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Roger Clarke's 'A Cost-Profile of Journal-Publishing'

A Cost-Profile of Journal-Publishing
Appendix 7: For-Profit Publisher, applying the Open Access Approach

Version of 24 March 2006

This document is an Appendix to 'A Cost-Profile of Journal-Publishing'

© Xamax Consultancy Pty Ltd, 2005-06

Available under an AEShareNet Free
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This document is at http://www.rogerclarke.com/EC/JP-CP-FPOA.html


Category Description

This Appendix presents an indicative cost-profile for a particular kind of journal-publisher.

The organisational category addressed here is an organisation that publishes multiple journals, for profit, applying the 'author-pays OA' approach. This involves authors of published articles paying a levy, with the article then being made openly available on the Web. The publisher may be a corporation, or a business unit of an Association which has an obligation to generate a surplus.

The publisher is assumed to have many journals. It has substantial investment in brand-image, and a strong competitive stance.

Both hard-copy and electronic publishing are encompassed. The total costs for an eJournal are relatively predictable because they are dependent primarily on the number of articles published, which is controllable. Costs for production and distribution of hard-copy Issues, on the other hand, are dependent on the number of subscribers (or at least on the number that request hard-copy). Unless the publisher imposes a fee for the hard-copy service, the fee charged to authors has to be based on an estimate of the likely count of hard-copies required.

Another difference is that the publisher's revenue varies directly with published articles, not subscriber-count; and the longstanding cost-constraint on publishing too many papers disappears. Publishers therefore have an incentive to publish more papers. There will inevitably be pressure on editorial teams to expedite reviews and approvals; but this only generates more papers for as long as there is an exploitable backlog. It is therefore also inevitable that there will be pressure on editorial teams to adjust standards downwards.

(Another possible result is the provision of additional support to marginal authors in order to nudge their papers over the line. This is moderately expensive in the case of copy-editing, but much more difficult when the problems are substantive in nature. The prospect arises of reviewers becoming secondary authors, and needing to be recognised as such).

To enable the computation of per-article estimates that are reasonably comparable with those for other categories, each journal is assumed to comprise quarterly Issues, each with 7-8 articles, for a total of 30 articles p.a.


Costs

Establishment Costs

1

Conception and articulation of the journal's name, scope, philosophy and modus operandi

Undertaken by senior academics, but with greater involvement from senior executives, and an orientation more strongly towards saleability than service

4 executive-weeks – $20,000

2Preliminary negotiations within the intellectual communityUndertaken by senior academics, but influenced by saleability as well as service
3Preliminary negotiations with potential providers of operational resourcesUndertaken by senior academics, but with a commitment to in-house performance or controlled outsourcing by the publisher
4Preliminary negotiations with potential providers of infrastructureUndertaken by senior academics, but with a commitment to in-house performance or controlled outsourcing by the publisher
5Acquisition of investment and working capitalUndertaken by either senior academics or senior executives, but with a commitment to in-house performance or controlled outsourcing by the publisher
6Appointment of Board, Editor and Editorial Committee(s)Undertaken by senior academics
7Accumulation of Referees ListUndertaken by senior academics
8Acquisition of infrastructure

Undertaken by senior executives, and with a commitment to the publisher's infrastructure, and with the Web-site run using sophisticated and expensive tools

Allocated share of infrastructure worth millions – say $50,000

9Acquisition of operational resources

Undertaken by senior executives, and with a commitment to the publisher's infrastructure, and with the Web-site run using sophisticated and expensive tools

1-2 staff weeks – say $5,000

10Acquisition of intellectual property (logos, trademarks, copyrights, licences)Undertaken by senior executives, with emphasis on branding and content-protection as well as service.

2-4 staff-weeks – say $10,000

11Preparation of formal components of the printed journal and web-siteUndertaken by senior executives and staff.

1-2 staff-weeks – say $5,000

12Preparation of web-siteSupervised by senior executives, and undertaken by staff, but with emphasis on branding and content-protection as well as service.

1-2 staff-weeks – say $5,000

13Announcement to the communityUndertaken by senior academics, and marketed by senior executives and staff.

