In recent years, many universities have concluded that the price they pay for their Big Deal journal license agreements and the resulting value they perceive have become misaligned. As a consequence, academia has stiffened its negotiating posture with leading journal publishers. The outcome of these negotiations can be grouped into two categories: rebundling and unbundling. Most attention in recent years has been given over to the search for open access, by transforming Big Deal subscriptions into rebundled transformative agreements. But last week’s news makes clear that attention is equally needed on unbundling the Big Deal — breaking it back up into a la carte elements. Will some combination of these two outcomes allow major publishers to reestablish the value of their licenses without making a major revenue sacrifice? 

Bundle of Model Mats from the Foundation Deposit for Hatshepsut’s Tomb, ca. 1479–1458 B.C. Metropolitan Museum of Art

Rebundling

Many universities and groups of them have sought transformative agreements, taking pre-existing subscription access from a traditional Big Deal and adding open access publishing services to that bundle. These rebundled transformative agreements can be found widely across Europe. Probably no publisher has achieved more than Springer Nature, which has become an open access powerhouse across Europe (although apparently this was not enough to overcome market turmoil to launch an IPO last month, after a previous effort failed two years ago).

While maximizing open access publishing, these deals have had the effect of crowning incumbent publishers as the open access royalty, securing market share for publishers and freezing out competition from new entrants, if they do not actually violate procurement regulations

Some publishers have been unwilling to set prices for transformative agreements that are close enough to price neutral for some university groups to accept. In some cases, such as with Germany and California, we have seen the universities spurn these offers and walk away from the negotiating table, canceling access to most if not all journal titles from a given publisher. 

Unbundling

But rebundling or cancellation are not the only choices available to a library facing the prospect of renewing its Big Deal. The value of the Big Deal has declined due to leakage. And, when a product declines in value, one should expect customers to demand price reductions. Rebundling has the effect of propping up the value of the Big Deal. Unbundling has the effect of driving down what universities pay for journal subscriptions. 

In the past week, three US academic institutions announced major new license agreements with Elsevier. These have in common that they have “broken the Big Deal” of bundled access to thousands of journals and replaced it with unbundled, or a la carte, access to several hundred. While their timing may have been merely a coincidence, these announcements from UNC Chapel Hill, Iowa State University, and the State University of New York, a system of 64 institutions — and others like them in recent years — point out the clear trend. 

In each case, access to the full bundle has been replaced with access to approximately 150 to 450 titles. Presumably, the financial implications of the move will vary based on the number of titles still licensed, and in SUNY’s case the extent to which individual campuses elect to add additional titles of their own. SUNY is the only of the three that included cost estimates with its announcement this week, and, in the end, it expects system-wide savings of $5-7 million annually, or a reduction in fees of 50-70%.

SUNY’s reported savings are eye-popping, given that publishers have established their pricing to make such unbundling undesirable. And yet, leakage of content and traffic has exploded in recent years, unsettling many of the assumptions underlying these pricing models. Unpaywall Journals launched last fall, is providing a simple tool for libraries to model how they can leverage this leakage in their negotiating strategies. 

Indeed, SUNY’s savings may not be entirely out of range of what other libraries might be able to achieve.The University Librarian at West Virginia University has shared that they achieved a 41% cost reduction as a result of their unbundling of Elsevier’s big deal. Florida State University also reported savings of approximately 50%. As financial  and other information is released from additional universities, it will be interesting to analyze a la carte choices and relative savings. 

Unbundling the Big Deal, rather than rebundling open access services with it, creates financial opportunities to think about open access publishing on its own merits. Rather than crowning the existing incumbents as the open access royalty, universities will be able to negotiate “pure publish” agreements more neutrally from an array of providers, fostering a more competitive marketplace. 

