RE: universities experiment with paying OA fees

["David Prosser" <david.prosser@bodley.ox.ac.uk>]

Jim:  Your WalMart comparison is interesting, but I draw a 
different conclusion from it than you do.

The first thing to note is that for the publishing process the 
most important input is the intellectual.  Editors and reviewers 
have no greater incentive to work with a big publisher than they 
do with a small society publisher.  The ability to extract 
intellectual effort from the community is not one that the big 
publishers through their market position can leverage.

Where they can dominate is in sales and marketing.  Big 
publishers can go to individual libraries and consortia and offer 
large bundles, in multi-year packages that tie-in large 
percentages of the libraries' budgets.  They can employ large 
sales-forces to ensure that their products continue to be 
purchased by the consortia.  Small publishers find it harder to 
compete as they do not have the sales-forces and they do not have 
the bundles.  So, it is the current big-deal subscription model 
that encourages WalMart-type behaviour and is leading to the 
consolidation of the market.  We can see this in the trend for 
small and society publishers to move away from independence - a 
move that has nothing to do with open access.

Open access with input fees allows publishers to compete on the 
level of author services - something that small and society 
publisher have traditionally been very good at.  Rather than 
being the death-knell for society publishers it could be their 
best chance of survival - especially compared to the current 
big-deal environment.

Now if we just replace the current model where users (authors and 
readers) are insulated from the subscription costs of journals to 
a new model where users are insulated from publication charges 
then the possibilities of generating a functional market will be 
diminished and small publishers will be disadvantaged as they 
will find it harder to compete against big publisher publication 
charge big-deals (of the 'For a yearly payment of x hundred 
thousand dollars the fees for publishing in any of publisher y's 
1000 journals are covered for all researchers at institution z' 
type).  That is why it is important that the prices become 
transparent to the users and they become more closely integrated 
with the decision making.

(I should add as an aside that I do think there are places where 
small and society publishers could usefully come together more in 
cooperatives to share development of submission systems, 
publishing platforms and such like. That would provide them with 
some economies of scale while allowing them to concentrate on 
what they are best at - selection and certification.  There have 
been some efforts in this direction - e.g. BioOne - but I would 
like to see more.)

David Prosser
SPARC Europe


-----Original Message-----
[mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of James J. O'Donnell
Sent: 09 June 2008 22:27
To: liblicense-l@lists.yale.edu
Subject: Re: universities experiment with paying OA fees

I have extracted a few points below from Mr. Hindawi's message, 
to seek clarification and make a comment.

1.  Clarification:  I am baffled by the repeated assertions here 
extracted and underlying the whole posting that publishers today 
live in an inefficient market in which "no one cares or does 
anything" about costs, and that a Gold OA market will become 
magically efficient.

Given that in this new market, at the urging of the Gold OA 
enthusiasts, authors will be *required* to purchase the services 
of publishers (by government or publishers' mandates), the 
natural expectation would be that publishers would be in the 
catbird seat and able to charge as much as the market would bear. 
If *that* force is not overwhelming, at any rate I do not see 
what force will transform the marketplace for the better.  Nor do 
I see, as a matter of cold fact, any evidence today of publishers 
who don't care about costs!

2.  Comment:  re the wonder of capitalism hymned by Mr. Hindawi 
in the eradication of less effective competitors.  That is an 
ideological assertion, where a moment's thought would suggest 
many cases where the iron law of the market destroys things that 
are of great value.  The not-for-profit sector (that's 
universities, research institutes, and many publishers) enjoys 
government protection in part precisely because the entities 
there are judged unlikely to flourish if subjected to the full 
power wonderful capitalist market.

One thing we *do* see in relatively free markets is that the most 
cost-effective enterprises are the huge multinationals that face 
the least restriction (let's say WalMart:  think of your own 
publishing equivalent) and the least cost-effective are the 
charming neighborhood shoppes with distinctive products and 
services.  I wonder if Mr. Hindawi looks forward to the 
eradication of many small publishers and the triumph of large 
international enterprises?

Jim O'Donnell
Georgetown U.

On Thu, Jun 5, 2008 at 7:55 PM,
Ahmed Hindawi <ahmed.hindawi@hindawi.com> wrote:

> They both produce leading publications in their
> fields. How can they both survive? They can and do in today's
> inefficient market where no one cares or does anything about the
> cost.

<snip>

> In an efficient market, the more cost effective publishers will get
> more market share (which will lower the total cost) and will put
> huge pressure on less cost effective publishers to lower their
> cost (which will lower the total cost).
>

<snip>

> In a Gold OA world where price actually matters, more efficient
> publishers will have their day. They will wipe their less
> efficient competitors out of the market. And it is a wonderful
> thing for all of us, isn't it? It is what efficient markets bring
> to the society. It is capitalism at its best.