41st Annual Report Periodical Price Survey: Searching for Serials Utopia

The past year in the serials marketplace lacked some of the volatility of the previous four years. Metapublishers, reference linking services, and controversial e-print database providers, no longer considered newcomers, settled more firmly into the scientific, technical, and medical (STM) market. The struggle between library consortia and publishers over the price of online content de-escalated a bit, as publishers resigned themselves to the inevitable and moved closer to standardizing their marketing strategies.

There was a pause in both publisher and vendor mergers, interrupted by Taylor & Francis's acquisition of Gordon & Breach in mid-February. Reed Elsevier's stalled bid for Harcourt kept another dramatic possibility alive but unrealized.

There may have been less drama, but there was plenty of anxiety-producing change. A small but noteworthy handful of prestigious academic libraries issued strategic plans that call for eliminating all paper subscriptions where online is available, to the dismay of those STM publishers that have not yet separated their distribution and pricing systems. For the first time, ever so quietly, a bevy of high-end social science and STM publishers began to move most of their journals into some of the aggregated databases. Simultaneously, publishers yanked content from other aggregated databases when the aggregators encouraged librarians to cancel print subscriptions to pay for their online counterparts.

Linking and archiving issues dominated the attention of librarians, publishers, and vendors this past year. Primary publishers from the STM and social science ranks joined the CrossRefarticle-linking project, which launched in June 2000 with 33 partners. The two largest providers of e-journal conversion and hosting services, ingenta and CatchWord, merged in February 2001 in a deal that will link articles in 4500 online journals behind a common gateway.

But librarians looking for more comprehensive (and less publisher-dependent) linkage began experimenting with powerful software to do it on their own. In a move that could portend a breakthrough in the archiving question, the Library of Congress (LC) signed two innovative deals last year (see p. 54–55).

This year's periodicals price survey will look at these and other changes in the serials marketplace in order to analyze trends that will affect price and availability of serials and services in the coming year. For this survey, three Institute for Scientific Information (ISI) databases—Arts and Humanities Citation Index, Social Sciences Citation Index, and Science Citation Index—provide the 6,185 titles used in the core study. These databases typically reflect the subscription lists of large research libraries. For smaller academic libraries, we have included an analysis of 1,002 journals in EBSCO Publishing's Academic Search Elite. Public and school libraries will find useful price data in the brief analysis of EBSCO's Magazine Article Summaries Ultra.

Cost history for the study was pulled from EBSCO's database of 308,000 serials title listings. For practical reasons, the data are limited to prepriced titles (as opposed to standing-order or bill-later titles) that can be ordered through a vendor. The data are current as of February 20, 2001.

The Big Five of academic publishers—Academic, Elsevier, Kluwer, Springer, and Wiley—now have all of their major STM journals online. Scholarly publishers in the second tier are approaching that mark: they include publishers like the American Chemical Society, IEEE, and the American Institute of Physics; large university presses like Oxford and Cambridge; and mid-sized STMs like Gordon & Breach (G&B), MCB, and Sage. Much of the volatility we have observed in the last four years—in mergers and in convoluted pricing schemes—has resulted from these publishers' heavy investment in the technologies to get online.

Behind them, the rest of the publishing world has watched carefully to see if the investments will return profit. As online use has soared, naysayers have become scarce. In their place are smaller publishers looking for ways to get their journals on the web without jeopardizing already thin profit margins. The race to the web, in fact, has dramatically strengthened the role of third-party electronic service providers like HighWire, ingenta/CatchWord, and MetaPress. These metapublishers allow primary publishers to outsource some or all of the text conversion, reference linking, hosting, and gateway services that traditional publishers cannot afford to provide in house.

As academic libraries have become more comfortable with the usability, reliability, and linkability of online journals, some have begun to implement online-only subscriptions for STM titles. In effect, they are demanding that publishers cease delivery of print copies where online is available. This poses no problem for publishers that have unbundled pricing of print and online.

As a rule, however, publishers that sell their titles as a combination-only ("online free with print") will mail the print whether you want it or not. The reasons are varied and range from the philosophical to the pragmatic. In most publishers' minds, print remains the short-term answer to the archive problem. But for some publishers, it's a matter of mechanics. The input of an order automatically generates a label, just like in the old days, with no practical way to stop shipment to a particular customer. For others, delivery of print and online remain tightly bundled in a deliberate strategy to help European customers avoid the special tax applied to products delivered over the Internet (if online is "free," there is no tax). It will be interesting to see how publishers respond as more North American libraries insist that print shipments stop.

Despite the willingness of individual libraries to give up their print back-ups, anxiety about archiving online content is widely shared. A number of prototype archiving projects have been started, but none offers a truly comprehensive solution. Perhaps the most promising news on the archiving front comes from LC. It has launched two arrangements that could become models for a broad range of archiving solutions. Fundamental to both is the idea that LC will exchange its services for access to publisher content, so that both parties benefit but no money changes hands.

In its agreement with UMI/Bell & Howell (B&H), for example, LC gets perpetual access to Dissertation Abstracts for its researchers' and readers' use and acquires ownership of the files should the publisher go away. In exchange, B&H is relieved of its legal responsibility to deposit a microfiche copy of the database with the Copyright Office. LC's agreement with the American Physical Society (APS) uses a different model. In exchange for current and ongoing access to APS's online journals, LC has agreed to mount the journal files on its server and to maintain them as a safe storage site for the publisher's security.

Nancy Davenport, LC's director of acquisitions, is exploring the possibility of similar arrangements with other publishers: "All of these conversations are in the spirit of finding the appropriate role for the national library and testing alternative business models." A comprehensive solution to the problem of archiving might just lie with LC. It is compelling to imagine LC taking on the role of honest broker for any number of publisher files, allowing access to many publics through authentication agreements.

