Open questions about the costs of the scholarly publishing system

Stuart Lawson (et al)’s new paper on “Opening the Black Box of Scholarly Communication Funding” is now out – it’s an excellent contribution to the discussion and worth a read.

From their conclusion:

The current lack of publicly available information concerning financial flows around scholarly communication systems is an obstacle to evidence-based policy-making – leaving researchers, decision-makers and institutions in the dark about the implications of current models and the resources available for experimenting with new ones.

It prompts me to put together a list I’ve been thinking about for a while – what do we still need to know about the scholarly publishing market?

  • What are the actual totals of author/institutional payments to publishers outside of subscriptions and APCs – page charges, colour charges, submission fees, and so on? I have recently estimated that for the UK this is on the order of a few million pounds per year, but that’s very provisional, and doesn’t include things like reprint payments or delve into the different local practices. All we can say for sure at this stage is “yes, it’s still non-trivial, more work needed”.
  • What are the overall amounts paid by readers to publishers and aggregators for pay-per-view articles? In 2011 I found that (for JSTOR at least) the numbers are vanishingly small. I’ve not seen much other investigation of this, surprisingly – or have I just missed it?
  • Can an overall value be put on the collective “journal support” costs – for example, subsidies from a scholarly society or institution to keep their journal afloat, or grants from funding bodies directly for operating journals? This money fills a gap between subscriptions and publication costs, and is essential to keep many journals operating, but is often skimmed over.
  • How closely do quoted APC prices reflect actual costs paid? After currency fluctuation, VAT, and sometimes offset membership discounting, these can vary widely, which can make it very difficult to anticipate the actual amount which will be invoiced. (A special prize for demonstrating the point here goes to the unnamed publisher who invoices in Euro for a list price in USD, and including annotations showing a GBP tax calculation). Reporting tends to be based on actual price paid, which helps, but a lot of policy and theory is based on list-price estimates.
  • How are double-dipping/hybrid offsetting systems working out, now they’ve had a couple of years to bed in? There has been quite a bit of discussion looking at the top-level figures (total subscriptions paid plus total APCs paid) which suggests that the answer is “total amounts paid are still rising”, which is probably correct. However, there’s very little looking in detail at per-journal costs, how the offsets (if any) are calculated, and whether or not the mechanisms used make sense given the relatively low number of hybrid articles in any given journal. Work here could help come up with a standard way of calculating offsets, which could be used in future negotiations. Hybrids won’t be going away any time soon…
  • What contribution to the subscription\publishing charges market comes from outside academia? We tend to focus on university payments (as these are both substantial and reasonably well-documented) but there are very large markets for subscription academic material in, for example, medicine, scientific industry, and law. These are not well understood.

And, finally, the big one:

  • How much does it cost (indirectly/implicitly) to maintain the current subscription-based system? We have a decent idea of how much the indirect costs of gold/green open access are, thanks to recent work on the ‘total cost of publication’, but no idea of the indirect costs of the status quo. And we really, really need to figure it out.

To illustrate that last point, and why I think it’s important…

A large number of librarians (and others) spend much of their time maintaining access systems, handling subscription payments, negotiating usage agreements, fixing user access problems, and so on. Then the publishers themselves have to pay staff to develop and maintain these systems, handle negotiations, deal with payments, etc. Centralised services like JISC’s collective negotiation mean more labour, and some centralised services like ATHENS can be surprisingly expensive to use.

Let’s make a wild guess that it comes down to one FTE staff member per university (it probably isn’t that much work for Chester, but it’s a lot more for Cambridge, so it might balance out); that’s about 130 in the UK. Ten more for all the non-university institutions. Five more for the central services. Five each at the five biggest publishers and another ten for all the others. Total – for our wild estimate – 180 FTE staff. (While the publisher staff aren’t paid by the universities, they’re ultimately paid out of the cost of subscriptions, and so it’s reasonable to consider them part of the overall system cost.)

This number compares interestingly with the 192 FTE that it was estimated would be needed to deal with the administration of making all 140,000 UK research papers gold OA – they’re certainly in the same ballpark, given the wide margins of error. It has substantial implications for any “just switch everything”-type proposals, for obvious reasons, but would also be a very interesting result in and of itself.

Page and colour charges: they’re still a thing

So, I have a paper out! Very exciting – this is my first ‘proper’ academic publication (and it came out the day after my birthday, so there’s that, too.)

