Letter to Elsevier

30 December 97

Mr. Nigel Stapleton, CEO, Reed Elsevier

Mr. Russell White, President, Elsevier Science Inc.

Dear Mr. Stapleton and Mr. White:

I am a mathematician (in particular a topologist) writing to you about scientific publishing (particularly in math, and more particularly about your journal Topology). During the past year I have been gathering information, thinking, and writing about the high cost of commercial math journals and alternative methods of publication. Let me explain my view of the future of math publishing and how it relates to Reed Elsevier.

The latest issue of Topology shows that it takes, on the average, about two years from the time a paper is submitted to the time it is published. This is typical in mathematics, and probably hasn't changed much in decades.

Thus, in order to disseminate their mathematics quicker and to establish priority, mathematicians send out preprints. Mathematicians want to receive preprints so as to keep up with the field without having to wait for the journal to appear years later. For these reasons the preprints are crucial to our profession. The journals are crucial because of their role in refereeing, vouching for the worth of a paper, and as an archive.

By now, almost all mathematicians produce TeX versions of their papers, and distribute an electronic preprint. This makes distribution easy, and it would be still easier if mathematicians were more willing to standardize their personal versions of TeX.

What I would like to see happen, and is beginning to happen, is the following: there would exist preprint servers in each subfield of mathematics (a subfield being 2 to 5% of math, defined in a natural way, for example mine would be low dimensional topology). Once an author has produced a suitable TeX version of a paper, s/he would send it to one or more preprint servers which would list the paper on-line for eternity. I could go to a server that interested me and ask for a specific paper, or all papers by a certain author, or all papers in a certain subject since a certain date, or all papers with certain code words; I might have a subscription which sends me an abstract each time a paper is listed.

Such a system has the following advantages: (1) assuming almost all mathematicians join this system, I have quick and efficient access to papers that interest me, which I can peruse on my computer screen and print if I wish (contrast this with waiting for publication and then hoping my library subscribes so that I can laboriously xerox page by page); (2) I can easily distribute my own papers to any interested reader (contrast this with duplicating a paper preprint, stuffing envelopes and addressing, and then missing part of my interested audience).

Such preprint servers already exist. One in high energy physics is working splendidly, run by Paul Ginsparg at Los Alamos National Lab. Some servers exist in math, and we are in the midst of organizing a more coherent system to cover all of math, done through Ginsparg's operation. I think we are off to a good start in "Geometric Topology" (see http://front.math.ucdavis.edu/ ).

These preprint servers are only meant to be a better way of maintaining the old preprint system. It is still vitally important, in my opinion, that we mathematicians retain our tradition of having papers refereed and accepted (or rejected) by journals of varying reputation. This should continue, and can also be done electronically. We have started an electronic journal, Geometry & Topology, based at the University of Warwick (see http://www.maths.warwick.ac.uk/gt/ ). It is free, at least in the foreseeable future. It is off to an excellent start with a large distinguished board of editors and standards at least that of Topology. We expect to offer a paper subscription at a very low price, determined by the cost of a commercial printer using our TeX files. Of course, there are the hidden subsidies to G&T by Warwick, such as supporting the computers that G&T uses and some time by the editors.

Where do the commercial publishers come into this picture? We mathematicians write and TeX our papers, we referee and edit for the journals, and we are well paid by our universities for these tasks. We then turn over the papers, with copyright, to the publishers who add relatively little value in producing the paper volume from our TeX files, and who then turn around and sell the journal to the university libraries at what is, in some cases at least, an exorbitant price.

Last spring, I collected some data on prices of journals which can be found at http://math.berkeley.edu/~kirby/journals.html in the appendices. The data is given in price per page and price per 10,000 characters. The latter is more accurate, but the former is easier to understand. Briefly, an efficient and cost conscious journal like the Pacific Journal of Math can be sold at about 13 cents/page. It is a non-profit company, with only minor subsidies from a few universities, and a 40+ year history of low costs and good mathematics.

