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Journal Publisher Click-Through Monopoly: A Trojan Horse  Peter Suber
 Feb 01, 2002 17:11 PST 
[Forwarding from Stevan Harnad. Let me correct my small citation error
before it goes much further. The date on the issue of _Information Today_
containing the interview with Derk Haank is February '02 (that is, 2002),
not February 2. --Peter.]



Date:         Fri, 1 Feb 2002 23:40:15 +0000
From: Stevan Harnad <har-@cogprints.soton.ac.uk>
Subject:      Re: Journal Publisher Click-Through Monopoly: A Trojan Horse
To: SEPTEMBER-@LISTSERVER.SIGMAXI.ORG

On Fri, 1 Feb 2002, Peter Suber wrote:

 Friends: I thought you'd like to know that in the Feb. 2 issue of
_Information Today_, Dick Kaser interviews Elsevier CEO Derk Haank
on his response to the Public Library of Science (PLoS).

Haank: "At Elsevier...we are much closer to a PLoS initiative than
anybody believes, because we are working toward the same end."

Read the rest here,
http://www.infotoday.com/it/feb02/kaser.htm

The same old Trojan Horse: Global site licenses.

When big-budget publishers hear compliants about high prices and
access restricted to the few who can afford it, they always come
up with the same fantasy: A global site license, everyone gets
access to everything, one flat rate, everyone chips in a bit.
Everyone's happy. No compliants.

Let me count the fallacies in this:

(1) Show me a product about which people complain that its price is too
high and too few can afford it. And show me a producer who doesn't say:
"Get me more paying customers and my price will come down. Or we can
agree on a flat global rate up-front, and then you can distribute it
all any way you like."

(2) This is called a supply curve, and it works for any product where
it's cheaper to make and sell more than less. It's even better where you
have a digital product of which you can make limitless quantities for
no extra cost, for then the curve is essentially flat, and the supplier
can more or less pick his price, with only one global licensee to haggle
with.

(3) This is also how monopolies and oligopolies think and work, and
especially for products where there is inelastic demand.

(4) The trouble is that in a monopoly with advance flat-rate pricing,
there is absolutely no pressure to find ways to reduce costs. Everything
is fixed in advance -- the product, the price, the market.

(5) So what the worldwide consortium would be getting a global site
license for would certainly not be just the essentials; they would be
getting every bit of added cost and frill the producer chose to wrap
in. And their only bargaining point would be the annual parley about
the price of the global site license.

(6) And the assumption is that the price per individual institution
would be so low that everyone could afford to pay to get everything.
This assumption is of course false. There will always be those who
can't afford it.

(7) Moreover, the SuperBigDeal would have to be oligopolistic, since
Elsevier only has 20% (of SMT: 10% of the whole 20,000, across
disciplines). Is every institution in the world imagined to be able to
afford the flat rate for the total 20K?

No, this is not evidence that PLoS and Elsevier are converging.
PLoS (and FOS, and anyone else who gives it a little bit of thought)
want this essential product, our own giveaway refereed research, to be
accessible (online) to all of its potential users anywhere, and the
only way that can be ensured is if it is free. Any price tag at all cuts
user access.

Is it free to produce? No. But it costs much less than what it is
currently being sold for. How to pay those lower costs? Out of the
savings from its current bloated cost. How to get there from here? Let
its authors give their peer-reviewed papers away online for free, now,
by self-archiving them in their institutions' Eprint Archives, freeing
the 20,000.

That will not only save their institutions the subscription/license
tolls for the 20,000, but it will force the publishers of the 20,000 to
minimize their costs by downsizing to the essentials only: peer review.
Once costs are down to the essentials, they can be paid up-front, as
peer-review chorges per paper published, out of 10-30% of the
institutional 100% access-toll savings.

Amen.

Stevan Harnad
	
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