Publishing Cooperatives

Raym CrowSenior Consultant, SPARC Consulting

Group

THE SCHOLARLY PUBLISHING & ACADEMIC RESOURCES COALITION21 Dupont Circle NW, Suite 800Washington, DC 20036(202) 296-2296www.arl.org/sparc

First International Public Knowledge Project Scholarly

Publishing ConferenceVancouver, BC

What We’ll Cover

1. Society publishers are economically important

What We’ll Cover

1. Society publishers are economically important

2. Society publishers face market & structural constraints

What We’ll Cover

1. Society publishers are economically important

2. Society publishers face market & structural constraints

3. Cooperatives offer a model to support society self-publishing

First Point:Society publishers are economically important

The Mixed Market for Journals

~23,000 scholarly & scientific journals

Increasing at~3. 5% per year

For-profit journalsincreasing at 2X the rate of society journals

Per Ulrich’s analysis, 2005.

Doubling every 22 years

Commercial publishersrepresent slightly larger slices of much larger pie

68%

32%

Per Ulrich’s analysis, 2005.

The Mixed Market, 2025

Average prices differ by publisher type

Per Bergstrom & Dhuey, 2003.

The Mixed Market for Journals

Journals per Society

Almost 90% of publishing societies publish one journal

Over 97% publisher three or fewer journals

Per Ulrich’s analysis, 2005.

Journals by Medium

Substantial portion of peer reviewed journals remain print only

Per Ulrich’s analysis, 2005.

Why Society Publishers Important

• Scholarly & scientific publishing doubling every 20 years

• For-profit journals growing faster than non-profits

• For-profit journals cost 3X to 5X more than self-published society journals

Second Point:Society publishers face market & structural constraints

Market Pressures

• Pressure on subscription model– For-profit prices & bundles capturing

budget dollars

– Tight library budgets

– Many small non-profits competing against a few large for-profits

– Lack of market share & market power

Market Pressures

• Pressure on subscription model

• Increased demand for online access & functionality– Requires ongoing technology

investment

– Online transition can raise member retention issues

Market Pressures

• Pressure on subscription model

• Increased demand for online access & functionality

•Market reaction to high commercial prices

Market Pressures

• Pressure on subscription model

• Increased demand for online access & functionality

• Market reaction to high commercial prices

• Exodus from self-publishing

Internal Constraints

• Insufficient staff resources– Core competence in content &

certification

– Scarce in-house business management resources

– Passive approach to subscription model

Internal Constraints

• Insufficient staff resources•Lack of investment capital

– Hinders response to market demand

– Impedes technological innovation

Internal Constraints

• Insufficient staff resources• Lack of investment capital• Innate conservatism

– Affects perception of risk– Desire for control

Shared Issues of Society Publishers• Very small• Marginal market power—as

buyers• Marginal market power—as

sellers • Insufficient staff resources• Lack access to key services• Undercapitalized• Conservative & risk averse

Third Point:Cooperatives offer a response to the issues society publishers face

Cooperatives Are Everywhere

Consumer Cooperatives

Producer Cooperatives

Shared Service Cooperatives

Cooperative Basics

•Owned by members– Member equity based on use of

services

Cooperative Basics

• Owned by members•Controlled by members

– Members exercise democratic control

Cooperative Basics

• Owned by members• Controlled by members•For the benefit of members

– Members determine services– Provides services at cost

Co-op Financial Overview

Co-op Financial Overview

Co-op Financial Overview

Co-op Financial Overview

Potential Cooperative Structures

Cooperative Benefits

Collective action to—

Cooperative Benefits

Collective action to—• Increase market power &

visibility

Cooperative Benefits

Collective action to—• Increase market power &

visibility•Reduce costs via scale

economies & increased bargaining power

Cooperative Benefits

Collective action to—• Increase market power &

visibility• Reduce costs•Supply missing services

Cooperative Benefits

Collective action to—• Increase market power &

visibility• Reduce costs• Supply missing services •Pool capital & share risk

Cooperative Benefits

Collective action to—• Increase market power &

visibility• Reduce costs• Supply missing services • Pool capital & share risk•Retain control

Benefits for Libraries

•Lower content costs– Maintain moderate prices– Increase society role in creating

new publishing channels

Benefits for Libraries

• Lower content costs•Provide framework for

alternative funding models– Allow publishers to explore new

income models– Provide way for libraries to

share risk

In Sum, Publishing Cooperatives• Address society publisher

issues—on publishers’ own terms

• Increase society publishing role• Lower publisher & library costs• Provide basis for new funding

models• Complement existing initiatives• Scalable & replicable

For More Information

Raym CrowSenior Consultant

SPARC Consulting Groupcrow@arl.org

Next Steps: Prerequisites

• Adequately defined scope

• Sufficient scale to warrant group action

• Able to provide a solution solely on economic terms

• Culturally, politically & economically appropriate for the group

Next Steps: Co-op Launch Process

• Exploratory meeting: identify unserved needs

• Float concept proposal that conveys vision

• Survey potential member universe

• Analyze feasibility

• Develop business plan

• Implement & launch