1-2 staff-weeks – say $5,000

14Issue of initial calls for papersUndertaken by senior academics

Operations Costs

• Submission-Related

1

Receipt, acknowledgement and management Editor, Editorial Committee and Referees, supported by a paid assistant, and possibly also by junior academics or students

$10,000 p.a., equivalent to $2,500 per Issue or $330 per article

2Conduct and management of the assessment process

Editor, Editorial Committee and Referees, generally gratis, but possibly with an honorarium for the Editor, and possibly allowances, free advertising or similar partial recompense

$5,000 p.a., equivalent to $1,250 per Issue or $170 per article

• Article-Related

1

Production-editingBy the publisher's professional staff or contractors, requiring 0.1 EFT p.a.

$10,000 p.a., equivalent to $2,500 per Issue or $330 per article

2CataloguingBy the publisher's professional staff or contractors, but included in the time for Production-editing, immediately above

• Issue-Related

1

EditorialEffort by the Editor
2Production-editingBy the publisher's professional staff or contractors.

$1,000 per issue, equivalent to $4,000 p.a. or $130 per article

3Production

For hard-copy issues, by an outsourced service provider.

Assuming 1,000 copies per Issue and $5.00 per tome, then $20,000 p.a., equivalent to $5,000 per Issue or $670 per article

For the Web-site, by the publisher's professional staff or contractors

$5,000 p.a., equivalent to $1,250 per Issue or $170 per article

4ProtectionIncluded in the Production costs, immediately above
5DistributionFor hard-copy issues, by an outsourced service provider

Assuming 1,000 copies per Issue, then $5,000 p.a., equivalent to $1,250 per Issue or $170 per article

• Generic

1

MarketingSubstantial, undertaken primarily by the publisher's staff

$10,000 p.a., equivalent to $2,500 per Issue or $310 per article

2Customer relationship managementSubstantial, undertaken by the publisher's staff. In the case of an eJournal, the publisher could choose to dispense with this facility, or reduce costs by enabling individuals to maintain their own records. On the other hand, the publisher may manage customers across their whole product-portfolio.

$10,000 p.a., equivalent to $2,500 per Issue or $310 per article

3Archive managementUndertaken by the publisher's staff

$5,000 p.a., equivalent to $1,250 per Issue or $150 per article

4IndexingUndertaken by the publisher's staff

$5,000 p.a., equivalent to $1,250 per Issue or $150 per article

5GovernanceUndertaken by the Editor and Editorial Committee, with some limited support from publisher executives and staff

Infrastructure-Maintenance Costs

1

Editor and Editorial Committee(s)Undertaken by senior academics
2A pool of refereesUndertaken by senior academics
3Communications channelsArranged by senior academics, supported by junior academics or students
4Norms for communications and formattingUndertaken by senior academics
5Production facilitiesUndertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure
6Subscription-list facilitiesUndertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure
7Distribution mechanismsUndertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure

Financial Costs

1

Interest on investment capital

$100,000 Establishment Costs, at a rate of 5% basic plus a risk factor of 10%

$15,000 p.a., equivalent to $3,750 per Issue or $500 per article

2Interest on working capital1/6th of annual turnover of $124,000, at a rate of 5% basic plus a risk factor of 10%.

$3,000 p.a., equivalent to $750 per Issue or $100 per article

TOTAL COSTS

Establishment$100,000, amortised over 5 years = $20,000 p.a., equivalent to $5,000 per Issue or $670 per article.
Operations – Submission-Related$15,000 p.a., equivalent to $3,750 per Issue or $500 per article

Operations – Article-Related$10,000 p.a., equivalent to $2,500 per Issue or $330 per article
Operations – Issue-Related$34,000 p.a., equivalent to $8,500 per Issue or $1,130 per article
Operations – Generic$30,000 p.a., equivalent to $7,500 per Issue or $1,000 per article
Infrastructure MaintenanceCovered in the Establishment Cost calculation
Financial$18,000 p.a., equivalent to $4,500 per Issue or $600 per article
TOTAL

$127,000 p.a., $31,750 per Issue or $4,200 per article

For an eJournal only, $102,000 p.a., $25,500 per Issue or $3,400 per article


Business Model

With an author-based revenue model, the publisher is dependent upon approving sufficient papers and receiving payment with the final submission.

The breakeven point for a 30-paper p.a. journal is $4,200 per article if a hard-copy version is provided to all subscribers without a print-version fee. Alternatively, if subscribers paid an additional fee sufficient to cover production and distribution, say $70 p.a., then the author levy would be the same as for an eJournal.

For an eJournal only, the author levy would need to be $3,400.



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Created: 31 March 2005 - Last Amended: 24 March 2006 by Roger Clarke - Site Last Verified: 15 February 2009
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