Scholarly journals rely on a complex mix of revenue streams. The complexity of the system makes it difficult to directly model the economic impact of major upheavals, such as the current trend toward public access mandates from research funders. Revenue sources other than subscription fees seem poorly understood and rarely acknowledged by those setting policy, but they need to be factored in to policy decisions and publisher financial planning.
In yesterday’s post, David Wojick presented an approach for analyzing the impact of funding agency public access policies on scholarly journals. As noted in the comments, I feel this approach is flawed for a variety of reasons, one of which is that it doesn’t deal with revenue streams beyond subscriptions. This does not accurately reflect the way that many (most?) journals earn their keep. Though it is difficult to tie down specific numbers, estimates suggest that somewhere between one-quarter to one-third of STM journal revenues come from sources other than academic subscriptions.
That’s a pretty large amount of revenue that needs to be accounted for, and it’s a particularly important set of revenue because much of it comes from outside of the research community. As we seek favorable new policies, one goal is to keep research funds focused where they should be–paying for research. Any support for journal expenses that shifts the financial burden off of the researchers is very welcome.
Much of this non-subscription revenue, in my experience, comes from what’s often called “secondary rights” licensing, primarily licensing the distribution rights for published papers to aggregators like Ovid, EBSCO, ProQuest and JSTOR. I’ve worked with journals where aggregator rights make up less than 1% of total revenue, and journals where they comprise more than 50% of what the journal brings in. A smaller, but still significant stream is pay-per-view (PPV) revenue from access to individual articles.
Both these revenue streams would seem to be directly threatened by public access policies mandating free availability of articles after an embargo period.
When the only articles that can bring in PPV funds are those less than 12 months old, that drastically cuts inventory and sales rates – especially if it is widely known that the content becomes free in a matter of time. What happens to an innovator like DeepDyve, which offers article rentals for a low rate to non-subscribers, when their rental inventory will be massively reduced?
Journal aggregators provide access to a broad array of material, including journal articles from many publishers. The journal articles are not immediately available upon publication, but enter these programs after an embargo period, typically one or two years. The services offer lower cost access to an enormous number of journals to institutions that want to offer these resources to students and others, but that don’t need immediate access to the newest and latest articles. These are often schools where research programs are not the primary focus, or libraries seeking to broaden their holdings by including subjects outside of the core research areas of the institution.
If most articles are made freely available, either immediately or after 12 months, then there seems little reason to continue to pay for the journal content in these sorts of packages. That may spell doom for this segment of the aggregators’ business models and an end to an important source of financial support for journals. It’s perhaps not surprising to see aggregators diversifying and investing heavily in new ventures, as these packages represent an important tentpole and their loss will be a significant blow.
Consider also lost revenues from the Copyright Clearance Center where policies requiring a Creative Commons license would allow unpaid reuse of articles. Suddenly, the revenues from this source also dry up. Together, these various streams all add up to a significant portion of journal financial support.
Some will clearly benefit from these policies. The teaching institution that can drop their aggregator subscriptions can instead put those funds to other needs. The pharmaceutical company that wants to use a figure from your paper in their advertisement no longer needs to pay to do so. But those savings have to be offset somewhere, and that likely means a larger financial burden shifting to the research community.
When a business loses one revenue stream, it increases the demands on the others. As policies continue to limit the ways that journals can cover expenses, more and more pressure is placed on the few revenue generating activities allowed: subscriptions and open access article processing charges.
We already see publishers charging increased fees for CC-BY licenses to replace lost secondary rights revenue. It seems counterintuitive on the surface, but policies that broaden public access to research articles may indeed result in higher subscription prices. Measures taken to alleviate the “serials crisis” may instead make it worse by limiting financial models for journal support to channels that come directly from researchers and their institutions rather than outside sources.
These secondary effects of public access mandates don’t seem to be accounted for in most policies. Embargoes remain an important tool to help preserve subscription revenues, but they may not be long enough to preserve secondary rights revenue. Complex systems are difficult to model, particularly in conditions of major upheaval, and most policy seems based on a fairly rudimentary approach to journal finances.
A reduction in secondary rights revenue seems almost certain, and research societies and publishers need to factor this in to long term financial planning.