The supply market for scientific journal subscriptions is unlike most other supply markets. Free content, based on publicly funded research, is transformed into premium digital subscriptions by an oligarchy of commercial publishers with net profit margins well above 20%. The oligopoly is being challenged by the Open Access and Open Science movements, and changes are starting to happen. Nevertheless, fundamental structural changes to the supply market will take time. So, how can public and corporate libraries negotiate the best scientific journal subscription deals for their organisations right now? This article shares some tried and tested tips.
On 10 December 2020, Pfizer and BioNTech had the Phase III clinical trial results for their coronavirus vaccine published in the New England Journal of Medicine (NEJM). Full text of the article entitled, Safety and Efficacy of the BNT162b2 mRNA Covid-19 Vaccine is freely available for anyone to read on the NEJM website. According to its editorial policies, the scientific journal makes all articles freely available on its website 6 months after publication and in some cases earlier.
Though Pfizer has not received public research grants to develop the vaccine, BioNtech has. So, it seems only fair that the published trial results should be freely available for anyone to read.
Premium scientific journal subscriptions based on publicly funded research
But when it comes to accessing published scientific research, it often does not work like that. In most cases it works like this:
- Research is carried out with the support of research grants funded by taxpayers. To carry out any meaningful scientific research, scientists need access to published scientific literature. They get that access by paying for premium subscriptions to the most important journals. For the less relevant scientific journals, they buy access on an article-by-article basis.
- The trial results are published in a prestigious scientific journal. While the scientists do not pay for the privilege of publishing, they have to sign over their copyrights in the articles to the journal. Those are the terms – take it or leave it.
- The very same published research is then sold back (together with a lot of other research) at a high cost to the very same organisations that provided it free of charge to the publishers. The published research is sold in the form of premium subscriptions to electronic versions of scientific journals. And the cost is not trivial. In fact, scientific publishing is big business with a global annual revenue of £19 billion.
The business model that keeps giving
That’s quite a remarkable business model. You get something for free which was developed using public funds, then sell it at a premium. It sounds ideal from the publisher’s point of view, but not so ideal from the points of view of the institutions, universities and companies that have to buy scientific journal subscriptions.
But if it’s such a raw deal, can’t these institutions, universities and companies just go elsewhere? Not really. Or, at least their options are very limited. That’s because the largest scientific publishers form a de facto oligopoly. Why? Well, as I mentioned earlier, the scientists were made to sign over their copyrights, i.e. the scientific publishers now own the articles. So, to buy access to those articles you have to go to those same publishers. And to do their jobs, scientists need access to all peer-reviewed research that has been published in their areas, no matter which journal it’s been published in.
Another factor that bolsters the oligarchic market positions of the largest scientific publishers is that they have significant brand equity. Many scientists and their organisations want to leverage that brand equity to boost their own reputations, careers and commercial prospects. Having an article published in a high impact factor journal like the New England Journal of Medicine, the Lancet (published by Elsevier) or Cancer Journal for Clinicians (published by Wiley-Blackwell) creates the perception that the quality of the research must be world class.
Many of the largest scientific publishers have taken full advantage of their oligarchic status. Elsevier, founded in 1880, has historically charged double-digit % annual increases for subscribers year-on-year. As a result, their share price (LON: REL) has increased by 284% from September 2009 to September 2019. You would expect amazing profits to go along with those kinds of price increases and share price growth. And indeed, that is the case. According to Elsevier’s (Relex plc) 2019 annual report, their net profit margin (adjusted) was an eye-popping 23%.
The backlash
For these reasons, Elsevier has, for years, attracted anger from academic and scientific communities, who have sometimes attempted to change the publisher’s behaviour by boycotting its scientific journal subscriptions. Despite such efforts, subscription price increases and profits remain largely intact.
So, where does that leave public and corporate libraries that must license scientific journal subscriptions to meet the needs of internal users? How do libraries stretch their flat or declining content budgets to meet the demands of their users?
The bad news is that there is no single silver bullet. The good news is that if you take a strategic multi-faceted approach, the sum of the parts will make a difference. I have spent 15 years of my career negotiating licenses in the digital content space, both on the library side and on the vendor side. Based on insights over those 15 years, here’s what I encourage you to consider.
Develop a strategy
It may be tempting to just get stuck in with haggling over the increase at subscription renewal time. And while that may yield some results, they won’t be great results if that’s all you do. The balance of power is tipped against you, so you need to take a step back, think, strategise and then take co-ordinated action on a number of fronts.
The first thing to do is ensure you fully understand the strategy of your organisation and what implications that may have for content licensing. Whatever you do, your approach needs to be fully aligned with, and supportive of, the overall aims of your organisation, as well as the strategies of key stakeholders you serve.
For a pharmaceutical company, I led the development of a content licensing strategy that involved a combination of establishing a consistent negotiation approach based on best practice, launching global value enhancement projects and building strategic relationships with selected vendors. This approach supported corporate goals of developing new medicines in a more cost-controlled way.
