature dealing with the economics of scholarly journals, much of which predates the arrival of e-journals.With respect to the possibilities for changing the prevailing economic models, the best known protagonist is Stevan Harnad. His economic arguments against the current system of economics for publishing scholarly research are detailed in [Harnad, 1991], [Harnad, 1995b], [Harnad, 1995a], [Harnad, 1995d] and summarised in [Brent, 1995]. Harnad's views on the economics of on-line versus paper are neatly (if somewhat tersely) summarised in [Okerson and ODonnell, 1995']:

In brief: Paper means substantial expense. Substantial expense means copyright protection. Copyright protection means fees. Fees mean 'protection' of the scholar's work from nonpaying eyeballs. THAT is precisely what the scholar does NOT want. (p. 33)

In reviewing the recent literature, much of the debate surrounding journal economics revolves around the relative proportions of first copy costs versus the incremental copy + distribution costs for journals in general and e-journals in particular. This has come to be characterised as the '70:30' debate. Harnad's view is that the ratio is 30:70 and that therefore considerable savings are possible by moving to electronic journals only and saving the distribution costs. The consensus view of most publishers is that the ratio is at best 70:30 and that therefore little saving is possible [Marks, 1995]. In a carefully worked out case study, Malcolm Getz shows that the costs for printing and mailing (both fixed costs and variable costs) for the American Economic Review are 38% [Getz, 1997]. [Lynch, 1994b] points out that one should also include what he calls "marketing and fulfilment costs" (p. 24) or the costs of doing business.

In fact, these two apparently diametrically opposed positions may not be analysing directly comparable processes. The costs inherent in a system designed from the start for electronic processes and output are very different to those for a system structured for print that is adding electronic output on as an option. Indeed, most existing print journals that are adding parallel electronic delivery are proposing 10% increases in subscription charges.

Phil Agre's analysis [Agre, 1995b] argues that the situation with regard to economic models for new media is in fact significantly more complicated than a simple analysis of first copy versus incremental copy costs. He argues that both the costs of distribution and consumption have fixed and marginal components, and that all combinations need to be considered.

The fixed costs of distribution are the costs necessary before distributing the first copy of an e-journal. If we assume network distribution (rather than, say, CD-ROM) then much of this is already in place in the developed world. Where it is not in place, it will probably be rolled out for other reasons not associated with electronic publishing. This will allow epublishing to piggyback on other digital services.

The marginal costs of distribution are the costs associated with each successive copy of an e-journal. In common with most information products, these costs will be low because of the ease of production. If no physical e-journal is being distributed then copying the bits and sending them down a network is a very low cost operation.

The fixed costs of consumption are the costs to acquire the hardware and software and the skills to use both of them in order to access e-journals. Because both machine costs and skill-acquisition costs will be largely paid as part of other activities (need for a networked computer to access things other than e-journals, need to learn a Web browser to access the corporate intranet), these costs will be low for e-journals. For nonprofessionals, these fixed costs of consumption may raise a barrier to access. They are unlikely to be an issue for the main target audience of an e-journal.

The marginal costs of consumption are mostly the price of the e-journal (assuming it has one). It may also be necessary to factor in access time and usage time. Access time for an e-journal that is delivered to a scholar's desktop is lower than a journal that requires a visit to the library and much lower than a journal that can only be accessed via document delivery. Of course, a document delivery service that automates the request process for the scholar will only then involve the inconvenience of waiting for the document and re-invoking the scholarly processes that were interrupted by the need to request the document in the first place.Usage time can be quite significant if the technology or user-interface for the e-journal act as a barrier to efficient use. As a minimum starting level an e-journal should be as least as easy to use as a print journal.

No matter what the publication technology, management of the publishing process is a necessary activity if one wishes to achieve acceptable and reliable quality, and this management will cost ((someone) money. Fytton Rowland, coming from a background of 25 years experience in working for not-for-profit learned-society publishers, argues that:

while a journal publishing 15 papers a year could be run on an "amateur" basis, one publishing 1500 papers a year cannot, regardless of the medium it is published in. The sheer administrative load of organizing the input, refereeing, copyediting, formatting, and distribution of that many documents (including the ones that get rejected, which generate work too) requires full-time staff. And since these people have to eat, they need a salary. Contrary to what some participants in discussions of electronic journals have alleged, it is this area of "first-copy cost" that is responsible for most of the cover price of a journal, not the paper, printing, binding and postage costs. Yes, a purely electronic journal is inherently somewhat cheaper than a paper one; but not a tiny fraction of the cost. [Rowland, 1994]

Karen Hunter, Senior Vice President of Elsevier Science has similarly argued that "It is expensive for a publisher to make the transition for existing journals from paper to sophisticated, robust electronic publications that smoothly link with those of other publishers" [Hunter, 1998].

There is little available internal cost data from existing publishers; they (rightly) regard this as commercially sensitive information. There has been some research to try and quantify these costs. One of the foci of Project ELVYN was to examine exactly what the costs of would be to libraries and publishers in providing an electronic version of an existing print journal [Rowland et al., 1995] [Meadows et al., 1995]. This project found that the "effort and cost of starting up an electronic version of a journal- where this includes graphics and equations - are not negligible" [Meadows et al., 1995, p. 231].

At present, a range of e-journal financing models are being tested in the market place, including free access, site licences (often to large consortia of sites), page charges levied on authors, pay per view, and conventional subscriptions or even a combination of some of these [Day, 1995]. No-one seems brave enough yet to predict what a long-term sustainable model might look like.

Last modified: Monday, 11-Dec-2017 14:40:00 AEDT

© Andrew Treloar, 2001. * http://andrew.treloar.net/ * andrew.treloar@gmail.com