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? 

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.