Principles for a New System of Publishing for Science

Prepared for the Second ICSU Press-UNESCO Conference on Electronic Publishing in Science

E. Shulenburger, Provost
University of Kansas

The conviction is now widespread that the existing system of scholarly communication through traditional journals is breaking down. The most visible symptom of the breakdown is the inordinately rapid price inflation of journals and the resulting subscription cancellations by libraries. Below I delve into the economic reasons for the breakdown, outline the suggested remedies and convey a report on the elements of a proposed replacement system of scholarly communications arising out of a March 2000 meeting in Tempe, Arizona.

The Peculiar Market for Scholarly Communications

The function of price is to ration the available quantity of a good such that it ends up in the hands of those who have the ability and desire to purchase it. Market economies, by definition, use the market to set prices and to distribute goods. Rising prices for a good preclude the purchase of that good for some, but provide an incentive for producers to produce more. Ultimately, production of the good increases and price is reduced by competition and supply to the cost of producing additional units of the good.

To economists, scholarly journals and journal articles are "goods." In recent years their prices have risen significantly and the quantity of journal articles has also risen. According to the Association of Research Libraries, serials subscription prices in U.S. dollars rose 207% between 1986 and 1999. During the same period, Ulrich's International Periodicals Directory's listing of titles increased by 55%. Is this increase in quantity-supplied evidence of a market moving toward equilibrium? Are we about to see falling prices in response to increasing supply?

Perhaps. But if this is so I expect that such price behavior will occur in the long run, a period when, as Lord John Maynard Keynes observed,"We are all dead [1]."

What keeps this market from having prices that respond to increased supply is its very nature. It is highly segmented, with the most prestigious segments being nearly completely price inelastic. These segments include those top few journals in each discipline that scholars and practitioners understand to be the repositories of the most carefully refereed literature. Publishing in one of these few journals on a repeated basis signals that an established scholar is among the elite; publishing a single article identifies a young scholar on a trajectory to join that elite. No reputable academic research institution in which the discipline is studied would seriously contemplate dropping a subscription to one of these journals. It is not easy for a journal to enter this elite group. Because these journals publish what is acknowledged to be the best material in a field, new scholarship is sent there first and appears in journals in lower tiers only if it is first rejected by those in the top. Journals can rise into this top tier but it takes much time to develop top tier cachet. Generally the route to the top is through the emergence of a new sub field that is not initially published in the established top journals; for example the emergence of econometrics spawned journals that are now in the top tier of economics journals. Importantly, it is not head to head competition that generally leads to the emergence of a top tier journal but expansion of the field.

Inelastic demand permits one to raise prices with subscription quantity falling less rapidly than price rises. Profit margins can be increased when prices are in this range and increased profit margins can then be maintained. According to Brendan Wiley [2] the top four commercial publishers of scholarly journals, Wolters Kluwer, Reed Elsevier, Wiley and Plenum had average net profit margins of 18.8% in 1997, compared with the U.S. Standard and Poor's periodical industry net profit margin of 5%. Further, looking and focusing on only one of the four, Wiley observes: "According to Reed Elsevier's annual report, the operating margin of the scientific segment ran at 40.28% (1997), 41.77% (1996), and 39.66% (1995) as a percentage of sales. As a point of comparison, Microsoft's operating income as a percentage of sales was 45.17% for 1997, 35.50% in 1996, and 34.33% in 1995." Clearly the leaders in the commercial segment of the industry have been able to develop abnormally high profits and maintain them overtime, an artifact consistent with relatively price inelastic markets.

But increased prices also can result from cost increases. Do price increases in this industry reflect cost increases? Undoubtedly some do. But if one examines an industry utilizing roughly the same technology to produce its product and finds that price increases are far less than in the serials industry, much doubt is cast on the thesis that price increases follow cost. According to the Association of Research Libraries [3], monograph prices were increased only 65% during the 1986 to 1999 period while the serials industry increased prices by 207%. [4] When one examines profit margin and price performance data from a related industry, it appears that ability to set price, rather than cost, is driving price.

Recent research confirms that control over larger number of journal titles affects journal pricing. Mark McCabe concludes, "Briefly, our results for journals sold by commercial publishers indicate that prices are indeed positively related to firm portfolio size, and that mergers result in significant price increases."[4] The many successful attempts by large commercial publishers of scholarly journals to acquire individual journal titles and to acquire other commercial publishers is consistent with the thesis that firm behavior is directed toward maintaining inelastic prices.