Gray, Andrew (2015). Considering Non-Open Access Publication Charges in the “Total Cost of Publication”. Publications 2015, 3(4), 248-262; doi:10.3390/publications3040248

Recent research has tried to calculate the “total cost of publication” in the British academic sector, bringing together the costs of journal subscriptions, the article processing charges (APCs) paid to publish open-access content, and the indirect costs of handling open-access mandates. This study adds an estimate for the other publication charges (predominantly page and colour charges) currently paid by research institutions, a significant element which has been neglected by recent studies. When these charges are included in the calculation, the total cost to institutions as of 2013/14 is around 18.5% over and above the cost of journal subscriptions—11% from APCs, 5.5% from indirect costs, and 2% from other publication charges. For the British academic sector as a whole, this represents a total cost of publication around £213 million against a conservatively estimated journal spend of £180 million, with non-APC publication charges representing around £3.6 million. A case study is presented to show that these costs may be unexpectedly high for individual institutions, depending on disciplinary focus. The feasibility of collecting this data on a widespread basis is discussed, along with the possibility of using it to inform future subscription negotiations with publishers.

The problem

So what’s this all about, then?

We (in the UK particularly) have spent a lot of effort trying to reduce the cost of the scholarly publishing system, which is remarkably high; British university libraries collectively spend £180,000,000 per year on subscriptions, comparable to the entire budget of one of the smaller research councils. The major driver here is open access – trying to make research available to read without charges – and so there has been a lot of interest in trying to arrange matters so that the costs of publishing open access don’t rise faster than the corresponding reduction in subscriptions. The general term for this is the “total cost of publication” (TCP) – ie, the costs of all the parts of the system, including both direct spending and indirect management costs (it’s surprising how much it costs to shuffle paperwork).

This is a sensible goal – it keeps the net cost under control – but the focus on OA costs and subscriptions misses out some other contributions to the balance sheet.

Historically, a lot of the cost of scholarly publishing was borne by authors or their institutions through publication charges – page charges, colour charges, submission charges, and a few other oddities. These became less common (for various reasons, and there’s an interesting history to be written) through the 1980s, and – outside of open-access article processing charges – compulsory publication charges are now rare for most journals in most fields. To many researchers (including a lot of those who’ve helped set OA policy), they simply don’t exist as a significant concern.

However, during 2013-14 it became rapidly apparent to me that my institution was spending a lot of money on page charges, which didn’t fit with what was being reported elsewhere, and didn’t fit with the general recommendations from the funding bodies on how to allocate costs. These charges were not being taken into consideration in the various TCP offsetting schemes, with the effect that we were seeing a lot of spending going direct to publishers, but outside the carefully constructed framework for controlling costs.

The study

I dug back through the recent literature on the costs of journal publishing – there had been a flurry of studies in the early 2000s as people began to work out how to handle OA costs – and tried to determine what the levels of other “publication charges” had been just before OA spending took off. It turned out to be tricky to come up with a firm estimate, but my best guess was that non-OA publication charges were around 3-5% of subscription costs in 2004-5, and had dropped since then. By now (ie 2013/14), it’s probably around 2%, assuming a continual gentle decline.

Firstly, this is quite a lot of money. If British universities spend £180,000,000 per year, then 2% is a further £3,600,000 – comparable to forty or fifty PhD studentships. It’s particularly striking when we bear in mind that this is money many institutions may not realise they are spending.

Secondly, it’s clear that the cost is distributed very erratically. My own institution spent the equivalent of 15-18% of its subscription budget on non-OA publication charges, driven mainly by very heavy page charges in certain well-used earth sciences journals. (From another angle, Frank Norman has since reported that his institution, in biomedicine, had non-OA publication charges equal to about 10% of subscriptions, and in the early 2000s it was three times that.) Given the disciplinary concentration, it’s likely that spending in universities is similarly patchy – individual departments may have dramatically higher publication costs than the overall average.

Thirdly, this spending is, currently, invisible to policymakers. Of the 29 institutions who provided article-level spending records for 3,721 papers in 2014, only fifteen individual papers could be identified as having page or colour charges (mostly at Leeds), with another ten mentioned in the general reports. Twenty-five papers is clearly not going to get us anywhere near the overall spending estimates. This data isn’t being collected centrally by RCUK/JISC – who are otherwise doing sterling work on tracking APCs – and it’s not clear if it even gets collected centrally by universities. The majority of non-OA publication charges may just disappear into the morass of “miscellaneous spending” in grant budgets.

