JISC

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The aim of the study has been to provide evidence that will help the different constituencies involved in scholarly communication to understand better the dynamics of the transitions needed to improve access to research papers in a variety of ways; and the costs, benefits, opportunities and risks that this entails. Transition is understood to relate to changes in practice, business models and organisational culture within the relevant constituencies, and any new entrants, over the next 5 years.

Executive summary

We have sought to do this by defining and then comparing plausible but challenging scenarios that increase access to scholarly articles [1]. ‘Access’ is taken to mean that user groups are able to read, download and print a scholarly article without additional cash payment by them or their institution. The comparison and the associated modelling can best be described as a UK cost-benefit analysis, which builds on previous work by RIN, JISC and others. Those studies, however, have tended to focus on extreme states of the world and only what might be referred to as the steady state costs.

We do not claim in our modelling and analysis to have captured all the complexities of the scholarly communications system. Moreover, we must stress that what we present is essentially an exercise in comparison. We are more confident in the comparisons between the scenarios and the sensitivities associated with them than in the absolute values that result from our modelling. Nevertheless, we believe that our findings, and the conclusions we draw from them, are well-founded in those terms as a basis for further work and policy discussion.

Scenarios

The starting point for the study was to define, in consultation with stakeholders including funders, librarians and publishers, the scenarios to be compared. Table E1 summarises the scenarios that we have considered.

Table E1: Summary of the five scenarios

Modelling and analysis

For each scenario we have analysed the drivers and transition steps (the activities likely to be required for the scenario to be realised); modelled steady state and transition costs; quantified the changes in the access; and finally, estimated the wider economic benefits [3]. We have used this analysis to draw comparisons and make judgements about the relative cost-effectiveness of different approaches to increasing access, and to inform policy conclusions.

In making comparisons it is important to note that we have compared each of the scenarios to a 2015 baseline rather than 2010 in order to take account separately of anticipated system-wide changes between 2010 and 2015 that would affect all scenarios. In addition, for each scenario we have explored key sensitivities. For example, for the Green and Gold scenarios we have considered how sensitive our results are to relaxing the assumption that the UK and the rest of the world are moving in step in terms of the levels of deposit rates (Green) and author-side payments (Gold).

Throughout our analysis we refer to two measures of the change in access. The first is a standardised unit of access (SUoA) which is a common currency of access taking account of embargo period, version and functionality. The second measure seeks to adjust the standardised unit of access to take account of the potential for diminishing marginal returns to access (as users have access to more and more articles), and is referred to as ‘useful access’

Changes in access and cost to the UK

In what follows, we do not compare the results of the Transactional scenario with the other scenarios, because it is not directly comparable in terms of the access changes, costs and benefits that it considers. However, we note that, given its ‘targeted’ access, a Transactional route could be complementary to a licence extension in particular; and that, on the other hand, a significant increase in open access of either variety would reduce the potential market for PPV.

Changes in access

Figure E1 shows the estimated changes in the two measures of access in each of our scenarios. These changes reflect the assumptions that define the scenarios (in Table E1) as well as our modelling assumptions. With the exception of the NHS Licensing scenario, the changes in access are of a similar order of magnitude in each scenario.

Figure E1: Changes in SUoA and useful access compared to the 2015 baseline in each scenario

Cost to the UK

Each of the scenarios involves some element of upfront expenditure in order to support transition. Figure E2 shows the estimated ‘one-off’ transaction costs associated with the transition (Panel A) and ongoing annual costs [4] (Panel B) to the UK for each of the scenarios.

The level, composition and profile of ongoing annual net costs or savings vary significantly between the scenarios. They vary also in their distribution across user groups and institutions. These differences are discussed in more detail below.

Figure E2: Comparison of UK net annual costs

The one-off and ongoing costs associated with the Green scenario are relatively low compared with most of the other scenarios. This cost comparison may be misleading, however, since for Green it covers only the additional cost as compared to the 2015 Baseline, within which most of the costs of establishing repositories are sunk. If these sunk costs were to be included in the comparison, Green would become the most expensive scenario to the UK, with additional net annual costs and one-off costs both in excess of £10m.

The Delayed scenario imposes no ongoing costs, and has low one-off transaction costs, incurred by publishers.

The Gold scenario has the highest expected one-off transition costs, associated with: business case development by funders and academic institutions to meet author processing charges (APCs); development and adoption of central funds by academic institutions; development and communication of institutional payment models and mechanisms to process APCs; development of publisher billing systems to deal with APCs; and negotiations between publishers, institutions and consortia to establish publishing deals.

