September's was entitled Authors have the power, let them use it: rebuttal to David Shulenburger. ARL had published an article by Dr. Shulenburger (which I flagged in comments) arguing that, in Mackie-Mason's words:
flipping scholarly publishing of journal articles from a post-publication, subscription-based business model to a pre-publication, article-processing-charge model would make things worse: that is, lead to higher, not lower payments to publishers (and higher resulting profits for them).The rebuttal is, in essence:
Dr. Shulenberger recommends the right approach to the question - examining supply and demand conditions after a flip. However, he makes a fundamental error in his analysis, and as a result, reaches the wrong conclusion. Following standard economic logic (as he recommends) leads to the opposite conclusion: a flip to an APC-based system would most likely lower the payments to publishers.The error was committed when:
[Shulenburger] states "individual faculty members have no market power with journal publishers", and thus concludes that since shifting payment from subscriptions to APCs moves decision making to authors, the result is that the publications suppliers (publishers) will have more relative market power in the APC world, and will thus be able to charge even higher prices than they do today. But he is wrong: authors hold the fundamental power in this market, and the precise problem with the subscription model is that authors are excluded from the market.Mackie-Mason continues:
Dr. Shulenburger starts his article by making precisely this point: "the root of the sellers' market power has been the granting by authors of all ownership and distribution rights to their work to the journals owned by the sellers." Publishers are not the original suppliers of scholarly content: they are intermediaries standing between authors and libraries. The authors own the original content. Until the publishers obtain copyright from the authors, publishers have no market power.As I've pointed out before, one simple approach to preventing the journal publishers extracting monopoly rents would be for Universities to declare that, as the authors are employees, their writings are works for hire, and thus the copyright in them belongs to the University. Stanford's copyright policy states:
In accord with academic tradition, except to the extent set forth in this policy, Stanford does not claim ownership to pedagogical, scholarly, or artistic works, regardless of their form of expression.But this tradition has become costly. The policy adds:
The University claims no ownership of ... other works of artistic imagination which are not institutional works and did not make significant use of University resources or the services of University non-faculty employees working within the scope of their employment.Note that this is a University policy, not a statement of law. The invaluable fairuse.stanford.edu states:
When two or more authors prepare a work with the intent to combine their contributions into inseparable or interdependent parts, the work is considered joint work and the authors are considered joint copyright owners. The most common example of a joint work is when a book or article has two or more authors. ... The U.S. Copyright Office considers joint copyright owners to have an equal right to register and enforce the copyright. Unless the joint owners make a written agreement to the contrary, each copyright owner has the right to commercially exploit the copyright, provided that the other copyright owners get an equal share of the proceeds.There are very few articles all of whose authors are faculty; almost all primary authors are graduate students or post-docs whose status as employees is hard to dispute. Thus it is at least arguable that the University is already a joint owner of copyright in almost all articles. Were the major Universities, whose output forms a major part of the publishers' stock-in-trade, to assert this and refuse to transfer copyright, the publishers' market power would be shown to be minimal. As Creative Commons licenses demonstrate, the publishers' demand for copyright transfer has nothing to do with their ability to disseminate research, only to profit from doing so.
Mackie-Mason argues that APCs, by involving the author in the market, enable a new form of competition:
if a potential publisher charges a high APC, the author can submit her paper to another journal with a lower APC. With all authors making such decisions every day, publishers will need ... to start competing with each other on price. And it is precisely that competition that will lead to lower prices in an APC world than in a subscription world.Rick Anderson makes a similar point at Scholarly Kitchen.
Mackie-Mason's October post Supporting OA2020: Changing the journal funding model to pre-payment doesn't increase publisher market power elaborates many of the same arguments in response to an open letter from Ginny Steel, UCLA University Librarian. The additional details are worth reading. Note in particular his discussion of the argument, supported by research from the Max Planck Institute and the University of California Libraries, that a fully APC-based system would increase costs for wealthy, research-intensive insitutions, and decrease them for the less wealthy. While not a popular argument at Berkeley or UCLA (or Stanford), this is a feature not a bug.
As a layman I'm reluctant to argue with a Professor of Economics, at Berkeley no less, but both he and the subjects of his critiques appear to have missed a point that (with a caveat I will discuss below) strengthens his case. Each posits the alternatives to APCs charged by, and varying among, individual journals as being subscriptions charged by, and varying among, individual journals.
But this is not an accurate description of the market for academic journals. Most transactions are "big deals" in which a price varying among institutions is charged for access to the same bundle of journals. The notional, but rarely charged, subscription price for the small number of must-have journals is set to motivate take-up of the "big deal", by making it appear to the library that they are getting a large number of nice-to-have but not essential journals "for free". Bundling is a well-known anti-competitive practice, as shown for example by the history of Microsoft's domination of the operating system market. See Andrew Odlyzko's fascinating paper Open Access, library and publisher competition, and the evolution of general commerce (PDF).
Mackie-Mason summarizes his argument thus (my emphasis):
Changing the funding model from post-payment to pre-payment does not increase the costs of production journal publications, thus publishers will not have higher costs that they "need" to recover. And changing the funding model from post-payment to pre-payment does not increase publisher market power , so they will not be able to collect more money from research institutions than they already collect. In fact, the most likely outcome is that publishers will be forced to compete economically for article submissions, and this will lead to research institutions paying less to the publishing industry than it would in a continued world of post-payment (subscriptions).But this is actually a mis-statement. Mackie-Mason's model is that authors will be faced with a choice of journals with varying APCs and thus, lacking an infinite budget, the APC charge will be one among the factors driving their choice of where to submit papers. Note that the publisher does not appear in this model. It is likely that the submitting author is unaware of the corporate ownership of the journals among which a choice is being made. It is the attributes of the journal, such as its APC and bogus "Impact Factor", that drive the choice.
Mackie-Mason's model thus sets up a competition between journals, irrespective of their publisher. A journal that set its APC too high would lose out to a journal in the same publisher's stable that was better value, just as surely as to one in a competitor's stable. His model defuses the bundling that allows "big deals" to extract monopoly rent, and thus increases the downward pressure on the flow of funds from libraries to publishers. The economic decision is being made at an individual journal level; unlike the librarian, the geologist places no value on the economics journals that also form part of the publisher's bundle.
Now for the caveat. The publishers have already figured this out, and are pushing bundled APCs to librarians as a way to retain the ability to extract monopoly rents. As the Library Loon perceptively points out:
The key aspect of Elsevier’s business model that it will do its level best to retain in any acquisitions or service launches is the disconnect between service users and service purchasers.