Open@VT

University of California v. Elsevier: Why It Matters to Virginia

by Peter Potter, posted on March 21, 2019

Note: This is the first in a series of Open@VT blogposts that will appear over the ensuing months focusing on Virginia Tech’s “Big Deal” contracts with commercial journal publishers. As the University Libraries’ contracts with Elsevier, Springer, and Wiley come up for renewal in 2-3 years, we will have to decide whether to renew or cancel these contracts. We look forward to engaging the VT community in a conversation about the best path forward.

On February 28 the University of California announced that it was terminating all of its journal subscriptions with the scholarly publishing giant Elsevier. The news sent shock waves throughout the world of higher education—not just in America but globally. Why? Because Elsevier is the world’s largest publisher of scientific research and the University of California (UC), with its ten-campus system, is one of its largest customers. The impact on Elsevier was immediate: its parent company, RELX, saw its stock drop nearly 7 percent in the aftermath of the UC announcement—and its value still has not yet recovered.

In Virginia we are paying special attention to the situation because our own research universities, including Virginia Tech, have a similar journal subscription agreement with Elsevier that is set to expire in two short years. Millions of dollars are at stake in Virginia. Globally it is in the billions.

What’s the Problem?

At the heart of UC’s dispute with Elsevier is what is known as the “big deal.” A big deal is a contract between an institution (often a university library but sometimes a business or government) and a publisher to purchase access to a large bundle of the publisher’s journals. Think of cable TV bundles in which customers get hundreds of channels at a lower per-channel rate. Many of the channels, however, go unwatched, all while customers’ bills continue to rise. The same is true with big deals. Elsevier publishes more than 2,500 journals. Many are invaluable to their fields and frequently used and cited. Many, however, are used infrequently, and yet libraries still have to buy them as part of the bundle. All the while, the price of the bundle goes up and up. Over the last thirty years library journal budgets have risen by a staggering 500 percent (see chart), which inevitably leads to cuts in other areas of library budgets. UC was paying Elsevier more than $10 million per year for its big deal. Altogether, the publisher’s revenue in 2018 surpassed $3 billion and its profits exceeded $1 billion, resulting in a gaudy profit margin of 37 percent.

Universities are understandably tired of big deals. Not only have big deals meant runaway prices, they also perpetuate an outdated business model from a time when subscriptions were an efficient way to pay for the cost of printing and distributing journals. Today subscriptions are inefficient for the simple reason that journals can be published online for immediate access. Publishers like Elsevier, however, have an interest in keeping the old system alive. This is why they continue to invest in expensive publishing platforms that restrict access to only the wealthiest institutions. There must be a better way.

The solution proposed by the University of California is to do away with the big deal concept and replace it with what is known as a “read and publish” agreement. A read and publish agreement (RAP) is a single integrated contract that enables a library to pay a one-time, up-front charge for the right to read all of a publisher’s content and to publish in any of that publisher’s journals under an open access model. The first RAP agreement in North America was announced last year, between the MIT Libraries and the Royal Society of Chemistry. Ultimately, the goal of RAP agreements is to transition scholarly publishing to a universal access model.

Momentum Is Building

UC is by no means the first university to stand up to Elsevier, but UC has special clout because of the sheer size and research output of its ten-campus system, which accounts for nearly 10 percent of the nation’s research publications. Meanwhile, governments and national research funders are increasingly demanding open access to their researchers’ articles, even imposing concrete deadlines. Sweden’s government is calling for OA by 2026. Norway’s goal is 2024. The initiative known as Plan S is even more ambitious. Originating in Europe, Plan S calls for all publicly funded research to be published in open access journals by 2020. The Bill and Melinda Gates Foundation was the first North American foundation to sign on to Plan S.

As more universities and governments push for open access, the more it seems that Elsevier is destined to lose this battle. But this does not mean that it will lose the war. Elsevier is shrewd enough to adapt to (and even shape) whatever new business model emerges around open access publishing. Perhaps anticipating this change in business model, Elsevier has skillfully and steadily turned itself into one of the world’s largest publishers of open access as well as toll-access journals. It has also been diversifying its business portfolio to the point that it no longer even refers to itself as a publisher but as a “global information analytics business.” In other words, Elsevier is not going away anytime soon.

Implications for Virginia

Virginia will soon be in UC’s shoes. In 2004 seven Virginia research universities including Virginia Tech negotiated a big deal agreement with Elsevier. (The other schools are George Mason University, James Madison University, Old Dominion University, University of Virginia, Virginia Commonwealth University, and College of William and Mary.) The number of journals in that big deal was 1,800 and the total cost to the seven universities was $27 million over five years. The license has been renegotiated several times since then, and we are now in the third year of a five-year contract covering 2,278 journals at a total cost of $46 million. This contract will expire at the end of 2021.

Not surprisingly, these universities are already looking ahead to 2021 and considering the possibility of walking away from Elsevier big deal as UC has done. (See, for instance, the University of Virginia.)

Here at Virginia Tech, the University Libraries, under Tyler Walters’s leadership, will be engaging the campus community in an ongoing conversation about how Virginia Tech can confront this scholarly publishing crisis. On this, we sincerely want your feedback. Please watch for Library-sponsored events that provide a forum for discussion. In the meantime, feel free to reach out to our librarians and engage them in conversations. Or let us know what you think by replying to this blog post or to future Open@VT blog posts. You can also find up-to-date information at the Library’s Open Access-Open Knowledge website.