Demand and Supply

In order to understand how journals might evolve, it is helpful to start with an understanding of the demand and supply for scholarly communication today.

Supply of Scholarly Communication

The academic reward system is structured to encourage the production of ideas. It does this by rewarding the production and dissemination of "good" ideas- ideas that are widely read and acknowledged.

Scholarly publications are produced by researchers as part of their jobs. At

most universities and research organizations, publication counts significantly toward salary and job security (e.g., tenure). All publications are not created equally: competition for space in top-ranked journals is intense.

The demand for space in those journals is intense because they are highly visible and widely read. Publication in a topflight journal is an important measure of visibility. In some fields, citation data have become an important observable proxy for "impact." Citations are a way of proving that the articles that you publish are, in fact, read.

Demand for Scholarly Communication

Scholarly communication also serves as an input to academic research. It is important to know what other researchers in your area are doing so as to improve your own work and to avoid duplicating their work. Hence, scholars generally want access to a broad range of academic journals.

The ability of universities to attract topflight researchers depends on the size of the library collection. Threats to cancel journal subscriptions are met with cries of outrage by faculty.

The Production of Academic Journals

Tenopir and King [1996] have provided a comprehensive overview of the economics of journal production. According to their estimates, the first-copy costs of an academic article are between $2,000 and $4,000. The bulk of these costs are labor costs, mostly clerical costs for managing the submission, review, editing, typesetting, and setup.

The marginal cost of printing and mailing an issue of a journal is on the order of $6. A special-purpose, nontechnical academic journal that publishes four issues per year with 10 articles each issue would have fixed costs of about $120,000. The variable costs of printing and mailing would be about $24 per year. Such a journal might have a subscriber list of about 600, which leads to a break-even price of $224.^[1]

Of course, many journals of this size are sold by for-profit firms and the actual prices may be much higher: subscription prices of $600 per year or more are not uncommon for journals of this nature.

If the variable costs of printing and shipping were eliminated, the break-even price would fall to $200. This simple calculation illustrates the following point: fixed costs dominate the production of academic journals; reduction in printing and distribution costs because of electronic distribution will have negligible effect on break-even prices.

Of course, if many new journals are produced and distributed electronically, the resulting competition may chip away at the $600 monopoly prices. But if these new journals use the same manuscript-handling processes, the $200 cost per subscription will remain the effective floor to journal prices.