Wednesday, May 02, 2012

Journal price increases: the costlier the journal the more important smaller percentage increase

To state the obvious: the more expensive a journal is, the more an increase costs in dollars given the same percentage. A journal price increase for a costly journal can look small from a percentage perspective, but actually be quite large from a dollars perspective.

To illustrate, consider this hypothetical (but realistic) scenario):

Small society journal (SSJ) has been charging a subscription fee of $100. Unlike the large commercial scholarly publishers, this society has not raised prices every year. This fee has not covered costs for several years, and so the society has decided to increase the subscription rate for this year to $150.

Original cost:      $100
New price:  $150
Increase in %:  50%
Increase in $:  $50

Commercial publisher journal (CPJ) has been charging a subscription fee of $10,000. One of the reasons for this high fee is that prices have been raised every year for the last few decades at rates above inflation. This year, CPJ is raising their prices again by 5%, to $10,500.

Original cost:  $10,000
New price:  $10,500
Increase in %:  5%
Increase in $:  $500

Discussion:  a 5% increase for a costly journal can easily cost ten times more, in dollar terms, than a 50% increase for an inexpensive journal.

Note that this analysis does not necessarily fit other formats such as scholarly monographs, where the diversion of funding from monographs to journals has distorted the market (less money for monographs means fewer copies bought  and printed, raising prices on a per-copy basis).

Conclusion: when considering journal prices increases, dollar amounts are more important than percentages. Also, the more expensive the journal, the more important it is to negotiate lower or no price increases.

Sent to Liblicense-l May 2, 2012. 

1 comment:

  1. So when Commercial publisher says 'our increases have been among the lowest in the world, including among society publishers, at x%', you know there is more to the story...


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