Looking past the pandemic to the new periodicals landscape

"The year… will be remembered as one of angst, with the economy dominating news around the world. Few libraries were immune [from] the extraordinary financial pressures. The library marketplace by year’s end was in a weakened position, with prospects of a long recovery at best. Concern  persists that even deeper budget cuts will come when federal stimulus money expires.... Even when the economy improves, increased funds for libraries are not likely to be at the top of the list for new spending priorities. Libraries may not [ever] see a ‘return to normal’ [and] instead...search for a ‘new normal.’ ”

So opened LJ’s Periodicals Price Survey for 2010. Jump ahead to 2021 and a paragraph written 11 years ago rings even truer. But having spent over a decade adjusting to a “new normal” of serials inflation, harsh budget cuts, and a redirection of spending from collections to services, arguably few if any libraries were prepared for the turmoil wrought by a pandemic. Overnight, public and academic libraries across the United States scrambled to deliver collections and services entirely virtually, with little to no physical presence. Some moved to “click & collect” models to provide access to physical collections and/or took advantage of the HathiTrust Emergency Temporary Access Service. Regardless of the means, we have shifted to a new abnormal. How will libraries survive and thrive after the pandemic subsides? What might our new abnormal look like?

TABLE 1: AVERAGE 2021 PRICE FOR SCIENTIFIC DISCIPLINES

THE ECONOMY: CAUTIOUS OPTIMISM ...?

Buoyed by trillions of dollars in federal government stimulus funding, the United States economy remained afloat through 2020, though the same wasn’t true for many individuals, especially after the temporary increase in unemployment benefits expired. The unemployment rate hovers around 7 percent, and disproportionately impacts people of color and white women. According to the Bureau of Economic Analysis, the real gross domestic product (GDP) increased at an annual rate of 4 percent in the fourth quarter of 2020 as efforts continued to reopen businesses and resume activities postponed or restricted due to COVID-19. But overall GDP fell 3.5 percent for all of 2020. Inflation remains generally low, with sources indicating that the Consumer Price Index will average at around 2.2 percent in 2021. Over the last 12 months, the all items index increased 1.4 percent before seasonal adjustment.

… OR PESSIMISTIC REALISM?

Nevertheless, there is unlikely to be a quick return to the pre-pandemic economy, with the financial picture even murkier at the state level. The National Association of State Budget Officers reported that state general fund spending in FY21 is projected to decline for the first time since the Great Recession, based on enacted budgets. After nine consecutive years of budget growth, states saw revenue fall in FY2020, and greater declines are expected in FY21. State Higher Education Executive Officers reported that net tuition per FTE declined in 2019 for the first time since 2008, while state financial aid increased to an all-time high.

Higher education funding, generally considered more discretionary than K–12, will be disproportionately affected by any recession. The National Center for Education Statistics Integrated Postsecondary Education Data System predicts that enrollment will essentially be flat through at least 2029. The Centers for Disease Control and Prevention reports that U.S. births have fallen 1 percent since 2018, and some experts believe the pandemic and its impact on the economy will suppress the numbers further.

TABLE 2: TITLES INDEXED IN SCOPUS COST HISTORY BY LIBRARY OF CONGRESS SUBJECT

BUDGET OUTLOOK: HISTORIC DISRUPTION

A large number of public and academic libraries are also looking at moderate to severe budget contractions due to unplanned COVID-related expenses, declines in tuition dollars, and/or local and state funding cuts. Many institutions are seeing or planning for permanent cuts between 9 and 13 percent to their base budget, a key difference from temporary cuts made after the Great Recession. Public libraries may fare better than academics: in an LJ survey of 223 public libraries across the United States, 84 percent reported an increase in FY21 total operating budgets for a rise of 2.9 percent. (See “The Price of a Pandemic.”) This was more modest than last year’s 3.5 percent increase, but represents continued, if uneven, gains.

U.S. academic libraries are largely waiting to see what state funding and enrollment reveal. The National Student Clearinghouse Research Center’s Current Term Enrollment Estimates indicate that first-time student enrollment in fall 2020 plunged 13.1 percent compared to fall 2019, with community colleges seeing the greatest declines. Public colleges overall lost 4 percent of their enrollment, a concerning fact, given that public institutions enroll seven out of 10 students. Some of this falloff was caused by a drop in international student enrollment. Those numbers declined for the fourth year in a row. Another factor was the substantial number of Americans who would normally have attended college but opted to stay away this past fall. The Ithaka S+R US Library Survey 2020 reported that most academic libraries, particularly doctoral universities and public colleges, experienced budget cuts and are very uncertain about the likelihood of any longer-term financial recovery. Academic libraries, strapped for cash and bracing for reduced government support, will continue to push academic publishers to change their business models.

TABLE 3: COST HISTORY FOR ONLINE TITLES IN CLARIVATE ANALYTICS INDEXES

READ & PUBLISH—THE NEW BIG DEAL?

For the publishing giants, business largely continues as usual—at least for 2021—with Read & Publish agreements gradually supplanting traditional Big Deal and subscription agreements. Increasingly, institutions are signaling that they will accept moderate price increases as long as the content becomes open access, and large publishers are learning that charging universities when they publish rather than read journals can still be profitable. RELX’s Elsevier unit saw strong growth in some Asian countries, while its overall subscription completion rate remained in line with recent years. Despite failing to reach a renewal of its Big Deal agreement with the University of California, MIT, and Purdue last year, the publisher has seen its Open Access (OA) revenue continue to accelerate, with revenue growing faster than the subscription segment.