Perhaps the three most prestigious math journals are the Annals of Math (Princeton Univ Press) published at 15 cents/page, the Journal of the American Math Society at 15 cents/page also, and Inventiones Mathematicae (Springer) at 110 cents/page.

Your journal Topology costs us 81 cents/page. Berkeley subscribes to 13 of your math journals, and the average cost is 73 cents/page, ranging from a high of 135 cents/page for Nonlinear Analysis to a low of 47 cents/page for Linear Algebra and its Applications. Wolters Kluwer averages 67 cents/page for 5 journals.

Springer averages 82 cents/page, Academic Press 40 cents/page, and Birkhauser 68 cents/page, for comparison. The non-profits are usually less.

So this brings me to the main point of this letter. I read in yesterday's New York Times about Reed Elsevier expanding dramatically and having high margins in its scientific publishing. Yet it looks to me as though you are on your way out in scientific publishing, at least in math. How can you stay in business offering a topology journal at 81 cents/page when you have competitors offering roughly the same product at under 20 cents/page? What's going on here?

I know part of the answer. There is a time lag. Your prices have been going up steeply in recent years. Mathematicians pay little attention to these things for we subscribe to few journals as individuals and in those cases get much lower prices if our libraries also subscribe. Our librarians have noticed the higher prices, but it has taken a while for them to get our attention. But many of us have woken up by now. (Furthermore, publishers added much more value in the old days of typesetters and galley proofs.)

But now that we are awake, we also notice the alternatives. In my field, we have a free electronic journal and are on the way to having a preprint server. By the time our library decides on which journals to subscribe to this summer, I expect that much (most?) topology will be on the preprint server, some good topology papers will have shifted away from Topology to lower cost journals, and I will be able to recommend to my library that they drop Topology (and I will, alas, drop my personal subscription). Perhaps this will be delayed a year. When Berkeley drops Topology, and editors, referees and authors begin to desert Topology, how long will it continue to exist?

An interesting issue here is copyright. I understand that, at the moment, you allow authors to list their paper on their web site, but do not allow (once the copyright form has been signed) authors to put their papers on preprint servers. I'm not surprised at this restriction, given what I wrote in the last paragraph. But why should authors give up the right to use a preprint server when it is obviously so much in their interest that everyone use preprint servers? You might win that battle if Topology were unique enough, but if you demand a restrictive copyright, authors are likely to go to your competitors.

So you see boom and I see bust. Your markets in other areas such as law may be in good shape; things vary widely between academic disciplines. But I think I know math pretty well, and I don't see much of a future for high cost commercial publishers.

But I would be sorry to see Topology disappear. It's an old friend. I published my thesis there in 1967. From my desk I see all the back issues, and know many papers therein. The editors at Oxford are friends and have worked hard from the beginning to make Topology a journal of stature. But all that sentiment can't overcome a price that's too large by a factor of 4.

It is presumptuous of me to tell you how to run your business, but here are a few possibilities anyway.

I'd guess that you could cut the price of Topology in half, and probably more, and still make a profit. After all, there are economies of scale and you have much experience and a tradition to help. American automobile manufacturers who thought they were pretty efficient in the 70's found they could double their efficiency when they ran into Japanese competition. Also, you apparently have high profit margins in scientific publishing which could come down some.

Announcing a price cut to 40 cents/page, with promised cuts in the future, would probably save Topology, at least for quite a while. But this doesn't seem too likely when I read about 3 to 5 year contracts with 9.5% increases locked in, and only some electronic enhancements to offer us (those electronic enhancements look modest compared to what we are doing ourselves with preprint servers and electronic journals that are free).

Best for us would be for you to simply give the journal Topology to its editors in Oxford, to run as a non-profit as the Pacific Journal is. All you'd get is some good will from topologists.

I think that proceeding as you are will just run journals like Topology into the ground. There may be profits there for another few years. But then all that remains is ill will from some academics who didn't want a favorite journal to die.