Change the supply market dynamics
It’s probably clear to you by now that much commercial power is concentrated in the hands of a few large scientific publishers. So, how about levelling the playing field a little? Of course, you won’t be able to do that on your own, but there are already people and organisations out there who are working on changing how the scientific information supply market works. You could explore ways of supporting those efforts. I am in particular thinking of the Open Access movement.
This movement started in the early 1990s as a reaction to spiralling journal subscription prices. The idea is that instead of paying for journal subscriptions, the articles should be freely available for anyone to read on the internet. The costs of publishing would instead be covered by a fee levied on the organisation seeking to have their research published.
This open way of making published research available has lots of benefits for society in general. More scientists accessing more published science enables even more research to take place. And then, of course, it helps take some of the pressure off library budgets. The Open Access movement has gained a lot of momentum since the early 1990s, and it’s forcing traditional publishers to re-think and innovate.
That innovation, though, does not always benefit libraries. While some publishers have made some journals Open Access, others have created a hybrid model which enables the publisher to charge an Open Access publishing fee and a high journal subscription fee. How? The publisher makes single articles available Open Access if that’s what the submitter of the manuscript wants. However, the vast majority of other content in the journal is still behind a paywall. So, this hybrid model, often described as double dipping, actually makes published research more expensive for libraries. Not only do their institutions have to pay a publishing fee, they are still stuck with that high priced subscription.
This type of tug of war between libraries’ visions of Open Access and publishers’ profit maximisation efforts will continue. And science funders are weighing in on the side of Open Access. Many of them have joined forces in Coalition S, which was formed in September 2018. They have created a set of principles, called Plan S, which requires that, “from 2021, scientific publications that result from research funded by public grants must be published in compliant Open Access journals or platforms.”
From a content licencing point of view the Open Access movement has helped create a new pricing model – Read and Open Access Publish. A research institution pays a fixed fee, which covers access to read scientific journals and entitles the institution to have its research published Open Access at no additional cost. The first large scale deal of that nature was entered into in January 2019 between Wiley and a consortium of 700 German libraries, research institutions and universities
National governments have been supporters of Open Access for some time. In June 2014, for example, the Danish government announced its national Open Access strategy, outlining how and by when publicly funded research must be made available Open Access. Measures of this kind clearly add momentum to the Open Access movement and are, in the long-term, set to change the dynamics of the published research market. Negotiators of scientific journal subscriptions can contribute to this momentum by seeking to influence scientists from their organisations to publish Open Access sooner rather than later.
But if we step back and look at the wider picture, could we become less dependent on scientific publishers altogether? What if research results were made available through repositories before any publication takes place? What if science itself, pre-publication, were to be made open, rather than just opening access to published journals? That’s the idea behind Open Science. Not only does this have the potential to bypass publishers, it would also be much easier to reproduce scientific experiments according to astrophysicist Dr Rachael Ainsworth. The issue with published research is that, in most cases, experiments cannot be reproduced based on the content in the article. That’s because what’s published is often a simplified description of the actual research.
Maximise value at optimal cost
Library budgets tend to be under pressure and overstretched. That goes for both public and private sector organisations. As explained in this article, much of that pressure is applied by publishers’ pursuit of profit. But increasing expectations of users and evolution in how organisations collaborate are also forces that put upward pressure on licensing costs. So, managing the spend on scientific journal subscriptions should be a priority by default.
However, licensing scientific journals is about much more than managing costs. It’s about getting the most value from that spend. What does value mean? You’ll need to look to your organisational strategy and the strategies of the key stakeholders you serve to answer that question. For a global pharmaceutical company I advised, the focus was on making published scientific research available to scientists and other key employees in a way that supported the innovation centred corporate strategy. That meant removing barriers to accessing information and actively facilitating copyright compliant collaboration and sharing.
Of course, that dream of a seamless information environment comes at a cost. But so does the status quo of information silos, access restrictions and the laborious work arounds imposed on staff just for them to do their jobs. Some of these costs are tangible and can be calculated in terms of time lost. Others have even more real-world impact, but are impossible to quantify. How do you quantify the impact of bringing a novel medicine to market 6 months late, or not discovering it at all?
As was the case with this client, you may be able to make a business case for incremental investment, purely based on the quantifiable cost and benefits. If you cannot make a business case in this way, the non-quantifiable benefits may still be compelling enough for your organisation to take a calculated risk, provided you show such risk can be managed.
Negotiate scientific journal subscriptions with confidence
You are faced with a supply market oligopoly where a handful of publishers probably represent 80% of your content licensing spend and the remaining 20% is made up of a long tail of small publishers. What’s there to negotiate about? Quite a lot actually, as I have often spoken about at international conferences such as Internet Librarian International, SLA Annual Conference and Pharma-Bio-Med. Below I have highlighted a few things to think about before embarking on a negotiation.
