Re: FTE-based pricing and usage-based pricing

[David Goodman <dgoodman@Princeton.EDU>]

Surely by now it should be obvious that there is no good pricing 
model. I have yet to see one that was not unfair to some group of 
libraries. There is a possibility that a system could be devised 
that offers a choice of models to the library--and in fact one 
has the option from some providers, such a OCLC, to purchase some 
databases either at a flat rate or by the search;  even then, the 
relative pricing of the two access routes will be contentious.

Fortunately, this is problem only for databases and other 
secondary services. As all readers of this list must know, there 
is a universally fair pricing model for journals, that of open 
access journals. More precisely, it is fair to universities, 
although not necessarily to their libraries, for it apportions 
charges according to the amount of research funds available. Just 
as the cost for research staff depends directly on the research 
funding, just as the cost of research supplies depends on the 
research funding, so will the cost of publishing the results.

Just as no university wishes to overpay for research supplies, 
they will not want to overpay for research publication costs. The 
expense of research supplies is determined by a free market, and 
so will be the expense for research publishing.

Sally's examples are just plain wrong. I have never known an 
institution that does not bargain aggressively for telephone 
service.The cost of such service has gone down dramatically, as 
new and more efficient technology has entered the market-- to a 
considerable extent, from other than the traditional providers. I 
have never known an organization of any sort that does not 
strenuously promote the efficient use of heating and lighting; 
most universities find it worthwhile to pay technical staff to 
optimize their facilities. Not just large institutions but 
individual households try to deal with the cost of utilities 
efficiently, so the concept should not be unfamiliar.

I've said this before. Sally has not yet learned it, just as the 
publishers in general have not yet learned it. At least they are 
beginning to experiment. It is a good thing they do: if they do 
not provide a cost-efficient service, they, just as other 
outmoded communications services, will be replaced by more 
efficient alternatives.

It is in this light that we look on Sally's quoted costs for peer 
review.  If her figures are right, it is the most expensive part 
of journal publishing, because the per-article OA charges of even 
expensive commercial publishers is less than double her figures. 
It can be done for less: the per -article cost of publishing 
Physical Review is less than $1500 -- the exact amount depends 
upon whom you ask--and the price of Physical Review to libraries 
declines a little most years (the absolute price, not even 
adjusted for inflation). The quality of their peer review does 
not seem to suffer.

David Goodman, Ph.D., M.L.S.
previously:
Bibliographer and Research Librarian
Princeton University Library

dgoodman@princeton.edu


----- Original Message -----
From: "Sally Morris (Chief Executive)" <sally.morris@alpsp.org>
Date: Friday, October 20, 2006 6:29 pm
Subject: Re: FTE-based pricing and usage-based pricing
To: Liblicense <liblicense-l@lists.yale.edu>

> Usage-based pricing only discourages use at a certain level.
>
> Do we refrain from using telephones?  Electricity?  Water?  Yet
> many of us pay for these, at least in part, on a usage basis.
> It's all a matter of pricing level, isn't it?
>
> The trick would be to work out a pricing model which, in total,
> produced the same amount of money (give or take) to producers,
> but distributed its payment more fairly among users.  Of course,
> heavy users who paid more would hate it - low users who paid less
> would love it.  And that may, in fact, be the main obstacle!
>
> Sally Morris, Chief Executive
> Association of Learned and Professional Society Publishers
> Email: sally.morris@alpsp.org
> Website:  www.alpsp.org