I am the provost of a research university, the University of Kansas, and chair of the Council on Academic Affairs of the National Association of State Universities and Land Grant Colleges, a council made up of the provosts of over 200 research universities. My concern and that of my colleagues is the effect of the price system on allocation of access to the research literature. At member libraries of the Association for Research Libraries the number of serials subscriptions dropped 6% from 1986 to 1999 while the number of new monographs purchased dropped 26%.[6] Thus less scholarly material is being subscribed to in absolute terms but since the amount of scholarly material extant has increased, as the 55% increase in serials titles cited above demonstrates, faculty at Association for Research Libraries institutions have access to a reduced relative proportion of the scholarly literature than in 1986.

Since scholarly literature is the building block for new scientific discoveries, a prima facie case can easily be made that reduced access to the research literature reduces the potential for scientific progress. However, does reduced access through libraries equate to reduced access to the research literature altogether? There is abundant reason to doubt that the equation holds. For example, James Langer, the president of the American Physical Society, states that some of his colleagues, especially the string theorists, "for research purposes don't need print journals at all [7]. His colleagues rely on the Los Alamos server, a repository of unrefereed manuscripts. A common experience we all share is membership on list serves that present manuscripts reporting what colleagues in our own areas are doing. A search of any university website turns up manuscripts on many topics. This so-called "gray literature" provides access to scientists to much that is not owned or catalogued by our libraries.

But while the gray literature may provide access to material unavailable in one's university library it is not an acceptable substitute for library access to the scientific literature. The gray literature generally is not adequately indexed and archived such that one can systematically search or rely upon it as a repository of scientific information in the future. One can easily make the case that relying upon it as a source of transmitting and preserving the scientific literature will create great difficulties or impossibilities in accessing that literature in the future. (The author has cited some of the gray literature of the scholarly communications movement in footnotes. While web sites for this literature are accessible now, no assurance can be given that they will remain accessible 75 years into the future.) In addition, much of the gray literature is accessible only to those who are in certain social or professional networks. This system is hardly conducive to access to the literature by new scholars and scholars in the third world who are not privileged to have such access on their desktops.

Using price to ration access has resulted, in my view, in an inappropriate loss of access to the literature. Rationing by price is inappropriate when use of a good by one individual does not reduce its availability or utility to other individuals. Such is clearly the case with scholarly literature. Unlike physical goods, access to and knowledge of the scholarly literature may well increase the societal value of the good. Economists call such goods "public goods." An example of such a public good is the polio vaccine where increased access and use improves the lives of all those in the community. With goods whose public benefit is great, market societies often choose to either subsidize access or to make them available for free. Market- rationed access limits availability and reduces benefit.

It is especially curious that we have fallen into market-rationed access to scholarly communication because the public generally funds the production of the research that is reported in scholarly journals. The ultimate funding source may be a publicly-funded research grant, a taxpayer-funded institution, student-paid tuition, etc. The research costs are funded by the public, the results of that research are written by the scholars that produced the research, submitted to a journal and refereed by other scholars, and then given in total to a journal that edits it, publishes the manuscript in a journal and then charges whatever price the market will bear for that research. Note that the journal is not constrained to charge for the value that it added to the article by the publishing process; it is able to charge for the full value of the article even though it added only a fraction to its value.

Logic of this sort led a group of Association of American Universities' provosts to declare that the following principle should apply to scholarly literature: "Common ownership of goods... holds that research and scholarship are products of social collaborations and are assigned ultimately to the community."[8] Because of this conviction and the generally held conclusion that it is inappropriate to ration scholarly literature by price, many proposals have been made and many efforts are underway in the United States to regain access to the literature for the community. Below I briefly describe some of those proposals and efforts.

Proposed Remedies

1-Increasing Library Budgets While many institutions are doing this, few are succeeding in keeping up with cost increases; I know of none that are keeping up with the pace of additions to the literature. Increasing budgets is doomed to failure as a strategy for increasing access to scholarly literature if employed on a large scale because demand for key segments of the scholarly literature is price inelastic and the supply of top ranked journals in each field is also price inelastic. Increased budgets for library material will simply cause prices for scholarly journals to increase even more rapidly. It is clear that larger budgets will not cure this crisis.

2-Preprint Servers. The most famous server is at Los Alamos and serves the physics community (http://xxx.lanl.gov/ ). Its cost for making the literature available to the community is only $1 per article. While it is a source of nonrefereed material, it is very widely used by the community. Unfortunately, the widespread availability of literature through this source has not led libraries to drop subscriptions to physics journals. Thus it has not reduced the libraries' cost of accessing the literature.