Where next?

Firstly, we need to get a good idea of what’s actually being spent. My 2% estimate is a pretty wide one – I wouldn’t be surprised if it was 1% or 3%, or further away. The methodology we used was quite time-consuming – effectively identifying every paper with possible charges and chasing the authors to confirm – but it did work. Perhaps a better method, for larger institutions, would be sampling the departments with probable concentrations of page charges, or it might be that some institutions have robust enough finance systems that a lot of cases can be identified with a bit of research. Perhaps we can even obtain this information direct from publishers. Whatever method is used, the existing RCUK/JISC APC reporting infrastructure offers a good way to report it to a central body for aggregation, deduplication, and republication.

Secondly, we need to account for non-OA publication charges as part of the total cost of publication. They are smaller than APCs, but they are very significant for some institutions. While it may not be appropriate to use the same offsetting schemes, if they’re not brought into the equation there will be an risk that publishers are tempted to increase them dramatically – an extra revenue stream which is not capped and controlled in the way that subscriptions and APCs are. There’s no sign that anyone is doing this now – and most of the major commercial publishers no longer use page charges – but it remains a concern.

Lastly – the “more research is needed” section – there are two big questions still outstanding for the total cost of publication, even with this new element added.

  • What about the indirect costs of subscription publishing? We have a good handle on the indirect costs of running repositories and handling OA payments, but we have no idea what the infrastructure to keep a subscripton system working costs us. This might include, for example, things like – the cost of staff time to manage subscriptions; the cost of staff time to run authentication and proxy servers; the cash cost of third-party authentication services like Athens; the cost to the publishers of maintaining security barriers; the cost in wasted researcher time trying to obtain material; &c.
  • If everything is expressed as a proportion of subscription spending, how much is that? My £180,000,000 figure is an inflation-adjusted estimate, based on data from SCONUL in 2010/11. There have been more recent SCONUL surveys, but not published. A firm understanding of how much we actually spend is vital to actually make sense of these results.

Taxation holes

According to the Treasury, there are currently 1,042 ways in which you can gain tax relief in the UK. Since I suspect your reaction was the same as mine – to wonder what on earth some of them were – have a selection…

  • There is no capital gains tax payable on the sale of military gallantry medals, unless you yourself bought them. (Intriguingly, this suggests that if you were to exchange something for a medal of equivalent value, then sell it, you could effectively avoid CGT. Presumably the market is small enough not to make this worthwhile.) Likewise, there is no CGT on the sale of cars (but not other motor vehicles) or on gambling winnings. (I think I knew this, but I am still unsure as to why.)
  • Land that has to be transferred from one local constituency association to another, following boundary changes, is exempt from taxation.
  • There is no climate change levy on the costs of any fuel used to light a ship whilst in international waters, which must be a horrendous piece of accounting.
  • There is no corporation tax on agricultural shows, local amateur sports clubs, or most of the activities of the nuclear decommissioning authority.
  • Any research into a vaccine for TB, malaria, or HIV/AIDS gets an additional 40% tax reduction on top of the existing research tax relief.
  • There is no excise duty on Angostura bitters, black beer (malt & molasses), any spirits used for medical or scientific purposes, or any cider where the brewery makes less than 7,000 litres per year.
  • There is no duty on fuel for international flights, and no air passenger duty payable on flights leaving the Highlands and Islands. (It is very difficult to manage both at once.)
  • There is no income tax charge for any personal security expenses required by your employment, any travel and subsistence received as part of your official duties if a minister or opposition frontbencher – and if the Foreign Secretary, your residence at Chevening House – any coal provided to colliery workers, or any income from selling micro-generated electricity. You are also exempt from income tax if, somewhat specifically, you are a foreign national resident in the UK for the purpose of “helping to deliver” the 2012 Olympics.
  • There is no landfill tax on disposing of the remains of domestic pets, or material dredged from harbours.
  • There is no VAT on banknotes for domestic circulation, houseboats, funerals, children’s car seats, bike helmets, museum entry charges, prescriptions, the UK portion of international defence projects, gold for investment, private education, Royal Mail postal services, sales in charity shops, empty homes (this seems a bit of a gift to the buy-to-let speculators!), lifeboats, trade union memberships, and nicotine patches.