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Hypermedia Online Publishing: the Transformation of the Scholarly Journal

5.4.1 Journal economics

One of the most significant difficulties with print journals from the point of view of libraries has been the increase in serials subscriptions prices. The Mellon report summarised by Ann Okerson in [Okerson, 1996] found the following picture in the U.S.:

serials prices have consistently increased at nearly double inflation, with STM material being the worst offenders
the most expensive serials show the largest relative price increases
foreign publishers apparently put prices up to compensate for relative exchange rates but did not adjust the prices when exchange rates changed
three European commercial publishers (Elsevier, Pergamon and Springer) accounted for "43 percent of the increase in serials expenditure at one university between 1986 and 1987" [Okerson, 1996, pp. 188-190].

Some of this increase in cost is due to the very healthy profits earned by a few large publishers in markets characterised by near-monopoly positions and little competition. Estimates for the latest financial year (based on published information) show Return on Equity (ROE) running at 41.7% for Wolters Kluwer and 28.2% for Reed Elsevier [Wyly, 1998].

The impact of these pressures has been a trend towards decreased subscriptions for titles and a corresponding increase in the cost of these titles for the remaining subscribers. Unless unchecked, this will lead to what has been described as the 'downwards spiral of death' as fewer and fewer subscribers will have to pick up a greater share of the cost of production.

According to [Agre, 1995a]:

All types of fixed costs of consumption can raise distributional questions when they are high... This is particularly true when media that have high fixed costs of consumption (e.g., television or networked computers) compete against media that have high fixed costs of production (e.g., newspapers or books). As the latter lose their needed economies of scale and are forced to distribute their fixed costs among ever-fewer units, they will consolidate among themselves and may ultimately collapse.

In addition to the initial subscription costs, there are the ongoing costs associated with a serial subscription. Robin Peek has summarised the incongruous nature of the current system particularly well:

In this system libraries purchase and store paper that may never be read. Then they bind the journal, perhaps purchasing it again in microfilm, all of which can cost more than the original journal subscription. Then they spend even more money to house the title and maintain it until, in the not-so-distant future, the paper is about to crumble in their hands, and then they decide whether to spend more money to preserve it [Peek and Newby, 1996, p. 9].

Dyson argues much of the above discussion is in danger of being made obsolete by the new technologies and that in the new economic environment of the net the physical manifestation of content is irrelevant. What matters is intellectual processes and services, not intellectual assets and property [Dyson, 1995].

Last modified: Monday, 11-Dec-2017 14:40:59 AEDT