Interestingly, libraries themselves cannot be simply classified into the rebundling/unbundling categories. UNC Chapel Hill has a rather complex transformative agreement with SAGE. Iowa State has signed other transformative agreements, including with DeGruyter, Oxford University Press, and the Association for Computing Machinery, and noted pointedly in its announcement about unbundling its Elsevier big deal that, “The last goal, making progress on open access, was not met.” SUNY’s unbundling agreement includes a 10% discount on Elsevier APCs. The goals of any given library or library system are multi-faceted and libraries are finding willing partners in some publishers in meeting their needs.

Unraveling the Spaghetti

In response to a question following her keynote at the November 2019 Charleston Conference, Elsevier CEO Kumsal Bayazit spoke about how to achieve more equitable and transparent pricing. In her response, which begins around 40:55 in the video recording, Bayazit spoke about the complexity of pricing, including its historical bases and the differences in what customers value. Using a compelling metaphor, she pointed to the hard but important work of unraveling the “spaghetti” of different models across customers to bring greater transparency and equity without sacrificing value differences. 

While Elsevier has made plain that it would like to conclude agreements with Germany and California, it is unclear if it can be pleased with the growing number of agreements it has reached with US universities for an Unbundling strategy. On the one hand, these moves realign price with value and thereby serve to unravel the “spaghetti.” On the other hand, at least some of these unbundled agreements yield substantial revenue reduction, without meaningful cost savings to Elsevier. And so I reiterate a question I asked in November: Is it possible for Elsevier to rebalance pricing — to unravel the “spaghetti” – without a material sacrifice of revenue?

 

Note: I have worked closely in recent years with several key members of the SUNY negotiating team through advisory engagements focusing on cross-campus alignment and collaboration, publishing services, and communications; however, I did not advise directly on the negotiations with Elsevier.

Roger C. Schonfeld

Roger C. Schonfeld

Roger C. Schonfeld is director of Libraries, Scholarly Communication, and Museums for Ithaka S+R. Roger leads a team of subject matter and methodological experts and analysts who conduct research and provide advisory services to drive evidence-based innovation and leadership among libraries, publishers, and museums to foster research, learning, and preservation. Previously, Roger was a research associate at The Andrew W. Mellon Foundation.

Discussion

7 Thoughts on "To Bundle or Not to Bundle? That Is the Question"

I raised a question on another list but then decided not to follow up the comeback. It was not relevant to the main line of the discussion. This time I do not think it is irrelevant.

The question is that if libraries decide only to pay for a relatively small number of “top” journals what will happen to researchers in sub-discipline who characteristically read/scan certain specialist journals central to their fields as well as those that are central to the wider discipline. ECRs in their groups publish in these journals too. We know that.

The “big deal” suddenly gave many researchers access to these journals in digital form – journals which were too specialised (not enough demand) to be paid for on a subscription basis.

I am thinking of many journals from the smaller learned societies (often with larger companies as publishing partners) and other new journals in new fields maybe started by the larger companies approached by a group neglected (they felt) by a learned society. I have been in publishing long enough to remember when the JOURNAL OF MOLECULAR BIOLOGY struggling to get papers or subscription but it was crucial to workers in that field. Actually this was a story in the company ( Academic Press) and by the time I was working there it was already flourishing.

As Roger points out there are other ways always of getting the papers you want without buying the journal many of which, if not illegal actually, do not help the publisher much. Our (CIBER) experience recently with ECRs (see http://www.ciber-research.eu/harbingers.html) was that even these younger people prefer to find articles in their library.

I used to have an ongoing argument at Charleston with some librarians who could not accept that a specialist journal is not the same as a less good journal. I do not think anyone on this list would say that now.

Anthony

I think the trend Roger identifies is likely to accelerate with the pandemic. Library budgets will be cut significantly as college and universities see significant reductions in enrolment, endowment income, philanthropy, and state support. For academic libraries the “big deal” is an obvious candidate to cancellation. The Unpaywall Journals tool shows how significant dollars can be saved and the times make the politics much easier for librarians. How this revenue decline will be dealt with be the large commercial publishers is unclear to me, but it will certainly lead to a decline in margins. As Anthony points out, this is likely to affect smaller specialized journals and the societies that publish them. It is important to remember that many of these societies have been using surpluses (often of 25%) from their publishing operations to fund other work of the society, so the publishing losses (along with the loss of meeting and conference income) will in many cases threaten the viability of the society as a whole. Reductions in library book purchasing and university subsidies will also reduce funding for scholarly presses and put them at risk as well.

