0.7 Subscription options and pricing  (Page 5/10)

Maintaining a history of a journal’s pricing over time allows a society to compare the rate of the journal’s price increases against comparable journals in the same field. The table below illustrates a price comparison for a hypothetical art history journal. In the example, the journal’s price has been increasing at a slightly faster rate than the average for all history journals, and has an institutional subscription price 20% higher than average. In this case, the society might forgo a price increase, recognizing that pricing the online-only format option on par with print can increase net revenue resulting from institutional libraries’ growing preference for online-only access.

Sample Art History Journal Price Comparison

In some instances, it will also be useful to compare a journal’s pricing against that for the most directly comparable titles (in terms of editorial scope, audience, reputation, and publication frequency).

Another useful resource for determining a journal’s price and value relative to comparable journals is the “Journal Cost-Effectiveness” database developed by Ted Bergstrom and Preston McAfee, economists at the University of California at Santa Barbara and Caltech, respectively. See (External Link) . The database’s Relative Cost Index is a journal’s “Composite Price Index” (the geometric mean of the price per article and the price per citation) divided by the median CPI of nonprofit journals in a specific subject category. The calculation methodology is explained at (External Link) . The database uses cost-per-article and cost-per-citation data to indicate a journal’s value relative to others in its field.

As a general rule, institutional libraries prefer routine, predictable increases over large, discontinuous price jumps. A society that has increased its pricing erratically—for example, years of no increases punctuated by single-year increases of 20% or more—may want to increase its journal prices in modes, annual increments rather than in larger periodic adjustments.

Tiered pricing models

The pricing by distribution format (print, online, both), described above, assumes that all institution types pay the same subscription rate. However, society publishers also have the option of employing differential pricing. Institutional libraries have long acquiesced in differential pricing of subscriptions, recognizing that journals housed in libraries receive more intensive use than individual subscriptions. Indeed, differential pricing of print subscriptions may be considered the historical precedent to online site licenses.

There are two basic approaches to journal pricing: cost-plus and value-based. Cost-plus pricing bases a journal’s price on a society’s costs of producing it, plus a margin sufficient to sustain the journal’s operation. Societies often apply this approach to print journals. Value-based pricing tries to determine the price that institutions would be willing and able to pay. Establishing a price for an online edition in this way can allow a society to tap the value created by the online version and increase the revenue available to sustain the service going forward.