The discussion about subscription agency fees is an important one.

Earlier this century subscription agencies received sufficient discounts
from publishers to enable agents to sell journals and magazines to libraries
below the publishers' list price.  By mid-century, as subscription agencies
expanded and enhanced their services and as discounts topped out, agents
began to add a percentage service charge to the list price.  The effect of
this pricing policy is that agencies tend to "lose" money on inexpensive, no
discount titles and titles that are difficult to service and tend to "make"
money on expensive titles, ones that are easy to service and those with good
discounts.  As a result, discount publishers, such as Elsevier and Academic
Press, in effect subsidize the no-discount publishers, such as American
Chemical Society and Standard and Poors.  A $500 Academic Press title nets
Academic Press $475 after the agency discount; a $500 ACS title nets ACS
$500.  On average, in most cases, it all balances out from the perspectives
both of the agencies and their library clients.

Over the past two decades publisher discounts have noticeably declined,
putting great pressure on agents to increase their service charges, reduce
their costs by redesigning their services, or both.  In addition to the
overall decline in agency discounts, there continue to be major
discrepancies between publishers with regard to such discounts.  Thus
differentiating between discount and non-discount publishers and between
titles which are easy to service and those which are difficult, makes a lot
of sense.  The logical extension of this strategy, as at least once
subscription agency is doing, is to pass the discount through to the
purchaser and charge a transaction fee based on the cost of servicing the
title rather than on the price of the title.  Rare titles and those which
are difficult to service can have additional charges reflecting the cost of
servicing them.  This alternative model eliminates cross subsidies between
publishers -- every title "stands on its own bottom" -- and gives the
purchaser a more accurate sense of the true cost of each subscription.

It is reasonable to expect that publisher discounts will continue their slow
decline in the years ahead, placing increasing pressure on subscription
agents and libraries alike to rethink agency pricing models.

Richard R. Rowe
RoweCom
rowe@rowe.com