I'd also encourage you to talk to us. We mathematicians produce the math for your journals, and we urge (so far) our libraries to buy your journals. Of course it is costly in time to talk to us. I will circulate this letter to other mathematicians, and will be happy to circulate your reply in the same way. That is one way to reach us.

Yours,

Rob Kirby



Here is the NY Times article which inspired my letter to Elsevier

New York Times, 29 December, 1997, page C2

Concerns About an Aggressive Publishing Giant
By Kenneth N. Gilpin

It must have been an extraordinary scene: on Dec. 1, the president of an important subsidiary of the world's biggest publisher of academic and trade journals, the purveyor of what it likes to call "must have" information, was politely but firmly told by an important client that "must have" had become "can't afford," and "don't need".

Russell White, president of Elsevier Science Inc., a division of Reed Elsevier P.L.C., the British-Dutch giant, told a group of professors from Purdue University that the prices of the 350 on-line publications that now supplement the company's entire list of 1,200 scientific and technical journals could be locked in for three years at an annual increase of 9.5 percent.

What he heard in response could not have pleased him.

Purdue was unwilling and fiscally incapable of absorbing anything close to that sort of rate rise, the professors told him. Moreover, they said, the quality of what they were getting was not worth the money.

Even before Mr. White's visit, Purdue, which spends more than $1 million a year on Reed Elsevier journals, had canceled 88 of the 803 titles it once received. Among those axed: Brain Research (an annual subscription costs $14,919), Mutation Research ($7,378) and Tetrahedron With Tetrahedron: Asymmetry ($8,506).

"Reed Elsevier journals tend to be second- and third-tier publications, which range from the acceptable to the terrible," said G. Marc Loudon, a professor of medicinal chemistry at Purdue who attended the meeting. "None are in the top tier in chemistry, biology and biochemistry, the fields I read in. If we lose Elsevier journals in those fields we will be O.K.

"Why do we want to buy garbage at a 9.5 percent price increase?" he asked.

The decision by Purdue's faculty to draw a line in the sand over the on-line journals may be an aberration, a reflection of a longstanding irritation in the academic world--and particularly among research librarians--with a company that they feel treats them as a captive audience and charges all the market will bear.

But the academic world is not the only place where there is mounting concern about Reed Elsevier, which has embarked on an ambitious expansion program. Much of the worry stems from the announcement in mid-October that Reed Elsevier would merge with Wolters Kluwer N.V., a rival Dutch publisher which Reed had once made an unsuccessful hostile effort to acquire.

The combination, which is being reviewed by both European and American regulators and may face similar scrutiny in New Zealand and Australia, would create the world's largest publisher of professional and trade journals, with estimated combined 1997 revenues of $8 billion and a stock market capitalization of $30 billion.

Reed Elsevier's aggressiveness has certainly bred some resentment. The meeting at Purdue was, if not a turning point, at least a singular moment in the global publisher's relationship with one of its core markets.

It is common to have academics, particularly those involved in scientific and medical research, vie to have their work published in journals like those owned by Reed Science. For the professors, the aim is to enhance knowledge in their fields and further their own careers in a universe where "publish or perish" has been a maxim for most of this century. The competition is so great that Reed demands, and gets, copyrights to the articles from the authors, and in most cases pays them nothing.

"There are those of us who would sell our souls," said James Perley, a biology professor at the College of Wooster in Ohio and the president of the American Association of University Professors. "Oftentimes, publication in prestigious publications wins tenure, because organizations like universities like prestige." And professors published in those journals want to be sure the journals are in the university library.

"We have some outstanding brand names with some really good articles of interest to scientists and researchers throughout th world," Mr. White of Reed Elsevier said.

The proof of his claim would seem to be in the company's tract record with this market: universities and research libraries, which buy about 95 percent of Reed's science journals, have been accepting price increases on subscriptions that have average in the double-digit range for years. And renewal rates for those subscriptions run at a rate well above 90 percent.

Indeed, Purdue may prove a mere crack in what remains very strong demand from the professionals--lawyers, accountants, doctors, scientists, academics--that consume the information Reed Elsevier provides.