Although privately held Springer shelved its third attempt to go public last year due to the pandemic and saw a subsequent expected decline in revenue, it remains the world’s largest OA publisher. The company signed two landmark transformative agreements: one with the University of California, the largest such agreement to date in North America, and one with Germany’s Max Planck Digital Library, the first such agreement for its Nature-branded titles. Market research firm Simba Information estimates that Springer Nature’s OA revenue reached $160 million in 2019, a 5.3 percent increase from an estimated $153 million in 2018.

PERIODICAL PRICES FOR HIGH SCHOOL AND PUBLIC LIBRARIES 

TABLE 4: COST HISTORY FOR TITLES INDEXED IN MASTERFILE COMPLETE
Future price increases for titles in EBSCO Publishing's Masterfile Complete are expected to be in the 3.0%–4.0% range for 2022.

Informa (Taylor & Francis) reported continued strong demand for its OA products and robust full-year revenue, while SAGE signed national Read & Publish agreements with academic libraries in Germany, Sweden,
and Switzerland, and launched a new portal to support OA workflow. Wiley purchased Hindawi with the intent to strengthen its growing position in the global research industry, particularly in China, one of the world’s fastest-growing research markets. The acquisition of Hindawi doubles Wiley’s OA journal portfolio.

While large publishers have made it to 2021 unscathed, smaller publishers and academic societies will be hit harder, particularly in the United States, where the lack of a national funding strategy will make it difficult to balance costs between institutions that publish and those that read. Though many publishers agreed to freeze or reduce price increases for 2021, decreased library collections budgets means that libraries will undoubtedly be forced to cancel titles with lower usage or a lower impact factor—bad news for smaller houses that may rely on a steady income stream to support their transition to online and/or OA. For 2022, libraries will undoubtedly drop print subscriptions faster than ever before, placing small and niche publishers and societies under increasing pressure to shift all content online. Whether the Subscribe to Open (S20) model of OA will work for these smaller players remains to be seen. The recently formed Subscribe to Open Community of Practice may provide the necessary support for them to offer open content in some form.

Regardless of what model is used, OA offerings will continue to grow. Simba Information estimates that, by 2024, OA journal revenue will represent 9 percent of the market, for an OA market size of $1.1 billion. Such growth is not surprising, given the jump in article submissions over the past year. At Elsevier, for example, the number of article submissions grew over 25 percent in the past year to almost 2.5 million, nearly double the total number of submissions received just five years ago, while the number of articles published was 40 percent higher.

For large publishers, any declines in profits from publishing are being offset by investments in products that support other parts of the research life cycle. No longer just publishers, these “research support and lifelong learning technology” companies continue to diversify by investing in sophisticated information-based analytics, research, and learning support tools. In 2020, Elsevier acquired Shadow Health and SciBite, Springer acquired Dentallect, Wolters Kluwer launched Lippincott Connect, and Informa folded F1000 Research into its Taylor & Francis unit. Not to be outdone, Wiley purchased mthree, Knewton Alta, and zyBooks. Independent initiatives such as Chronos and the OA Switchboard promise to assist authors, publishers, libraries, and institutions in managing OA payments, but it’s conceivable that large publishers will move into this area eventually.

TABLE 7: TITLES IN CLARIVATE ANALYTICS INDEXES COST HISTORY BY LIBRARY OF CONGRESS SUBJECT

THE 2022 FORECAST

Transformative agreements will make more content openly available, but they won’t pump any more money into library budgets or promise to make scholarly communications more sustainable. In the absence of national or statewide plans for funding OA (California being the notable exception), it’s difficult to see most “publish” universities in the United States agreeing to shoulder the costs of transformative agreements to make content open for all to read, particularly when faced with permanent budget cuts. Many libraries, unable to initiate a large serials review project in time for the 2021 subscription renewal deadline, will be taking a very careful look at their title lists and packages for 2022. New products like Unsub predict the value and costs of individual journals to specific institutions, allowing libraries to determine whether a Big Deal is still appropriate for their institution or if it’s time to unbundle. These value-added service offerings will become increasingly important as libraries look to align their expenditures with a new reality.

The past year affirmed a lot about libraries’ ability to adjust to a strange new world. Libraries quickly found creative and innovative ways to provide alternate access to physical collections and services. The complimentary access many publishers provided to subscription collections during the first few months of the pandemic only further whetted users’ appetites for full OA. With users now habituated to online delivery and open collections, “collection” strategies will become “connection” strategies, and libraries will increasingly facilitate access to content outside their local licensed collection. (For example, the Midwest-based Big Ten Academic Alliance recently announced that it would treat the separate collections of the 14 university libraries as a single collection.) A growing interest on campus in access to datasets and systems that support the entire research lifecycle provides an opportunity for libraries to show their expertise in knowledge management.

For the first time in a decade, libraries can anticipate subscription price increases of less than 6 percent: 3-4 percent is predicted for 2022. If a local serial portfolio skews toward large publishers, then the increase will be toward the 4 percent level. But with most institutions preparing for further collection cuts, even such a modest increase is not sustainable. Supported by faculty and emboldened by seeing the goals of Plan S and OA2020 start to come to fruition, libraries will be likely more prepared than ever to walk away from the table. Publishers will need to sharpen their pencils.

TABLE 8: 2022 COST PROJECTIONS BY BROAD SUBJECT