Gold is, however, the only scenario that could in principle reduce the net annual costs for the UK, and in particular, for UK universities. But it would do so only if the weighted average level of APCs was sufficiently low so that, in a steady state, the increased costs of paying them was outweighed by a fall in subscription payments (as increasing numbers of articles became available as gold OA). In particular:

• Higher-level APC if average APCs were set at a level equal to the estimated current global average cost per article (£2,634), UK universities’ annual cash costs would rise significantly, leading to a high net cost to the UK relative to the other scenarios (other than licensing)
• Lower-level APC if average APCs were set at about £1,457 (or $2,185 – the estimate by Outsell of the 2009 weighted average for actual APCs charged) [5] then UK universities would benefit from substantial annual net savings that we estimate at £2.8m (or £3.0m including non-cash savings) at the level of uptake we have modelled

There are significant uncertainties, however, about how Gold OA publishing – and the level of APCs - will evolve, and about the impact on traditional publishers’ business models. Moreover, there are likely to be significant challenges in transition (perhaps more so than in other scenarios) including both (i) the one-off costs to create the necessary systems and infrastructure; and (ii) the lags that mean that ongoing net costs could rise before later falling, because of the need to pay APCs while retaining existing subscription journals.

The ongoing costs associated with the Licence Extension scenario depend largely on the assumed licence premium. The one-off costs vary between the HEI and NHS licence scenarios, largely reflecting expected negotiation costs. But both the ongoing costs and one-off costs appear to fall somewhere between Green and Gold.

Cost-effectiveness and risk

Cost-effectiveness of increasing access

To compare cost-effectiveness between scenarios, Figure E3 shows the net cost to the UK per additional SUoA for each scenario. This cost-effectiveness measure is calculated by dividing total average annual net costs in a scenario by the absolute increase in SUoAs that are expected to result.

Figure E3: Comparison of the net cost to the UK per additional SUoA

With the exception of the NHS licensing scenario (which has a significantly higher increase in access) the relative position of the scenarios broadly reflects the differences in net costs shown in Figure E2. Points to note are as follows.

The cost per SUoA in the Green scenario depends on whether or not the costs of establishing repositories are taken into account. Ignoring these sunk costs suggests costs per SUoA which are broadly in the middle of the range of other scenarios. Taking account of the sunk costs would push the cost per unit of access towards the upper end of the range.

The Delayed scenario comes very close to being a cost-free route to increased access, in terms of both upfront and ongoing costs.

As discussed above, the cost effectiveness of the Gold scenario varies dramatically depending on the assumed level of the APC. There is thus a net saving (shown as a negative cost in the figure) to the UK on each additional SUoA if APCs are kept low, but a high net cost if they reflect our estimates of the current costs of publishing each article.

Finally, the cost per SUoA in the Licence Extension scenario for the NHS is low, although it provides an increase in access only to a particular population, unlike the Green, Delayed and Gold scenarios which provide open access. In contrast the Licence Extension scenario for HEIs appears to be a relatively expensive approach to increasing access.

Benefits and cost-effectiveness

The benefits that arise from each scenario reflect the increase in access provided to each user group – universities, Government, NHS, Corporations and SMEs. The changes in our two access measures were used to estimate a range for potential UK economy-wide benefits using the ‘Solow-Swan’ economic growth model. [6]

We have compared these estimates of benefits in each scenario with their respective costs in order to calculate benefit-cost ratios (BCRs). Figure E4 below summarises this analysis, which provides an indication of the potential economic case for each scenario, and an alternative metric to compare cost-effectiveness. Given the relationship between increased access and economic benefits, however, the relativities are similar to those described above in Figure E3; and for reasons explained in the report, we have greater confidence in the comparisons between scenarios than in the absolute values.

In the tinted bars on the chart, the lower bound reflects the benefit estimates that we get from using the measure of access that takes account of potential diminishing marginal returns (‘useful’ access); the upper bound reflects access without this adjustment (SUoA). The diamond denotes the mid-point of the range. The vertical lines represent the ranges covered by the sensitivity analyses that we have conducted, details of which are provided in the report

Figure E4: Benefit-cost ratios

The modelling confirms what one might intuitively expect, that the Green scenario would provide a cost-effective route to improving access, with relatively high BCRs attributed to our central case in which much of the costs are treated as sunk. These BCRs and the overall economic case are relatively robust to our sensitivity analysis (illustrated by the line). However, as discussed below, the Green scenario may carry a relatively higher risk than the other scenarios given its potential to undermine the business model on which it relies; and that risk is not captured in the sensitivity analysis.

The midpoint BCR for the higher APC Gold scenario is relatively low. However, with lower APCs the BCR midpoint is considerably hjgher. This demonstrates how the BCRs for the Gold scenario are probably the most sensitive to changes in key assumptions. This is particularly true of the assumption that the UK moves in line with the rest of the world in terms of take-up of Gold OA – which provides the lower end of the sensitivity range – and is less than 1 in the higher APC case. [7]

As with Gold, the cost-effectiveness of the Licence Extension scenario depends directly on the assumed licence premium that would be charged by publishers. At the assumed level of premium both HEI and NHS licence extensions have the potential to offer a net benefit to the economy, with the NHS licence extension appearing to have a marginally-better BCR.

