UC Libraries, Nature Publishing Group in Heated Dispute Over Pricing; Boycott Possible

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By Norman Oder Jun 10, 2010

In a pointed exchange, library directors and faculty leaders at the University of California (UC) and executives at the Nature Publishing Group (NPG) are trading charges about NPG's proposed increase in license fees, the tenor of negotiations, and whether UC has long been getting a sweet deal.

UC threatens a possible systemwide boycott of NPG if the current licensing deal is not maintained. In 2003, that tactic helped lead to a settlement of a new bundled deal with Elsevier. The price was not disclosed, but the deal was said to arrest inflation.

Today, there are more scholarly repositories and open access journals to serve as alternative outlets, but major publishers like NPG are still seen as crucially prestigious.

UC says it currently pays $4,465 per NPG journal, while the proposed cost for 2011 is $17,479. Nature responds that the proposed cost per download represents a very good value.

NPG suggests that UC's California Digital Library (CDL) benefits from an anomalous discount, and that no other consortium has "a legacy pricing issue which requires an adjustment of this size." All the documents so far are at UC's Reshaping Scholarly Communication site.

UC letter
The dispute emerged in a June 4 letter now posted on the University of California, Los Angeles biomedical library blog, signed by Laine Farley, Executive Director, California Digital Library (CDL); Richard A. Schneider, Chair, University Committee on Library and Scholarly Communication; and Brian E. C. Schottlaender, Convener, University Librarians Council.

UC Libraries, they write, "are confronting an impending crisis in providing access" to NPG journals, which would raise the site license by 400 percent beginning in 2011, costing the libraries more than $1 million more per year for NPG's 67 journals.

Meanwhile, CDL, facing a steady decrease in materials budgets, has managed to save $1 million a year on journals.

They wrote, "NPG by contrast has been singularly unresponsive to the plight of libraries and has employed a ‘divide and conquer' strategy that directs major price increases to various institutions in different years."

Boycott?
UC faculty and researchers "author a significant percentage of all articles published in NPG journals," the letter says. A CDL analysis suggests that "UC articles published in Nature alone have contributed at least $19 million" over six years to NPG.

Thus Keith Yamamoto, a professor and executive vice dean at the University of California San Francisco who helped lead the "successful boycott against Elsevier and Cell Press in 2003" is working to organize a systemwide UC boycott, in which faculty would ask the libraries to suspend their online subscriptions and would decline to participate in the editorial process for NPG journals.

Alternatively, the faculty members could comply with open access policies from Federal funding agencies, use CDL's eScholarship open access repository service, consider open access journals, and make sure they get publishing agreements that allow them to retain their copyright.

Nature response
In a press release, NPG called the letter "a shock... in terms of the sensationalist use of data out of context, misrepresentation of NPG pricing policies, and the fact that we were under the impression we were in an ongoing confidential discussion."

"The implication that NPG is increasing its list prices by massive amounts is entirely untrue," NPG stated. "Dollar list price increases have been reasonable (averaging roughly 7% over 4 years), and publicly available throughout. A 7% cap on annual list price increases is currently in place."

NPG suggested that CDL has "been on a very large, unsustainable discount" owing to the "lack of clear definitions around consortia and 'single institute, multisite' subscribers, as well as previous accommodations of CDL's budget limitations."

"If we regard CDL as a consortium of multiple libraries... the CDL discount on list price is 88%," NPG said. Now CDL receives average discounts of 55% from publishers. Nature would like that to be closer to 50%.

Cost issues
NPG chose to focus not on subscription price but cost per download, which, under the new prices, would be $0.56, "incredible value for money across any publisher's range of titles."

Thus NPG challenged CDL to reveal similar figures for other subscriptions and expressed confidence that scientists investigating the proposed boycott will "assess value with a rigorous and transparent methodology."

NPG also expressed puzzlement at the claim that UC authors contributed $19 million in revenue to NPG.

UC response
In a response to NPG, CDL said that NPG had been an unrelenting negotiator: "we were led to understand quite explicitly that no counter-offer was possible."

As for NPG's 7% annual increases, CDL noted that that figure was itself "budget busting," given that the materials budget of the UC Libraries increased by 7.46% between 2005 and 2009 and is now going down.

"Between 2005 and 2009, NPG increased their licensing fees to the University by 137% (granted this included some new titles, but truthfully not enough to warrant such a dramatic price increase)," CDL stated, suggesting that the proposed 400% increase to make up for "an unsustainable discount" is "an implausible explanation."

Determining value
As for NPG's statement that the proposed new license fee is a 50% discount, CDL suggests that list prices are often meaningless, because most institutions get discounts.

As for the cost, CDL reiterated that "the current average price of NPG journals at UC is appropriately aligned with other content licensed at the University."

The cost per use, CDL agreed is low, but "the characteristics of these journals must also be taken into account to ensure that like is being compared with like. As many observers and analysts have noted... the marginal cost to a publisher of increased online usage is very low in comparison to first-copy costs. There are many extrinsic factors that drive usage in today's digital environment, most of which bear little relation to a publisher's internal cost structure."

CDL said it looked forward to further discussions and said it would share its $19 million calculation, which, it noted, did not factor in the value of peer review and other services that would add to the tab.

Going forward
In closing, CDL stated, "[W]e want to emphasize that the UC letter represents the deliberations of many Faculty committees and librarians across the UC System who unanimously felt that UC needed to take a stand on this issue as a matter of principle and not merely as a budgetary consideration. Plainly put, UC Faculty do not think that their libraries should have to pay exorbitant and unreasonable fees to get access to their own work."

NPG, sent CDL's statement by LJ, said it does not wish to comment publicly at this point.

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