“Saying Nix To Big Deals and the Terrible Fix”


This morning I was lucky to be able to attend a presentation by Ted Bergstrom called “Some Economics of Saying Nix To Big Deals and the Terrible Fix.” Professor Ted Bergstrom of the University of California, Santa Barbara has been collaborating with Paul Courant and Preston McAfee to learn about the deals behind Big Deals and find out what the contracts really say. One juicy tidbit was that similar institutions for similar contracts can pay as much as double (or half) of what others are paying, making the idea of a costs formula basis for pricing clearly a fiction.

The short version of his finding is encapsulated in Ado Annie’s “Cain’t Say No” song from the Rogers & Hammerstein musical Oklahoma.

I’m jest a girl who cain’t say ‘no,’
I’m in a terrible fix!
I always say, ‘Come on, let’s go,’
Jest when I oughta say ‘Nix.’

The idea (oversimplified) is that the commercial publishers, like Elsevier, are the sweet-talkin’ fine young men and the libraries are Ado Annie, with a heart of gold but without a lick of good sense. In the show, Ado Annie ends up rescued (sorta’) by a combination of her sensible father and the young man who truly cares and is really on her side. The idea in this presentation is to look at the stories we are being told, how they are being told, what the real story is, and to generally piece together a sensible response beyond that of a young woman flattered that the peddlar will offer her a special deal if he can steal a few kisses on the side.

I was able to livetweet the event (until my battery ran out), which generated some interesting conversations with people from Philadelphia PA, Brockport NY, West Lafayette IN, Albuquerque NM, Denver CO, Lebanon NH, and even local folk from Ann Arbor who weren’t able to attend!


–> BEGIN LIVETWEET <–

* WARNING: Will be minimally livetweeting talk by Ted Bergstrom on economics of library subscription models.
* He starts by making interesting parallel between how libs select/pay journals & drs prescribe for patients – payer's not selector
* "monopolistic paradise" & California power plant economics, w/gov paying but industry setting price. Oops! "Enter ENRON"
* Interesting look at the relatively equitable historical model of paper publishing, w/ 1copy=1sub pricing + shelf space 4 storage.

  • navi: RT @pfanderson “monopolistic paradise” & California power plant economics, gov paying but industry setting price. Oops! Enter ENRON
  • me: @navi Well, isn’t that what libs are doing? State school, gov pays, publishers set prices, and (per California) the taxpayers lost

* w/ web access, publisher goal is extract as close as possible 2 ALL library’s “surplus” budget via Big Deals. New jrnls not added
* Big Deals created “crack journals” w/ faculty addicted 2 online access, unwilling 2 use print. “Can’t just say no” Audience laughs.
* Ted describes getting ALL of Elsevier’s journals as “freedom contract”, not getting all is called “complete contract.” More laughs.

  • srharris19: @pfanderson Freedom *from* your money!🙂
  • me: @srharris19 Exactly! “freedom contract” means faculty get everything for free
  • srharris19: @pfanderson I’m on an anti- big deals kick. I want access to everything, want to pay based on what we actually use.
  • me: @srharris19 I hope Ted puts his slides on Slideshare or video online. His model does what you want.
  • srharris19: “Big deal” subscription packages are “just in case” collection development. Pay a lot for stuff that doesn’t get used… just in case!

* Oooh, scary — ask faculty to pay-per-view. Uh hunh. Right. Elsevier charges ~$35/view for individuals.
* Ted points out that publishers don’t provide stats / metrics that allow libs to evaluate what we’re spending and how it is used
* Hehehe. Non disclosure agreements block libs fr sharing contracts w/ econs studying models. FOIA saved the day. “Pursuant to …”

  • srharris19: @pfanderson We’re an open records state. Non-disclosure clauses are invalid. Yay!

* Ted keeps emphasizing that costs 2 publishers 4 online access approach 0%, but costs 2 libs R significantly greater than 1% (~7%)
* Interesting comment – libns like contracts kept secret to promote fiction they are getting a “deal”. But secrets actually hurt all
* He isn’t even mentioning the problem that users pay for their own access not realizing library already paid.
* Propose PPV 4 endusers. Works in no-fail resources, but not when quality is an issue, & endusers not best informed 4 choice #health
* “so long as monopolist 4profit publishing survives, these $$ R as real 2 U’s as heating/electric, shd B economized” Bingo.
* Does it make economic sense for monopolist publishing models to survive?
* Why Elsevier has such small profits, when small publishers like OSA charge less & make higher profits? Administrative overhead?