3-Open Archives Initiative. This initiative aims to create archives that are accessible and interoperable in order to efficiently distribute scholarly information. The effort grows out of e-print servers like the one in Los Alamos. At various sites, software that will enable institutions to place scholarly works on local servers and to have that material accessible worldwide as part of a virtual collection is in beta testing. The specifications for the system arose out of the Santa Fe convention [9].

4-Minimal Refereeing Servers. The U.S. National Institutes of Health have put in place a resource called PubMed Central. One part of PubMed Central is a free electronic distribution source available to journals that choose to use it. The other part was a proposed minimal refereed service, which was supposed to make articles available to the biological/medical community in a manner similar to that of the Los Alamos server [10]. The medical community in particular found unacceptable the distribution of any lightly refereed or unrefereed literature, especially if anyone could infer from the distribution source that it was "approved" by a government agency.

5-SPARC (Scholarly Publishing and Academic Resources Coalition). This coalition aims to provide alternatives to the commercial press and has spawned a number of ventures, among them are journal titles that directly compete with those published by large commercial houses. Other SPARC ventures attempt to keep the scholarly literature in society hands and make it more easily and usefully available to scientists. SPARC's members provide a market for the products they spawn and help assure them of success .[11]. I sit on the Board of Directors of an innovative SPARC effort called BioOne. BioOne is an electronic collection of 30+ whole organism biology journals that will be made available electronically in a single, searchable package in March of 2001 [12].

6-Antitrust Activity. U.S. antitrust authorities have yet to initiate a major action against an anticompetitive move by large commercial journal publishers. The difficulty is the criteria used in pursuing cases. Generally no publisher holds a proportion of the market sufficient to trigger action when it acquires another journal. The Association of Research Libraries has asked that the Justice Department investigate the proposed acquisition by Elsevier of a portion of Harcourt General, including Academic Press. I note that European antitrust authorities have successfully opposed some combinations.

7-Decoupling. This is a proposal by a group of Association of American Universities' provosts that disciplinary societies set up boards to referee manuscripts so that refereeing could be dissociated from publication. The logic is that faculty evaluation groups that decide issues of tenure, promotion, salary, etc., attach great prestige to authors whose papers have been accepted by top tier journals. The ability of a journal to transmit such value to those who publish in its pages in turn creates great demand for that journal. Providing a method of refereeing papers separate from the journal review process would break this chain and reduce the ability of the journal to create value for itself by refereeing faculty work [13]. Many U.S. academics fear that decoupling would result in monopoly review processes by societies that might stifle creativity and reduce scientific progress [14]. At this point no society has established a decoupled review process.

8-Buying Cooperatives. Many library coalitions exist in the U.S. and elsewhere that aim to use the monopsony-like power of the associated libraries to offset the monopoly-like power of commercial publishers. Generally such cooperatives are successful in moderating price increases or softening restrictive use clauses. Unfortunately the cooperatives' members don't have the freedom to tell the suppliers of journals like Brain Research they will not buy the journal if their conditions are not met as such journals must be part of selected research library collections. Without this ultimate bargaining power, the cooperatives' impact on prices is severely limited.

9-NEAR (National Electronic Article Repository) NEAR is a proposal by the author of this paper that a publicly accessible repository be established into which all articles would be placed 90 days after journal publication. This proposal aims to limit the exclusive ownership of manuscripts by the journal to a 90-day period. Because those manuscripts would be freely available 90 days after publication, a journal's ability to raise prices would be limited as libraries could simply wait 90 days and have the articles for free. This is a conservative effort aimed at providing publishers sufficient revenue to cover the cost of refereeing, editing and publishing the journal but returning the remainder of value to the public [15].

10-Author Boycott. As of March 11, 2001 approximately 10,000 scientists from 109 countries have signed the following journal boycott pledge: "To encourage the publishers of our

journals to support this endeavor, we pledge that, beginning in September, 2001, we will publish in, edit or review for, and personally subscribe to, only those scholarly and scientific journals that have agreed to grant unrestricted free distribution rights to any and all original research reports that they have published, through PubMed Central and similar online public resources, within 6 months of their initial publication date [16]." This effort incorporates elements from the PubMed Central and the NEAR efforts.

