Developing an Effective Market for Open Access Article Processing Charges
Bo-Christer Björk & David Solomon
Released March 12, 2014
This interesting report, commissioned by (and clearly addressed to) a consortium of research funders comprising Jisc, Research Libraries UK, Research Councils UK, Wellcome Trust, Austrian Science Fund, Luxembourg National Research Fund and Max Planck Institute for Gravitational Physics, is a serious academic study (with a good executive summary, p.3) that builds on and updates earlier work by the same authors, provides new background data, analyzes risks, and proposes a number of alternative scenarios and solutions..
The primary objective is to “identify and appraise policy options for funders and other stakeholders, through which they can help ensure a competitive and transparent market for scholarly journal APCs” and to “provide useful input into the internal discussions of funding organisations regarding OA options and a broader dialogue with the different stakeholders in scholarly publishing”.
The report reflects concerns over rising costs, at institutional level, “during the transitional period” (to Gold Open Access) and whether the evolving market will be transparent and functional. It concerns itself entirely with the market for APCs (Article Publication Charges), the principal (but not the only) model for Gold OA, and with the “key current and future drivers that will determine costs”. It has relatively little to say about Green OA beyond an Appendix that quotes from new research (in press) about publishers’ embargo periods.
The authors conclude that the ‘Full OA’ market (journals operating only Gold OA) is functioning well, but that the Hybrid OA market (subscription journals offering a Gold OA option, such as Wiley’s OnlineOpen) is extremely dysfunctional, running on higher charges and generating very low uptake.
Much of the report is taken up with answering the key question “under what conditions should hybrid OA be funded?” and proposing ‘scenarios’ (interventions) that show most promise (from the point of view of funders and institutions) to deliver a transparent and competitive market in APCs. Throughout there is reference to current concerns over the potential for ‘double dipping’ under hybrid (citing familiar sources such as the BIS SelComm report and the Science Europe statement) despite the authors acknowledging that publishers have “consistently and emphatically denied the charge”. (p.25)
They hypothesize eight ‘scenarios’ for funding Hybrid OA, all of which are familiar (such as SCOAP3) and not mutually exclusive, and four of which are thought to apply equally to Full OA. From this analysis, they develop three scenarios as the “most promising for funding agencies”:
- Only support hybrid journals that offset APCs against subscription costs at institutional level.
- Adopt a value-based model with tiered caps by journal (i.e. setting maxima for APCs that funders are willing to cover)
- Pay only a set proportion of an APC above a threshold, say $1500.
The authors acknowledge strengths, weakness and challenges in each of these and recognize that they are operating in a complex area. There are however some oddities, for instance:
- The authors did not interview any ‘subscription’ publishers, but instead used a literature review, selective interviews with 13 ‘experts’, data retrieved from publishers’ websites, and academic scenarios.
- The language used in the commentary on their modelling is unclear, for example they use terms such as “refunds” without being clear what they mean by this (publisher offsets? funder grants? institutional funds?) and phrases such as: “we suggest scenario H4, in which APCs are refunded at list prices provided that mechanisms are put in place to ensure that “double dipping” at the local level doesn’t occur”.
- There is much discussion of how to fix the dysfunctional hybrid market and how to fix the potential for double dipping, but little acknowledgement that APCs used to fund ‘full OA’ journals are equally a strain on the finances of research intensive institutions that must still fund subscriptions.
- The authors claim that take-up of Gold OA via hybrid has been minimal, however, this has not been the experience of many publishers including Wiley, whose OnlineOpen option increased by around 150% between 2012 and 2013.
A key consideration of the report (derived from their review of the literature) is that journals in the subscriptions market are essentially ‘complementary’ and attract the potential for ‘monopoly rents’, whereas in the OA market, especially the ‘full OA’ market, more choice is available to authors, leading to more competition between journals. “The full OA market has had over 10 years to develop and is a relatively normal economic market where publishers have to compete for “customers” via a combination of quality, innovative services and price.”
The authors also maintain that “both the literature review and the empirical data collected … have highlighted that the APC funded full OA and the hybrid OA market differ”, so separate scenarios are needed. In the Full OA market, authors are influenced by price whereas in the Hybrid OA market authors select first by journal. The potential for bundling APCs with subscriptions may also impact the market.
The authors have constructed “five new datasets” to inform their study, for instance enabling them to quote data on average APC prices for different journal types to support their conclusions:
- Full OA journal, published by ‘non-subscription’ publishers: $1,418
- Full OA journal, published by ‘subscription’ publishers: $2,097
- Hybrid journal, published by ‘subscription’ publishers: $2,727
They demonstrate a clear “price elasticity of demand” for APCs, and offer data for a correlation (p.36) between APC charges and their best metric for ‘value’, Source Normalized Impact per Paper (SNIP). They quote uptake of the hybrid option at 2% or less for hybrid APCs over $3000, with a few exceptions such as Nature Communications, and Springer APC-subscription bundled deals. They suggest that prices are more diversified and set more competitively by subscription publishers in the full OA market than in the hybrid market.
The authors offer valuable new data on the number of fully OA journals (p.19) and hybrid journals (p.23) now on offer by the major publishers, concluding that “the hybrid option is, almost as a rule, available for most subscription journals” but overall uptake is still very low, citing data in a recent Elsevier report for BIS showing on uptake of 0.5% of all Scopus articles as hybrid OA.
Björk & Solomon are at pains to point out that they see their scenarios as the start of a debate, and are clear that all scenarios have their advantages and drawbacks. They do not recommend a single solution but suggest that alternative models should be adapted to needs.
This paper is well worth reading, even if only its executive summary, for the new data it offers and for the discussion of the advantages and disadvantages of the various options for market interventions, most of which are already familiar to us in the publishing world. The hybrid market is immature but evidence of failure is premature. Reading this report will give us all a feel for the issues on which we will be challenged.