The economics of “Big Deals”: Pricing bundles | Dr. Rupert Gatti

"In a recent article, Liam Earney from JISC Collections summarised recent negotiations with publishers over Big Deal contracts, and observed:

'Some publishers who are approached by consortia for offsetting agreements express the view that they have to offer three levels of discount. First is the ‘discount’ they already offer on the collective price of journals as part of the big deal, second is the global price reduction on subscription costs they implement in order to fulfil their anti-double-dipping policies and, finally, they are now asked to implement a third local offset for those research-producing institutions faced with increased APC costs. Withdrawing any one of these will lead to protests from at least one segment of their customer base depending on that particular segment’s attitude or policies around gold OA, thus placing them between a rock and a hard place.' [1]

Given the prevalence of these types of arguments I thought it may be worth reiterating the basic economics of the pricing of bundles. The key message: by apparently providing discounts on the individual journal prices within a bundle of journals (or Big Deal) a publisher is able to increase the overall expenditure incurred by the library, tie the library into the Big Deal contract, and increase publisher profits."