11-Control of Societies by their Members. As faculty have become aware of the complex and serious problems confronting scholarly communications, they have begun to insist that their societies retain ownership of journals rather than selling them to commercial publishers and that the journals be operated and priced such that all journal revenue be used to support only the journal. Actions of this sort may keep the problem from growing worse but will not cause prices of commercially owned journals to be reduced.

This impressive array of thought and activity reflects the discontent with the current scholarly communications system. Each of the activities/proposals has much individual merit. But one must be mindful of the words of H.L. Mencken: "There is always an easy solution to every human problem--neat, plausible, and wrong [17]. While any or all of them may have roles to play in the future of scholarly communications, they do not now form a system on which scholars can rely for distribution and preservation of scholarly communication. The effort to develop the parameters of such a system is described in The Tempe Principles: Development of Principles for Emerging Systems of Scholarly Communications.

Because of the widespread recognition of the severity of the problem, the Association of American Universities, The Association of Research Libraries and the Merrill Center for Advanced Studies of the University of Kansas, convened a gathering of knowledgeable university presidents, provosts, librarians, presidents of scholarly associations, librarians, heads of university presses and representatives from the ARL and AAU to attempt to establish principles that should govern a new system of scholarly communications. Only representatives of the academy were invited, as our aim was to describe the conditions creating a scholarly communications system that would serve the academy.

The gathering produced the following principles that were agreed to unanimously by the participants. The Association of American Universities, the Council on Academic Affairs of the National Association of State Universities and Land Grant Colleges and the Association of Research Libraries have endorsed it for discussion on university campuses during this academic year. Many vigorous discussions have already been held and there is much support for the principles in the U.S. academy.

The Principles certainly are applicable beyond the boundaries of the United States. In fact, as the scholarly communications system is worldwide, solutions must be also. I am very pleased for the opportunity to report the Principles to this conference in the hope that they will lead to development of a new worldwide scholarly communication system. The verbatim principles and accompanying text as adopted by the signatories are reproduced here.


[1] John Maynard Keynes, A Tract on Monetary Reform, London, MacMillan and Co. Ltd. 1923, p. 80.

[2] Brendan J. Wiley, Competition in Scholarly Publication; What Profits Reveal" in Views of the Current Marketplace for Scholarly Journals at http://www.arl.org/newsltr/200/wyly.html, 1998.

[3] Create Change at http://www.createchange.org/change.html, 2000.

[4] For a longer view of price inflation see Carol Tenopir and Donald W. King, Towards Electronic Journals, Special Libraries Association, 2000, p. 277.

[5] Mark McCabe, The Impact of Publisher Mergers on Journal Prices: A Preliminary Report at http://www.arl.org/newsltr/200/mccabe.html, 1998.

[6]Create Change athttp://www.createchange.org/change.html, 2000.

[7] James Langer, "Physicists In the New Era of Electronic Publishing," Physics Today, August 2000, Part 1, p. 35.

[8] "Intellectual Property and New Media Technologies: A Framework for Policy; Development at AAU Institutions, http://www.tulane.edu/~aau/IPNewMediaReport.html

[9] For more information on the Open Archives Initiative see the following: http://www.openarchives.org

[10] For the original PubMed Central site proposal see http://www.nih.gov/about/director/pubmedcentral/ebiomedarch.htm and for the site description of PubMed as implemented see: http://www.nih.gov/about/director/pubmedcentral/pubmedcentral.htm

[11] For a full description of SPARC efforts see http://www.arl.org/sparc/

[12] For a full description of BioOne see http://www.bioone.org/

[13] Charles Phelps, "The Future of Scholarly Communication, A Proposal for Change", http://www.econ.rochester.edu/Faculty/PhelpsPapers/Phelps_paper.html

[14] Wilson, Robin. "Provosts Push a Radical Plan to Change the Way Faculty Research is Evaluated." Chronicle of Higher Education, 26 June 1999, A12. http://chronicle.com/che-data/articles.dir/art-44.dir/issue-42.dir/42a01201.html

[15] For a full description of NEAR see David E. Shulenburger, Moving with Dispatch to Resolve the Scholarly Communication Crisis: From Here to NEAR, ARL Newsletter, Issue 202, February 1999. http://www.arl.org/newsltr/202/intro.html

[16] For information and to sign the pledge go to http://www.publiclibraryofscience.org/.

[17] H.L. Mencken, "The Devine Afflatus," A Mencken Chrestomathy, (A.A. Knopf), Chapter 25, p. 443, 1949.