  • jokrausdu: @pfanderson How is 30-40% profit small for Elsevier? OSA=optical society of America?
  • jokrausdu: @pfanderson How can a non-profit society publisher make a “profit”? The money is put back into society activities, conferences, etc.
  • me: @jokrausdu Actually, he said that. OSA pushes profits back into RESEARCH!! What a concept, eh?

* Efficiency: allow online access at no added cost, or not pub journal at all if setup exceeds value to audience
* Oh, this is cool. Model proposed that rewards authors for publishing in cheap journals – cheap=more readers, more cites

  • jokrausdu: Faculty want to publish in high “impact” journals with high readership, not always = cheap. @pfanderson You prob. already know that though.
  • me: @jokrausdu Yes – he is proposing pricing model to shift high impact to cheaper journals. Wish I understood better.

* Drop Big Deal subscriptions. Subscribe to avg cost jrnls as needed. Subsidize pay per view in *part*, user bears rest of cost.

  • novoseek: follow @pfanderson and for tracking talk by Ted Bergstrom on economics of library subscription models.

Twitter: LiveTweet #libecon

* Praises institutional repositories, esp local one 4 contract to host Elsevier articles by local authors. Authors to provide copies
* Can publishers really stop authors from sharing copies of their own articles?

  • BudGibson: @pfanderson According to copyright law, yes.
  • me: @BudGibson He says not for last draft of article – faculty can share that with impunity.
  • BudGibson: @pfanderson So, I guess the publisher only has copyright for the version that is actually published.
  • me: @BudGibson Exactly. Publisher owns the copy they format and edit, not the copy as submitted.

* He mentions that more and more people are putting early drafts of articles online with no penalty.
* Q fr audience: how do we know if we need the article before we pay for it? How do we sample? We risk time spent plus cost of access
* Ted personally will not write, publish or review for journals that charge over $1000 for a year subscription.
* Q fr audience: remembering early computer use fees as parallel to current dynamic. Interesting. Wd make gd article.
* Another option – get libraries out of business as paying for subscriptions. Charge to grants, user pays fees, etc.
* Reputation of existing journals is what monopoly is built on. Doesn’t erode quickly, and won’t if freedom contracts persist.
* what would user fees/ PPV do to interlibrary loan? Ouch. That would take some negotiations.

  • davideisert@pfanderson I would stop using the library and just buy from Amazon, Borders, or B&N
  • me: @davideisert Hard to buy research journals from Amazon, Borders, Barnes & Noble. Probably in future …
  • davideisert@pfanderson But that isn’t what I am getting from ILL. Local library typically has what I need.
  • me: @davideisert Here in MI, state is closing state library & funds 4 publibs. Then you can’t get it. Can’t assume local library will persist

* Q: How do publishers maximise their profit? How do nonprofits succeed at this better? A: What gets called profits? Fancy accounting
* Hmmm. Blackwell divides online subscription fees rcd by cost of journal. Nonprofits charge less, receive less.
* MI, WI, IL Elsevier contracts for “freedom contract” 2mil, 2.3 mil, 1.2 mil – Wisconsin got the “good” deal

  • Rudilibrarian: Which was IL?
  • me: Illinois.
  • Rudibrarian: @pfanderson got that — was wondering which number? And hearing my SUNY peeps cry
  • me: @Rudibrarian There was a lot of backchat in the room when those numbers came out! We paid almost double WI. Ouch.
  • me: @Rudibrarian I’m not sure, but I *think* IL was the 2mil, and MI the 2.3mil.
  • loganrath: @pfanderson how’d they negotiate that??
  • @loganrath He doesn’t know backstory.

* Battery out, have to stop. SORRY! Will blog.
–> END LIVETWEET <–


Final discussion and comments included this bits.
From the audience (mostly Scott Martin at this point):
– Libraries should be thinking of collections, not conduits.
– Many people accessing something doesn’t mean it is good.
– The idea that additional access costs $0 is an article of faith, not a guarantee for the future.

Q: What about blogs and Science 2.0 for self-publishing and collaborative science and research? How could this impact on economic models?
A: Organized open access such as PLoS still tends to have what seems to be excessive costs to preserve online access. What is the money for? Where is it going? PLoS actually has negative profist. Why? Still, for those topics where blogging is possible and effective, this may have some impact.

Learn more:
Ted Bergstrom: http://www.econ.ucsb.edu/~tedb/ OR
http://www.econ.ucsb.edu/%7Etedb/Journals/BundleContracts.html.

One response to ““Saying Nix To Big Deals and the Terrible Fix”

  1. Pingback: Farmers, Cowboys, Scouts & Librarians « Emerging Technologies Librarian

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