Business models and financial terms
The nature of the financial terms for these publishing services will depend on the type of publishing services provider (for example, commercial publisher, university press, or other nonprofit service) and the type of business model selected. The appeal of a particular business model will depend on the society’s willingness to share financial risk.
The three financial models described below represent common types of arrangements, although many variations occur in practice:
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Fee-for-service. The society pays the partner for the publishing services provided (including, potentially, editorial services; print and online production and hosting; and marketing, sales, and fulfillment). In such arrangements, the society bears the risk and retains any surplus the journal might generate. Fee-for-service arrangements are available from nonprofit and commercial publishing service providers, as well as some university presses.
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Profit-sharing. The society and its publishing partner share the risk, with the sharing arrangement reflecting the relative risk incurred by each partner. Such arrangements can be perfectly equitable. However, as a society’s projected net income will depend on how a publisher handles some income and expense items, the society must carefully evaluate and compare all aspects of the financial terms of competing bids to ensure a meaningful comparison of like offers. The society should also determine whether the projected revenue to the society represents a guarantee or a good faith estimate. Some online aggregations also use profit-sharing arrangements. In such cases, the aggregator may retain a specified portion of the revenue to cover its costs, and distribute the rest to the participating publishers through a pre-determined royalty allocation.
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Revenue-sharing or royalty. In some arrangements, the publishing partner assumes all the costs of publishing the journal and pays the society a royalty based on a percentage of sales revenue. The terms typically reflect the fact that the publishing partner incurs most of the financial risk in such arrangements. As with profit-sharing arrangements, the society needs to determine whether the royalty is guaranteed or an estimate.
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Subsidized open access support. Several nonprofit providers of online journal hosting provide free or very low cost hosting services for open-access journals (see “Open Access,” in Chapter Five). Some of these services are subsidized by academic institutions, and others offset some of their costs by selling advertising.
Again, the models above represent general types of financial arrangements for journal outsourcing agreements. In practice, many services blend elements of the above types, and they describe their arrangements in various ways.
Online aggregations
Besides the online publishing services above, a society may make a journal available through an online aggregation, either in addition to, or in lieu of, standalone publication of the journal.
An aggregator licenses with publishers to assemble an online full-text database of journal content, typically on a non-exclusive basis.
