1. Publishers panel - Rocky Mountain SLA - November 21st 2002 Miriam Gilbert Liz Haigh Rolf Janke Mary Waltham

2. www.MaryWaltham.com Why do publications cost so much? Where does the money go? Where does the money come from? What are the challenges?

3. www.MaryWaltham.com The doors of wisdom are never shut Ben Franklin

4. Costs - some typical cost ratios

5. www.MaryWaltham.com Costs - fixed and variable Fixed costs - Content creation ~ editorial office costs, reviewing ($160 /article), editing ($320/article), SGML, HTML,XML etc Publishing support ~ marketing (3-5% of revenues), ad sales, finance and administration Variable costs- Manufacturing Distribution - print and online Order fulfillment - print and online

6. www.MaryWaltham.com First copy and other fixed costs Content creation costs incurred whether product is print or online or both Publishing support costs incurred whether product is print or online or both New additional costs are incurred as/when print and online become distinct

7. Does publisher size matter? (Source:ALPSP Benchmarking study Sept. 2002 First copy cost in s )

8. www.MaryWaltham.com Additional costs of online publication Copy-editing ~ additional 5%/article Typesetting ~ additional 10-20%/article Subscription management ~ additional 10- 15%/article Online hosting - varies widely ~$25 - $96+/article/year

9. www.MaryWaltham.com Other significant cost lines Archiving ~ digitization of content from paper archives $84.46/article (Classic articles in Neurosurgery) $0.27 cents/page for 2.3 million pages (Making of America IV) Typically in the $10/article range Reference linking ~ 0.25 cents per reference say $6.00 per article in the backfile

10. www.MaryWaltham.com Out of intense complexities intense simplicities emerge Winston Churchill

11. www.MaryWaltham.com Where does the money come from? Business models Print only - almost extinct! Print and online Online only Aggregations Free

12. www.MaryWaltham.com Where does the money come from? Currently three major online revenue lines ~ the price of each has an impact on the others Individual articles Personal/member subscriptions Site licenses and institutional subscriptions

13. www.MaryWaltham.com Where does the money come from? Additional revenue Author fees/charges Licensing/rights Reprints Advertising e-commerce

14. www.MaryWaltham.com Not all publishers are created equal Commercial publishers ~ whether public or private (in general) must do more than break even - shareholder pressure Not-for-profit publishers~ same as above, publications often fund significant other society activities - member pressure or other scholarly publications for University presses Note: Tax base quite different

15. www.MaryWaltham.com Not all publishers are created equal In general commercial publishers launch more new products than not-for-profits, examples include product twigging and also new product lines New product launches ~ in general do not expect to break-even for five years sometimes seven to ten e.g.a major reference work Investment pay-back ~ 8 + years

16. www.MaryWaltham.com Not all publishers are created equal Most publishers aim to do for their customers what they cannot do for them selves Peer review Quality control Efficient, effective and timely distribution Aggregation of online information thus common online interfaces Create and build new online products ~ opportunities to support users are vast

17. www.MaryWaltham.com Mergers and acquisitions Scholarly publishing market considered a target buy Note: Kluwer Academic Publishers sold for Euro 600 million which is 4 times annual sales, and an estimated 13 times operating profits More to come …what will be the outcome for the library market?