The big news on the linking front this year is a product that claims to have the capability to create a universe of linked information exactly tailored to a library's resources. Called SFX, this product has been in beta-test at a handful of American libraries this past year. Ex Libris has acquired the sole rights to SFX from the University of Ghent (Belgium).

Library customers can set up an SFX server to link their patrons to e-resources the library owns or licenses, via the OpenURL standard. When a patron finds a citation in a database or e-journal, that source can provide a link back to the patron's SFX server. When the user clicks on the link, the SFX server takes corresponding metadata from the source, creates additional links for the user, and ultimately routes the user to an appropriate copy of the document or to alternative sites (like a holdings record in the OPAC).

The year 2000 saw a burst of creative pricing schemes introduced into the serials market. Nonetheless, some aspects of publisher pricing strategies for online and print have become familiar. Print thrived below the STM level, albeit with the price increases library subscribers have always experienced. About an equal number of publishers switched sides on the issue of whether to charge extra for online with print. STM publishers traded expanded content for guaranteed subscription renewals and multiyear purchase agreements. In opposition to that trend, some larger publishers of social sciences and humanities journals grew more cautious about negotiating deals. Their subscriptions have remained solid or grown in recent years, reducing the incentive to cut deals. Show them the money

The rapid expansion of linking initiatives is driving online publishers to think differently about marketing their content. The pay-per-view (PPV) market has been revitalized, for example, following several years in which document delivery services came and went frequently. About half of the larger STM publishers now sell articles directly to users through their proprietary gateway services. The concept of PPV subscription rates may not be far behind.

In addition, more and more publishers are turning to database aggregators for added revenue. Until recently, many have resisted merging their titles with ones from other publishers in aggregated full-text databases like those produced by B&H (ProQuest), EBSCO, and Gale. Now they are lured by the exploding demand in international markets for full-text periodical databases. Their fear of losing brand identity has been somewhat replaced by the opportunity for maximum exposure.

Even the lofty publishers of STM journals are beginning to license their content to selected aggregators. For the first time this year, publishers like the American Institute of Physics, Blackwell Publishers, Blackwell Science, G&B, Oxford University Press, Springer Verlag, and Taylor & Francis will license most or all of their online content to an aggregated database provider.

Simultaneous with the push by high-end publishers to get their content into an aggregated database for the first time, some publishers of core academic journals are snatching content from selected aggregations because they think some aggregators are undermining their subscription base. A number of publications, among them the Harvard Business Review, have responded by entering into exclusive deals with aggregators such as EBSCO, despite library concerns that such a practice could fracture the database marketplace with different aggregators offering different sets of key content. Embargo deals that delay the appearance of high-demand titles for three to 12 months have the potential to offset concerns about lost sales and may be a way to restore the delicate balance between the needs of aggregators and publishers. Publisher embargoes have also met with resistance from the library community. In 2001, a large number of research libraries have declined to sign site license agreements for the eminent journal Nature because of an embargo period on content that is not imposed on personal subscribers.

Yet another storm is brewing on the publisher front, as some of the largest STM publishers continue to experiment with ways to eliminate subscription agents from the ordering process. Partly to build back revenue to defray the cost of technology investments, these publishers want to stop giving discounts to subscription agents or, in some cases, have already done so. They want libraries to come directly to them, and they are making it difficult for libraries to refuse. At the same time, they explicitly intend to offer one-line invoices (that don't list the titles included) and no customer service. They have met with resistance from librarians who want comprehensive fiscal and reporting services, such as invoice download, from a single vendor.

There is some irony in the idea of publishers marketing directly to customers even as they are becoming increasingly dependent on agents for authenticating the order history of online subscribers. Short of re-creating the complex and massive databases used by vendors to track subscribers, publishers are going to need the agents' databases to manage their own authentication issues.

In fact, STM publishers that experimented with excluding agents in recent years found that approach untenable. Many professionals on both sides—publishers and librarians—are concluding that the vendor's role did not diminish, as expected, when the method of journal delivery changed. This will be an issue to watch in the coming year, because it can influence both subscription prices and vendor service charges.

Between November 1999 and November 2000, when subscriptions for 2001 were ordered, the dollar strengthened 11% against the pound and 8% against the Euro, due to the strong U.S. economy. During that year, U.S. journal prices rose, on average, a fairly predictable 9.5%. On the other hand, the strong dollar should have held European journals at or below the previous year's prices, even after allowing for a 10% rise for inflation. For publishers that set prices in home currency, that was the case. Table 4 shows that average price increases for French, German, and Italian publishers hovered just above or just under zero percent.

In sharp contrast, the average cost increases for journals from England and the Netherlands, where the large STM publishers set prices in U.S. dollars, went up 7.5% and 8%, respectively. In effect, those publishers chose not to pass along the currency advantage to their American customers. Chart 1 graphically illustrates this.

As long as the U.S. economy holds steady and unemployment remains low, it is reasonable to assume that the dollar will keep its strength against the Euro and the pound. This could also mean that U.S. journal prices will see double-digit inflation in some disciplines. We conservatively estimate average increases of 8.5% for U.S. journals in the arts and humanities, 10.5% in the social sciences, and 10% in the sciences.

Apparently the dominant European publishers can be counted on for increases somewhere between 5% and 10%, regardless of the strength of the dollar. Based on past performance and on the expectation of a continuing strong dollar, we suggest budgeting for average increases of 7% for European journals in the sciences, 8% in the social sciences, and 6% in the arts and humanities.

AVERAGE COST OF AN ISI TITLE: $681.23

* Included in European Monetary Union

PROJECTED OVERALL INCREASE FOR ALL ISI TITLES: 8.1%