It is likely that the recovery from the pandemic will take years and there will undoubtedly be a new normal. The bottom line is that many current publishing venues will fail. New means of communicating scholarship will need to be invented. I don’t know what this will look like, but the new means will need to be more efficient and cheaper. For me this implies that they will be open (the pandemic has made the value of openness clear); scholarly societies will not be able to subsidized the operations with publishing revenues, and where commercial firms are involved, margins will need to be smaller.

I think it is important to start seriously thinking about what we want scholarly communications to look like in the post-pandemic world, because that world is going to be very different from the one we were living in just three months ago.

In my view the question of rebundling or unbundling does not fully address the fundamental underlying problems with the existing bundles. Many existing bundle prices originated as an electronic add on to existing print subscriptions 20+ years back. They thus have an underlying pricing philosophy and structure that does not align with digital realities of much lower individual subscriptions in medical fields, STEM journals with high prices for a title when they were only available in a few hundred elite universities and more recently proliferation of Green Open Access.

Without shifting to a system that conclusively disassociate from pricing created in a print world there will only be suboptimal solutions. This means there needs to be some flexibility on both sides to take some risk and embrace new transformative models. These models should be developed collaborative and not at individual publishers’ offices. Another effect of the link back to print is that most subscription journals only exist unembargoed on the publishers own (often limited) platform to enable tracking of usage. To improve utility for users there needs to be ways for this content to be available on multiple platforms that are designed around different user types needs and not around operational concerns with tracking usage for negotiation purposes. There are initiatives underway to track usage back to the copyright holder irrespective of platform. With this and other technological attribution models it will be possible to (finally) move away from printing pricing models and find new models that fairly reflect utility and value.

Hi Niels, Thanks for your comments. I completely agree with you that the tie back to print sales, which underlies some big deal pricing, remains a problem. It’s one of the reasons for the lack of alignment that I mentioned in the first sentence, and it’s one of the “historical bases” of pricing that Bayazit says Elsevier is seeking to overcome.

I don’t exactly see the connection between print-based pricing and publishers’ unwillingness to distribute their content through other platforms, but I have covered this latter issue thoroughly over the past two years, as I think you probably realize. For example,
https://scholarlykitchen.sspnet.org/2018/05/03/supercontinent-scholarly-publishing/
https://scholarlykitchen.sspnet.org/2018/10/15/syndicate-content/
https://scholarlykitchen.sspnet.org/2019/07/16/diverting-leakage-to-subscription/
https://scholarlykitchen.sspnet.org/2019/12/03/publishers-announce-plug-leakage/

You are correct the link between print based pricing business models and content only being available unembargoed on publishers platforms is more indirect. If usage can be traced back there is a chance more publishers will enable sharing through other platfroms, provided models and revenue sharing can be worked out. However I fear we will continue to see print based (single titles with upsell to a bundle) business models act as mental blocks that are reflected in the platfrom and distribution strategies. Content will for example only be shared if kept in traditional title level formats (i.e. no unbundling to article or even paragraph level). No options for a community college to say I only want (review) articles that are at a level where the students can understand or for a government function to say I only want a specific type of articles on cybersecurity irrespective of journal. AI can increasingly categorise content to very specific needs, but print based models tend to only allow for paying high charges through PPV, paying for individual titles or buying everything at heavily discounted price in acknowledgement that you probably don’t need most of the content. Without the ability to unbundle existing content containers it is difficult to fully take advantage of being digital, improve the signal to noice ratio and create even more compelling user experiences.

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