Monopoly on journals causes prices to soar
Concerned about the high cost of college? Many people are, but your hard-earned dollars are hardly lining the pockets of history department faculty. What your tuition dollars are doing is fueling the profits of a few multinational media conglomerates that publish journals like Brain Research or Tetrahedron.
Brain Research, a publication from Elsevier Science (owned by Reed Elsevier), costs a staggering $15,428 per year. Reed Elsevier also owns Pergamon, which publishes Tetrahedron; this journal of organic chemistry comes in at $10,320 per year. Considering that many libraries subscribe to thousands of journals, it’s easy to see how the buying power of campus libraries has eroded. Librarians take the blame from faculty if favorite journals are discontinued. But it’s just a few media conglomerates that are largely responsible.
Over the last 15 years, libraries have faced skyrocketing prices for materials at the same time that budgets have barely kept pace with inflation. The result? The system of scholarly communication has come under severe stress. The enormous increase in the volume and price of journals, and the sheer number of them—particularly in science, technology and medicine—has forced libraries to cancel subscriptions and decrease the purchase of monographs. These actions, though necessary, have had the effect of eroding access to the world’s increasing output of research and scholarship.
Over the past 10 years, the cost of scholarly journals has increased 148 percent (or 9.5 percent annually) and the cost of monographs has increased 62 percent (or 4.9 percent annually), while the Consumer Price Index has gone up only 44 percent (or 3.7 percent annually). Lest one think that the natural sciences are the exclusive source of the problem, prices increased 36 percent over the last two years alone for privately published titles in the humanities and social sciences; for example, Cognition increased 48 percent since 1995, Journal of Business Ethics 67 percent and Language and Communication 31 percent.
Why have journal costs risen so dramatically? The private media sector, which is now dominated by a handful of conglomerates, has taken over the publication of journals from scholarly societies—particularly in science, technology and medicine—and is charging what the market will bear. Significant consolidation is also going on in business and law, two other fields with similar profitability. Some increase in rates is to be expected, but increases of more than 20 percent a year for some scientific and technical journals can be justified only by greed.
The average research library maintains 15,000 subscriptions, at a cost of $3.6 million annually. Budgets have been stretched beyond the breaking point primarily by journals published by just a few international conglomerates: Reed Elsevier, Walters Kluwer, Wiley and Plenum (which Walters Kluwer is purchasing). Journals published by professional associations and societies cost one-third to one-fourth the price of commercial journals with an equivalent amount of content.
Many research libraries have canceled up to a quarter million dollars worth of serials. But that hardly allows them to keep up with monograph purchases, which now constitute 1/3 rather than 2/3 of their annual expenditures for materials, thereby endangering the future of this form of publication. University presses have suffered the most from the reduced purchasing power of university libraries, which once accounted for the purchase of 80 percent of university press sales; now libraries buy only about 40 percent of their books. Press runs formerly of 2,000-3,000 copies have dropped down to 1,250-1,500, sending the price of monographs soaring.
As university libraries buy fewer academic books, university presses are rejecting scholarly books out of marketplace considerations. That is, they ask not whether a book will advance the state of human knowledge, but whether it will sell. Young scholars are often shut out of the publishing market. A Columbia professor recently reported that one untenured faculty member was rejected by a university press because his work was “too theoretically sophisticated,” which, he suspects, was “the polite way of saying that, given current market conditions, the monograph will never sell.”
Increasingly, librarians and others in the academic community have concluded that they can no longer sustain a system in which their own faculty sign away the rights to their scholarship to commercial publishers that sell this content back at astronomical prices to a nearly captive market: university libraries.
This crisis in scholarly publishing is being fueled by major international conglomerates that dominate the market not only for print but also for electronic products. And their empires keep growing.
Reed Elsevier, a British/Dutch conglomerate, posted $5.6 billion in sales last year. Reed Elsevier’s 1,200 scientific and technical journal titles account for close to 25 percent of the journal purchases made by many research libraries. Prices for these titles have increased 151 percent over the past six years, and they are among the most costly items purchased. Together, the 121 research libraries in North America spend over $75 million to purchase Elsevier Science titles each year, and that does not include payments for the hundreds of other journals and electronic databases published by this conglomerate, including Publishers Weekly, Library Journal and Lexis/ Nexis.
Although a mega-deal to merge Reed Elsevier with Wolters Kluwer, a rival $2.6 billion Dutch publisher, fell through in March 1998, the two companies continue to pursue smaller partnerships in the international scholarly publishing arena, avoiding the opposition of antitrust authorities in Europe and the United States. Walters Kluwer just purchased Waverly and Plenum; JAI Press/Ablex was just taken over by Reed Elsevier.
A recent study by Mark McCabe, an economist formerly with the Antitrust Division of the Department of Justice (ARL, 10/98), found that for journals published commercially, “prices are indeed positively related to firm portfolio size, and that mergers result in significant price increases.”
Another study published in the same newsletter by Cornell management professor Brendan J. Wyly (ARL, 10/98) found that Reed Elsevier’s net operating margin last year was the 26th highest in the Standard & Poor’s 500, and the company’s net profit margins were extraordinary compared to the periodical publishing industry as a whole. Wolters Kluwer posted a return on equity of 42 percent and Reed Elsevier 28 percent, ranking them in the top one-fourth of periodical publishers. Reed Elsevier’s annual report states that its scientific segment represented 17 percent of its net sales but 26 percent of its total operating income.
What are librarians doing about these developments? Since the early 1980s, they have canceled titles (which results in higher costs for those maintaining subscriptions); relied more on interlibrary loan, cooperative arrangements and document delivery services; and pleaded for more funds from their parent institutions.
But librarians cannot pursue strategies on their own. Scholarly communication is a complex process that requires faculty to publish in order to be tenured or promoted. The current publishing environment is a monopoly-like marketplace increasingly dominated by large commercial conglomerates. In order to transform the process, the higher education community must take collective action. Research libraries are working with professional societies and nonprofit publishers to test a new model for publishing and distributing scholarly materials, one attempting to salvage the endangered monograph and another to create lower-cost scientific journals.
The academic community can no longer sit back and let near-monopoly multinational conglomerates determine the future of scholarship and intellectual inquiry. The entire system of scholarly communication will collapse unless less expensive channels for publication, dissemination and archiving of scholarly research are found.
A scholarly marketplace dominated by a few corporate giants is holding our universities hostage. The universities must either seize the opportunity to reclaim their intellectual property or remain captive to the commercial control now dominating access to scholarly communication.
Nancy Kranich is associate dean of the New York University Libraries.