Prepare
The party that’s the best prepared often gets the best outcome. So, invest some time and effort in it – particularly if the outcome of the negotiation is of high importance to your organisation. There are a number of things you need to be clear about before you enter into negotiations.
Firstly, you need to know what you want. Or rather, what your stakeholders want. To know that, you need to find out what’s going on in their business environments. Are they looking to use data analytics in a new way that would trigger new requirements for text mining? Are there plans to outsource business processes? Are acquisitions of new companies on the horizon? Any planned collaborations or shifts in workforce structure, such as increased use of contractors? All of these will likely impact on the type of deal you pursue with publishers. In the article 7 Things to Know Before Signing a License, I have described how such changes may shape your negotiation approach.
Secondly, you need to prioritise. When negotiating hardly anyone gets everything they ask for. So, you need to be clear on what you are willing to trade and what you are not. The acronym MIL provides a straightforward framework for establishing your negotiation priorities. MIL means “Must have – Intend to have – would Like to have”. Likewise, establishing your Best Alternative to a Negotiated Agreement (BATNA) is essential to establish in the planning phase.
Given the oligopolistic nature of the supply market, it may not be feasible to walk away with no deal at all, but perhaps the scope and cost could be significantly reduced. Though not an ideal situation for users, some institutions have been able to walk away from publisher deals in the past. As recently as February 2019 the University of California cancelled its agreement with Elsevier when negotiations of a read-and-publish deal broke down. Elsevier’s 80% increase just became too much, so the university’s BATNA was to live without scientific journal subscriptions from that publisher.
Thirdly, linked to the University of California example, you need to take stock of the power you do have. The university, which produces almost 10% of US research papers, is a great contributor of content to Elsevier’s journals, where it publishes 18% of its research. Even for a publisher with a dominant position like Elsevier, the absence of that much content and revenue ($11 million/year) is bound to be felt.
Explore options
Too often people get locked into “positions” when negotiating. That’s not helpful for either party. A more constructive approach is to treat the problem, not the other party, as the “enemy”. You can do that by encouraging an environment where it’s both acceptable and desirable to come up with option without initially committing to them.
The advantage of that approach is that the more options you have, the more likely you are to eventually agree on something that suits both parties. The ones that are not workable will quickly be exposed as such, but they may have sparked dialogue and ideas that lead to new, more workable, options. In addition to being useful at the beginning of a negotiation, this type of joint creativity can be very powerful when negotiations have been deadlocked.
That’s why exploring options is one of my favourite aspects of negotiation. One time I was asked to take over a deadlocked negotiation with a scientific publisher to try to move it forward. Discussions had gone round in circles for a full year, with both parties repeating the same arguments again and again and again. By suggesting new options, which took the underlying concerns of both parties into account, and by continually improving the most promising of those options, we eventually reached agreement within a month. The agreed option was quirky and not immediately intuitive, but it worked.
Switch between negotiation styles
We all have our favourite negotiation style. But it’s important to be able to effortlessly switch between styles. Otherwise, you not only become predictable, but you also risk using a style that is inappropriate for a particular situation.
Using logic as a negotiation style tends to be a popular choice. And in many cases, it works well. You could use this approach to argue why you shouldn’t pay an increase when usage hasn’t gone up. Backed up with usage statistics, that’s a good argument. Of course, the publisher will have its own “logic” where the conclusion likely is that you should be subject to a price increase. If you get your logic established first, you are more likely to win that “war of logic”.
Your response to a demand for a price increase could be based on emotion, rather than logic. A shocked facial expression. A statement to the effect of, “We cannot afford it!”. You may express “disappointment”. No logic is required to back any of this up, and a response from the publisher based on logic will not work either. You still remain shocked, disappointed and unable to pay, regardless of any logic the publisher can throw at you.
Bargaining and compromise are yet another two negotiation styles you could use. While they sound similar, there are some differences. Bargaining is a little bit like taking turns. You win on some points and loose on others, ideally trading stuff you are not that bothered about for stuff you really want. Compromise is more about splitting the difference. Say the publisher wants you to pay a 10% increase for your scientific journal subscription. You think the increase should be 0% because the vendor has provided really poor customer service. Neither of you are willing to walk away from the deal, so you agree on a 5% increase. You’ve compromised. One party pays 5% more than they think they should, and the other party received 5% less than they think they should. Both parties are equally “5% unhappy”.
In conclusion…
Though the landscape is slowly changing, the scientific journal subscription supply market is anything but a level playing field. But with the right skills, collaborative working and strategic thinking you will be able to negotiate some amazing deals.
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Armand Brevig (M.Eng, MBA), our Managing Director and author of this article, has 15 years’ experience negotiating digital content licenses for companies such as Takeda, AstraZeneca and Thomson Reuters, with responsibility for spend up to $75 mill./year. He has successfully applied best practice procurement principles to the digital content licensing space.
