Electronic Pricing Models

There are a number of models for pricing electronic resources. But all of them boil down to various ways of obtaining revenue to cover the same set of costs. They all ultimately depend on the same formula of first-copy costs plus print costs plus electronic costs. Table 18.2 shows humanities journal x.

Electronic Access Provided "Free" Publishers that are providing electronic access "free" with print subscriptions are, in fact, subsidizing the costs of the electronic edition out of the surplus revenues generated by the print publication; the print publication already covers the first-copy costs allocated to each subscription. For relatively high-priced scientific journals with high first-copy costs, this subsidization can be done without inflating the price too substantially; the uniquely electronic costs are then subsidized by all institutional subscribers and hidden as a percentage of the total cost of publication. Because the basic subscription price is high enough, relatively modest additional increases will also cover the cost of lost individual subscriptions (since individual subscriptions typically cover the run-on costs of producing additional issues but make only a partial contribution to first-copy costs). This approach has the added advantage of sidestepping for now the problems of negotiating prices and guarantees with libraries (and the associated

overhead costs). However, it does not contribute to developing commonly understood and agreed upon cost recovery models that will cover the costs of electronic scholarly communication in the long run.

Extra Charge for Electronic Access, Bundled with Paper An electronic edition that is provided with a print subscription for an extra charge is essentially the same as the previous cost recovery model, but the increase to cover electronic costs is made explicit. This approach may be especially necessary for journals whose base rate is low and whose markup for electronic costs cannot be covered by a typical inflationary increase. This model still has the advantage, for publishers, of spreading the cost over all institutional subscribers and of simplifying licensing negotiations.

Negotiated Price by Library Based on Paper Subscription Base Some publishers take the basic institutional print subscription base and guarantee this revenue for a period of years (typically three). Publishers are willing to guarantee limits to inflationary increases for this period in exchange for the guaranteed income and protection from cancellations to help cover transition costs. Again, this approach works better with higher priced journals for which the added costs of electronic publishing are a smaller proportion of the total cost.

Separate Price and Availability for Electronic and Paper, with an Incentive for Bundling Offering paper and electronic editions separately but with an incentive for bundling is the method deployed by SCAN and by Project MUSE. This model offers more flexibility to libraries, because libraries are allowed to cancel print and take only electronic or to select among the publications offered. Discount incen-

tives encourage maintaining paper and electronic subscriptions (a strategy used by both projects) and ordering larger groups of journals (the entire list for MUSE; discipline clusters for SCAN). The advantage to this approach is that the costs of electronic publishing are made clear. (See the revenues section below for a discussion of the adequacy of this model for supporting humanities publishing in the long run and of the impact of consortia discounts.)

In all these models, the ultimate economic effect in the transition period is the same: costs for libraries go up. Publishers must cover their first-copy costs; continue to provide paper editions for individuals, many libraries, and international markets; and generate revenue to cover the infrastructure and overhead costs of electronic innovation. For nonprofit publishers, at least, these costs must all be supported by the revenues from current journal subscriptions.