I recently had the chance to hear a proposal on how we could increase the production of quality open access monographs (not scholarly articles, but monographs).
The method proposed can be summarized fairly easily:
The benefits are pretty straight forward, as well:
Now, I have some issues with this model.
Luckily, Mike Masnick of Techdirt wrote recently about part of my issue with this model: “Nobody Cares About The Fixed Costs Of Your Book, Movie, Whatever”
His relevant points are:
If you did pricing based on the average cost, including fixed costs, you actually lose the incentive to be more efficient and lower your fixed costs, since you get to just bake them into the price. But the public doesn’t care about how much you spent. As far as they’re concerned, you may have spent stupidly and inefficiently. They only care about the marginal benefit they get from the copy.
In many ways this is reminiscent of the stupid debate we’ve had for years, where a lobbyist from NBC Universal kept challenging me to explain how he could keep making $200 million movies. But that’s stupid. If you start from the assumption of a high cost, you’re not building value, you’re just spending budget. All we should care about is how people can make profitable offerings, and there are lots of ways to do that at a variety of price points — but you should never set the pricing decisions on the fixed costs, because the buyer simply doesn’t care.
My additional points:
Let’s not forget about the “stakeholder-ness” of those who invest by covering the fixed costs. I argue that if we want to maximize social welfare (which, I assume, we do), those who invest by covering fixed/up-front costs should either:
Having the service provide (publisher) be the only entity that has the ability to commercialize the base (paid for) work needlessly restricts future investment by the public.
“Why would they invest in the value add markets if they don’t have a monopoly on them?” you may ask.
They would hold a monopoly on any value add features (eg: audiobook, videos, supplemental material, etc, etc) of course. And that is where they should compete, on the additions.
This is the same argument that many make regarding publicly funded research (see: , , . It is normally argued that those works should be available under the terms of (at most) CC:BY. This model maximizes public welfare two ways: the public get free access to the base works and everyone, including commercial publishers, are able to compete in the value add market.