How offsetting schemes can reduce APC costs | Jisc Scholarly Communications

"In order to manage the transition to open access publishing, Jisc Collections has been working with publishers to implement offsetting mechanisms in which payments for journal subscriptions and article processing charges (APCs) are offset against each other to reduce the overall cost to institutions. A number of publishers have now implemented offsetting schemes for their subscribers and we can already see this having an effect on the cost of APCs. One publisher, SAGE, has a scheme which gives a flat-rate heavily discounted APC price to institutions who subscribe to their journal package. The discount applies to all APCs in hybrid journals (i.e. subscription journals which have the option of making individual articles open access). Jisc Collections works with institutions to collect open data on their APC expenditure which means that we can compare expenditure on APCs in 2013 and 2014 to monitor the uptake of SAGE’s offer and see what effect it is having (this data is openly available). From a sample of 22 UK higher education institutions, 20 APCs were paid to SAGE in 2013 and 229 in 2014. So more than ten times the number of APCs were paid, increasing SAGE’s proportion of institutions’ total APCs from 0.9% to 3.6%. Because of the offsetting discount SAGE did not receive ten times the income, but the revenues generated from these APCs still rose from £16,426 in 2013 to £85,836 – a fivefold increase. This increase in revenues was twice as large the average increase recorded across all publishers. By being an early adopter of APC offsetting schemes, this publisher increased their revenue and market share, while higher education institutions benefitted from sharply lower prices (the average APC paid to SAGE from this same sample of data was £821 in 2013 and £376 in 2014). If the same number of APCs had been charged at full price then institutions would have needed to pay an extra £100,000. However, the bulk of the savings were made by just one institution, which made use of the offer by paying 159 APCs at the discounted rate ..."