And the merger news is only the latest sign of the company's confidence in its strategy for growth: It furthers a consolidation move in the publishing and information service business, a wave that Reed Elsevier has been aggressively riding, particularly in the United States, where demand for the sort of information it sells is strongest.

In June, the company spent $447 million to buy the Chilton Company from the Walt Disney Company. Reed plans to fold Chilton's 39 trade magazines into its existing trade magazine group, the Cahner's Publishing Company, to build a library of 130 journals worldwide.

Earlier, it struck a deal to acquire MDL Information Systems Inc., a California company that sells data bases and software to scientists in the pharmaceutical and chemical fields. Last year it agreed with the Times Mirror Company to form a joint venture to buy Shephards's, the legal publisher, from McGraw-Hill Inc.

Neither Reed nor Wolters Kluwer have slowed down since their merger was announced.

On Dec. 8, the Thomson Corporation, a major competitor of Reed Elsevier, said it had agreed to sell its Thomson Science subsidiary, which publishes books and journals, to Wolters Kluwer. Terms were not disclosed.

Days after that deal was announced, Elsevier Science said it had agreed to acquire Beilstein Informationssystem G.M.B.H., a chemical data base and handbook, from the non-profit Beilstein Institute. The product will be marketed, sold, and supported by MDL Information Systems.

Nigel Stapleton, co-chief executive of Reed Elsevier and one of three executives who will run the combined company, to be called Elsevier Wolters Kluwer N.V., if the merger is approved, has no intention of stopping. "There is a lot left to buy," he said in an interview shortly after the merger was announced, "particularly if you subscribe to the view that in a technology environment scale is more important than it ever has been."

"Clearly, in the electronic world you need to make bigger bets than in the hard-copy world, because the costs are higher and the market-place is global. Also, when you are investing in new technology, the success rate is by no means as sure as when you are increasing the distribution reach of the hard-copy type."

That view pleases securities analysts, who say that what Reed is doing makes economic sense. But it greatly disturbs some of the company's customers, who say consolidation is stifling competition and driving up prices.

"Journals can raise prices faster than we can raise money to pay for them," lamented David Shulenburger, provost of the University of Kansas. "Reed's merger with Wolters Kluwer makes this worse, because there will be fewer non-Reed outlets."

Mr. Stapleton is a bit more pragmatic. The world of publishing, be it hard copy or electronic, is no longer for the small, he said.

"I think the Thorne family, which owned CCH before they sold it to Wolters Kluwer, and the Oppermans, which sold West Publishing to Thomson, decided that the landscape was changing, and being part of a bigger business was important," he said. "When you are squaring up against the Microsofts, AT&T's and MCI's of the world, scale becomes more important."

If its merger with Wolters Kluwer is approved, Reed's position in scientific publishing, its highest-margin business, will be somewhat enhanced. According to analysts, among commercial publishers Reed currently has about 15 percent of the market, Wolters-Kluwer about 3 percent. Still, the combination will far outdistance the next biggest player, Blackwell, which has about 4 percent of the market. (Not-for-profit scientific societies, which used to dominate the field and charge fairly high subscription rates themselves, continue to be important publishers of science journals).

While Wolters Kluwer's science assets were an attraction, the real key to the merger seems to be CCH, the venerable, family-owned business law and tax publisher that Wolters Kluwer bought in 1995 for $1.9 billion in cash.

Reed owns Lexis/Nexis, which along with its rival West Publishing, a division of Thomson, is a leading deliverer of legal information. Until now, however, Reed has owned very little of the the content it provides. With CCH, that will change.

"All the mega-mergers have been driven by content and distribution," said one securities analyst in London, who insisted on not being identified. "Reed is strong in delivery. And CCH is very rich in legal content."

Given the size and sprawl of the merged company, analysts and anti-trust lawyers said it was likely that regulators in either Brussels or Washington, or perhaps both, may require some divestitures before signing off on the deal.