Electronic Publishing and the Economics of Information Part II Implications for Libraries Carol Tenopir University of Tennessee, Knoxville [email protected].

Electronic Publishing and the Economics of Information

Part IIImplications for Libraries

Carol Tenopir University of Tennessee, Knoxville

[email protected]

http://web.utk.edu/~tenopir/tenopir.html

Donald W. KingUniversity of Pittsburgh

[email protected]

What factors affect demand?

• Price

• Journal attributes

• Availability & relative cost of alternatives

• Combinations of distribution means and media are finding a niche

Average Annual Price Increase (%) in Scientific Journals

0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%9.00%

10.00%

1960-1975 1967-1986 1972-1988 1975-1995 1991-1995 1995-1998

Time Periods Examined

Average Cost Per Title:Science Journals 1996-2000

0

200

400

600

800

1000

1200

1996 1997 1998 1999 2000

U.S.Non-U.S.

Why have journal prices spiraled upward?

• Size and Inflation – 56%

• Drop in personal subscriptions

• Addition of new, low-circulation journals – 17%

• McCabe thesis

• High profit / net revenue

To understand price one must understand publishing costs

• Five publishing functions:– Article processing (=$190,000)– Non-article processing (=$19,500)– Reproduction (=$101,000)– Distribution (=$80,500)– Support (=$168,500)– Total (=$559,500)

Average Cost per Subscription

$0$100$200$300$400$500$600$700$800$900

500 1,000 2,500 5,000 10,000

Number of Subscriptions

Average Number of Personal Subscriptions to Scholarly Journals

0

1

2

3

4

5

6

7

1977 1978-1983

1984 1985-1989

1990-1993

1994-1998

2000-2001

Years of Observation

Comparative Costs

0

100

200

300

400

500

600

0 10 20 30 40 50

Tot

al C

ost

($)

Individual Subscription

Library Use

Break-Even Point (36.5)

Number of Readings of the Journal

Cost of Subscribingvs. Library Use

117.6$1,000

59.4$500

30.3$250

18.7$150

12.9$100

Break-Even Point

(Readings)

Individual Price

($)

Individual Subscription Prices

<0.1$1,000

0.7$500

3.2$250

8.7$150

15.0$100

Proportion of Journals to which

Scientists can Economically Subscribe

Individual

Price

Subscribing vs. Separate Copies

56.5$1,000

30.4$500

17.3$250

12.1$150

9.5$100

Break-Even Point in Number of Readings

Institutional Price

Library Owning vs.Borrowing Article Copies

0

100

200

300

400

500

600

700

800

900

0 5 10 15 20 25 30

Number of Readings of the Journal

Tot

al C

ost

($) Break-Even Point

ILL/Document Delivery

InstitutionalSubscriptions

Library Subscription Prices

49.0$1,000

65.5$500

78.2$250

84.6$150

88.9$100

Proportion of Journals to which Libraries can Economically Subscribe

Institutional Price

Purchasing vs. Document Delivery

Document Delivery Fees

Journal Prices

$0 $5 $10 $20 $30

$100 17.4 11.8 8.9 6.0 4.5

$250 31.9 21.5 16.2 10.9 8.2

$500 55.9 37.8 28.5 19.1 14.4

$1,000 104.0 70.2 53.0 35.6 26.8

Electronic Journals vs. Separate Copies

Article Access Fees

Subscription Price ($)

$0 $5 $10 $20 $30

$100 19.6 10.4 7.1 4.3 3.1

$250 46.0 24.4 16.7 10.2 7.3

$500 90.1 47.8 32.6 19.9 14.3

$1,000 178.3 94.8 64.5 39.4 28.3

Effects of PriceChanges on Subscribers (1998)

Price Changes

Individual Subscriptions

Institutional Subscriptions

From To From To Loss From To Loss

$100 $150 2,500 1,450 1,050 2,500 2,379 121

$150 $250 2,500 920 1,580 2,500 2,311 189

$250 $500 2,500 547 1,953 2,500 2,094 406

$500 $1,000 2,500 111 2,389 2,500 1,870 630

Usefulness & Value of Scholarly Articles

• Information serves many purposes

• Highly important to these purposes

• Readers are willing to pay a high price for the information in their time

• Information results in improved performance

Usefulness, Value, and Impact of Information

• 198 readings per professional• Evidence of the consequences of reading

– Considerable savings result

– Improved productivity, quality, and timeliness of work

– Achievers read more than others

– What users are willing to pay for information

– Purposes of reading

– Importance compared with other resources

The Contribution that Libraries Make to this Use, Usefulness,

and Value

General Approach

• Examine overall communication forms and patterns

• How users spend time communicating

• Role of libraries in supporting communication activities

Examples of roles of libraries:

• Reduce communication time• Make communication time more efficient and

effective• Provide better information, faster and less

expensively• Strive to increase the productivity, quality, and

timeliness of users’ work, teaching, research, and other purposes for which information is used

Proportion of Readings of Library-Provided Documents and Documents From Other

Sources Which Result in Savings

0

20

40

60

80

100

AllDocuments

Journals Books InternalReports

LibraryOther Sources

Productivity of Professionals, As a Function of Amount of Library Use

0

20

40

60

80

100

Frequent LibraryUsersInfrequet LibraryUsers

Proportion of Readings of Library –Provided Documents and Documents From Other

Sources Which Result In Improved Quality of Work

0

20

40

60

80

100

AllDocuments

Journals Books InternalReports

LibraryOther Sources

Proportion of Readings of Library-Provided Documents and Documents from other Sources

Which Result in Performing Work Faster

0

20

40

60

80

100

AllDocuments

Journals Books InternalReports

LibraryOther Sources

Comparison of Library Use by Persons Recognized by Special Awards, “Fast

Trackers,” and Cohorts

0

10

20

30

40

50

60

70

SpecialAwards

"FastTrackers"

Serve onTeams, etc.

Persons RecognizedOthersFast Tracker Cohorts

Library Cost, Value, and Worth

• Library cost - $610 per professionals

• User price/cost of information - $5, 190

• User cost to acquire information - $1,090

• Current organization cost - $1, 700

• Cost of alternatives to library - $5, 010

• Potential “lost” benefits - $12, 200

Indicators of Value and Worth

• Ratio of user cost to acquire information to library cost

1.8 to 1

• Ratio of “willingness to pay” value to library costs

8.5 to 1

More Indicators of Value and Worth

• Ratio of cost alternatives to current organization cost

2.9 to 1

• Ratio of potential “lost benefits” to current organization cost

7.2 to 1

Without Information With InformationCenter Center

Professionals Spend Professionals Spend Professionals Have 121 Hours 27 Hours 94 Hours Available

Acquiring Information Acquiring Information For Thinking,

Experimenting,

Etc.

Time of One Equivalent ofInformation Saves Five Professional Professionals’

Time

Special Library Helps Achieve Parent Organization Goals

• Increase profit (or productivity) and get more for less

• Perform work better and with greater quality

• Speed products from discovery to the marketplace

Increased Profit (or productivity)

• >1/3 of library uses result in saving time or money• >40% of library-provided readings result in saving

time or money• Amount of library use correlated with 5 indicators

of user productivity• 5 studies show a positive correlation with

information-related expenditures and/or productivity

Better Performance and Greater Work Quality

• ~ 40% of library use said to be “absolutely required”

• ~ 60% of visits to libraries said to result in doing work better

• > 60% of readings from library-provided documents result in improved quality

• Professionals who use libraries more than cohorts and non-awards winners recognized through awards, etc.

Speed Products From Discovery to the Marketplace

• ~ 40% of library visits are said to help professionals perform work faster

• ~ 40% of readings of library-provided materials lead to doing work faster

Librarians Have Unique Knowledge of…

• How their community acquires and uses information

• The availability of alternative media, sources, and pricing options

• The economic trade-offs among these alternatives

• What is generally best for the entire organization

Future Roles of Special Librarians

• Decision makers for how organization adopts to electronic environment, by –– Keeping up with options and specific products– Figuring real costs (cost per use; total costs)– Negotiating leases– Voice of reason

• Purchasing / negotiating for entire organization

Goals for Librarians

• Discuss e-publishing issues with your boss

• Identify true costs of communication

• Predict what to expect with electronic journals and share information concerning e-journal realities

• Develop negotiating skills and knowledge of source and media options