Risks

The past five years have brought rapid change in the scholarly communications system as a whole: new technologies and services have brought changes in the roles, behaviours and attitudes of all the key groups of players in the system – universities, funders, libraries, publishers and researchers themselves. Rapid change brings all kinds of risks, and we cannot capture all of them in our modelling. We have, however, considered three groups of risks in relation to each scenario: potential impact on the overall funding or viability of the scholarly publishing system; risks to the transition process; and risks to achieving the calculated BCRs. Figure E5 provides a summary assessment of those risks. We must stress that this assessment reflects a judgement of the relative riskiness of the scenarios. It is not an assessment (quantified or otherwise) of absolute levels of risk. Key points to note are as follows.

The Green scenario involves a relatively high risk to the scholarly publishing system as a whole, since it could give rise to significant levels of subscription cancellations, rendering some journals and publishers unviable. However, the risks to the transition and BCR are not thought to be as great as for other scenarios

The Delayed scenario involves some risk of subscription cancellations, but less than Green since publishers have more control in this scenario. Costs are very low, so the transition and BCR risks are also lower than other scenarios.

The Gold scenario presents a relatively low risk to the scholarly publishing system as a whole, since it offers a viable alternative business model. There are, however, slightly greater risks with respect to the transition (for funders, academic research institutions and publishers) and relatively high risks associated with achieving the BCR.

Our judgement is that the Licensing extension scenario has higher risks related to transition, but relatively low risk in the other categories.

The Transactional scenario's greatest risk is to the system as a whole from the potential cannibalisation of subscriptions, but given publisher autonomy, our judgement is that risk is not as high as the Green scenario. Transition and BCR risks are both low.

Figure E5: Relative risks of scenarios

Policy implications

As a result of our modelling and analysis, we believe that the overall policy messages that arise for those seeking to increase access to research articles are as follows:

1. The Delayed scenario offers closest to a zero cost. But it depends on voluntary action by publishers, and it is not directly amenable to policy influence (unless it were really the case that publishers would adopt it as a potential defensive response to Green, something for which we see no evidence at present). Moreover, it would probably involve embargoes longer than funders such as the Wellcome Trust currently require; it could preclude aggregation of articles in subject repositories; and – as with the Green scenario – there are risks to the sustainability of the subscription model on which it relies. In our view, therefore, while there is no harm in policy-makers encouraging it as a low-cost and arguably lower-risk [8] way of expanding access, it is unlikely in practice to provide significant changes in access.
2. The Transactional scenario has some potential to address access gaps, and it could be complementary to the Licence extension scenario, or to the subscription model generally, provided it did not cannibalise subscriptions. It seems unlikely, however, that it would lead to a substantial increase in access overall. Moreover, it is not particularly amenable to policy intervention, and the demand for transactional access would presumably fall as open access expands.
3. All the scenarios that are directly amenable to policy intervention (Green, Gold, and Licence extension) are – based on our modelling – capable of achieving benefits to the UK that are greater than their costs. However, all have significant upfront costs of different kinds.
4. Of these options, our view is that the Licence extension option is the least attractive from a policy perspective. Although the level of the BCR depends significantly on the premium that publishers actually charge for increased access, the combination of significant upfront and on-going cash costs (in the HEI licence extension in particular) and the difficulties of transition (including the allocation of costs) make the option relatively unattractive. These arguments are strengthened in the current difficult fiscal environment.
5. Our judgement is that the two open access routes offer the greatest potential to policy-makers in promoting access. Both have positive, and potentially high, BCRs.
6. The Green scenario appears capable of providing increases in access comparable to or greater than other scenarios, and since the infrastructure for Green has largely already been built, increasing access by this route is especially cost-effective. These gains, however, come with increased risks to the scholarly publishing system in the form of potential subscription cancellations, and thus the risk that the scenario is not self-sustaining.
7. Of the two open access routes, our view is that the Gold route is preferable in the long-run, given (i) its underlying sustainability; (ii) the advantages of the author-side business model in terms of improved transparency and lower barriers to market entry, which point to improved economic efficiency; and (iii) (depending on the level of the APC) the potential to achieve both higher BCRs and lower net costs for the UK in general and for its universities in particular.
8. Set against those considerations, the scale of the costs and the benefits depends on the future level of APCs, which it may be hard for policy-makers to influence; and there are higher transition costs in the transition to Gold compared with Green.
9. Taking all these factors into account, our view is that the prudent stance for policy-makers seeking to promote access in the current environment is likely to be as follows:
   • to encourage the use of existing Green infrastructure (whose costs are largely sunk); but to be cautious about pushing for reductions in embargo periods to the point where the sustainability of the underlying publishing model is put at risk.
   • in parallel, to work to facilitate a transition to Gold OA (in specific disciplines first) provided that (i) the average level of APCs remain at or below £1,995; [9] (ii) the proportion of articles funded through APCs moves broadly in line with global rates; and (iii) mechanisms are in place to ensure that total payments from UK universities and their funders do not rise as a consequence of this transition.