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    11.2 Journal Demand

    From the perspective of a journal user, it might seem that demand for each unique journal title should be treated separately. For example, articles in Brain Research are distinct from and cannot easily substitute for articles in the New England Journal of Medicine, much less those in the American Economic Review. If demand for each unique title is independent, then the publishers of individual titles have the capacity to obtain monopoly returns. Mergers won't matter.

    The notion that the demands for individual titles are unrelated is incorrect because it misidentifies the purchaser. Libraries, not readers, buy most of the subscriptions, especially for expensive STM journals. Thus it is the demands by libraries for different titles that determine whether mergers will create additional market power. Discussions with dozens of librarians revealed the following: their purchase of academic journals is generally based on two factors: annual subscription price and expected usage. To assemble and maintain their collections, most libraries appear to construct a cost per use ratio for each title.[5] Given a budget for a relevant academic field, e.g., biomedicine, they then proceed to rank journals from lowest to highest in that field according to this ratio, and identify a cutoff above which titles are not subscribed.

    From year to year, as budgets and titles' usage change, collections are adjusted accordingly.[6] Over the past decade or so the general trend is for increases in library budgets to lag journal price inflation; a consequence is that many libraries have been forced to re-allocate dollars from monographs to journals, to postpone the purchase of new journal titles, and, in some cases, to cancel titles.

    The most interesting aspect of library demand for journals is that individual titles within a given field are considered simultaneously. That is, the content may be unique, but on a cost per use basis different titles are substitutes. Titles compete with each other for budget dollars across an entire field of users served by the library, rather than demand for each title being independent as the user perspective suggests. Demand by libraries, the actual purchasers of subscriptions, is for a portfolio of titles drawn from a rather broad set.