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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 
licence or a Creative
Commons 
licence.
This document is at http://www.rogerclarke.com/EC/JP-CP-FPOA.html
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.
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 |
| 2 | Preliminary negotiations within the intellectual community | Undertaken by senior academics, but influenced by saleability as well as service |
| 3 | Preliminary negotiations with potential providers of operational resources | Undertaken by senior academics, but with a commitment to in-house performance or controlled outsourcing by the publisher |
| 4 | Preliminary negotiations with potential providers of infrastructure | Undertaken by senior academics, but with a commitment to in-house performance or controlled outsourcing by the publisher |
| 5 | Acquisition of investment and working capital | Undertaken by either senior academics or senior executives, but with a commitment to in-house performance or controlled outsourcing by the publisher |
| 6 | Appointment of Board, Editor and Editorial Committee(s) | Undertaken by senior academics |
| 7 | Accumulation of Referees List | Undertaken by senior academics |
| 8 | Acquisition 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 |
| 9 | Acquisition 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 |
| 10 | Acquisition 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 |
| 11 | Preparation of formal components of the printed journal and web-site | Undertaken by senior executives and staff. 1-2 staff-weeks – say $5,000 |
| 12 | Preparation of web-site | Supervised 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 |
| 13 | Announcement to the community | Undertaken by senior academics, and marketed by senior executives and
staff. 1-2 staff-weeks – say $5,000 |
| 14 | Issue of initial calls for papers | Undertaken by senior academics |
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 |
| 2 | Conduct 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 |
1 | Production-editing | By 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 |
| 2 | Cataloguing | By the publisher's professional staff or contractors, but included in the time for Production-editing, immediately above |
1 | Editorial | Effort by the Editor |
| 2 | Production-editing | By the publisher's professional staff or contractors. $1,000 per issue, equivalent to $4,000 p.a. or $130 per article |
| 3 | Production | 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 |
| 4 | Protection | Included in the Production costs, immediately above |
| 5 | Distribution | For 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 |
1 | Marketing | Substantial, undertaken primarily by the publisher's
staff $10,000 p.a., equivalent to $2,500 per Issue or $310 per article |
| 2 | Customer relationship management | Substantial, 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 |
| 3 | Archive management | Undertaken by the publisher's staff $5,000 p.a., equivalent to $1,250 per Issue or $150 per article |
| 4 | Indexing | Undertaken by the publisher's staff $5,000 p.a., equivalent to $1,250 per Issue or $150 per article |
| 5 | Governance | Undertaken by the Editor and Editorial Committee, with some limited support from publisher executives and staff |
1 | Editor and Editorial Committee(s) | Undertaken by senior academics |
| 2 | A pool of referees | Undertaken by senior academics |
| 3 | Communications channels | Arranged by senior academics, supported by junior academics or students |
| 4 | Norms for communications and formatting | Undertaken by senior academics |
| 5 | Production facilities | Undertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure | 6 | Subscription-list facilities | Undertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure |
| 7 | Distribution mechanisms | Undertaken by the publisher's senior executives and staff. Covered by treating the amortised establishment costs as an ongoing annual figure |
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 |
| 2 | Interest on working capital | 1/6th 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 |
| 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 Maintenance | Covered 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 |
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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