Cost recovery: decisions to make

1. Acceptance of the cost recovery framework

2. Set membership fee 3. Set baseline deposit fee4. Build in transaction costs for deposit plans5. Set the nonmembership surcharge6. Set charges for excess storage7. Decide how to implement waivers8. Decide when to phase in cost recovery

How we got here• Sustainability planning started in Dec 2009• Two consultancies

– Lorraine Eakin-Richards (budget projections)– Neil Beagrie & colleagues (sustainability recommendations)

• Fed into an initial plan proposed by the Interim Executive Committee (April 2010)

• Progress to that point summarized in:– Beagrie N, Eakin-Richards L, Vision T (2010) Business Models and

Cost Estimation: Dryad Repository Case Study, iPRES2010, see http://wiki.datadryad.org/Publications

• Over a year of consultation with partners and other stakeholders, culminating in a DryadUK workshop in April 2011

• Substantially revised by Interim Board in July 2011• Reviewed and put to a vote by the Interim Executive

Committee• Approved by the Interim Board in May 2012

Initial guidance to consultants

• To not be dependent on grant funding and institutional largesse for operational costs– Assume we need to recover costs for

curation, maintenance, preservation, other core functionality

–While assuming continued R&D funding and institutional hosting

• Interim board desired costs in the range of $25-50/article

Eakin-Richards cost model• Activity categories based on KRDS:– Included: management & administration,

curation, hardware/storage, software/system maintenance, marketing/promotion, board meetings, etc.

– Did not include: facilities, training, 501c3 status

• Projections over 5 years– Varied curation level: 5, 20, 140 mins/article– Allowed volume of data submissions to vary

Eakin-Richards projections 1

,560

3,1

20

4,6

80

6,2

40

7,8

00

9,3

60

10,

920

12,

480

14,

040

15,

600

17,

160

18,

720

20,

280

21,

840

23,

400

24,

960

26,

520

28,

080

29,

640

31,

200

32,

760

34,

320

35,

880

37,

440

$-

$20

$40

$60

$80

$100

$120

$140

Per Article Costs – Moderate Curation

Required Ingest (Articles Per Year)

Cost

Per

Arti

cle

Lessons from Eakins-Richards

• Curation levels–Moderate curation (20 min/article) found

to be viable (note: we now estimate this to require ~30 min)

• Scale is critical– Costs (on a per article basis) are viable

starting at 5-10K submissions/yr – Curation costs dominate at >30K

submissions/yr

Beagrie April 2010 sustainability report

• Included– Key performance indicators – Cost and revenue comparators– Comparison of different revenue options– Revenue scenarios for Dryad– Risk register

• Key recommendations– Full-time executive director– Close association with an institutional host– Diverse revenue stream including deposit fees,

partner subscriptions and grants

Cost comparators• Staffing at other data archives– 2-4 FTEs is smallest viable size seen– Staff >10X larger at highly curated resources like PDB

• Competing with publisher hosting of data files– Dryad’s partners have emphasized the need to

articulate the added value to journals over suppl. files– Some publishers see suppl. files as a growing burden– But none interviewed could provide clear information

on costs – Most journals do not charge for suppl. files– Those that do charge $100 to $300+ per file– A few journals now reject most or all suppl. files (e.g.

Cell, J. Neuro.)

Revenue sources considered by Beagrie

• In-kind contributions (e.g. institutional hosts)

• Journal subscriptions• One-time joining fees• Deposit fees• Grants• Tiered charges based on dataset size• Angel donors • Advertising and sponsors

Rationale for charging deposit fees• Enables free access to end-users• The majority of costs are incurred upon

ingest • Revenue from deposit fees scales with

costs • The costs are spread widely• Costs are distributed fairly according to

deposit use

Plan circulated 2010-2011

DryadUK sustainability activities

• Private consultations with several major publishers • Workshop at British Library, April 2011

– Researchers, learned societies, journal editors and publishers, funders

– Solicited frank feedback separately from each stakeholder group

– All attendees voted on perceived market value:• Majority: $50-$100• A few felt a more expensive service than Dryad offers would be

desirable – Outcomes discussed at the July 2011 Dryad Interim Board

meeting• Examined feasibility and costs of service mirroring

Pushback on initial plan• Seen to work well for small society journals • But not as well for – large-volume publishers– journals of broad scope

• Concerns expressed – price curve from A to C seen as unfairly steep– journals should not be penalized for paying

retrospectively– journals should not be penalized for using

Dryad occasionally

Consensus from Interim Board Meeting, July 2011

• Membership not ties to deposit fee structure– Instead, discounted deposit fees are a member benefit – Members pay an annual fee (w/ no fee to charter

members for 3 yrs) – Membership open to any legitimate organization

supporting Dryad’s mission– Proposed $1K annual fee for 10% discount

• Deposit fees– Four payment plans that accommodate different usage

models– No discounts for bulk deposits– No joining fees (to cover submission integration)– Aim for baseline costs ~$50/submission– Deviations from that baseline should be due only to

transaction costs and nonmembership surcharges• Voted on and approved by the Interim Board this

Spring• Subject to review by BoD

Deposit fees in the cost recovery framework

Plan Contract Paid by Cost2 (approximate)

Journal “subscription”

yes Journal1, in advance Based on annual volume of research articles ($25-30/article)

Pre-paid per-deposit

yes Journal1, in advance $50-60/data package

Pay-as-you-go per-deposit

yes Journal1, invoiced periodically for prior deposits

$60-70/data package

Individual deposit

no Author, at time of deposit $70-80/data package, with a process for granting waivers under development

1 Or other sponsoring organization2 Up to a fixed deposit size (currently 10GB). Additional charges for larger deposits. The lower figures are intended to be rates for members, with a10% surcharge for nonmembers

Anticipated transaction costs• Billing overhead, including individual

interactions• Monitoring voucher status• Waiver overhead• Contract negotiation for partners• Cash flow

Projections for this meeting• Assumptions– Curation by students, 30 min/article– $100K/yr in fixed costs (not incl. staffing)– Membership revenue $1,000/yr per member– Deposit fees: $40-$70/submission

Low High

Staff 3.5 FTE 7 FTE

Members 20 100

Submissions/yr 2,000 10,000

Scenario Staff Members Submissions/yr $40 $50 $60 $70

A Low Low Low -$355,825.0-

$337,825.0 -$319,825.0 -$301,825.0 B Low Low High -$115,825.0 -$25,825.0 $64,175.0 $154,175.0

C Low High Low -$275,825.0-

$257,825.0 -$239,825.0 -$221,825.0BALANCE D Low High High -$35,825.0 $54,175.0 $144,175.0 $144,175.0

E High Low Low -$576,650.0-

$558,650.0 -$540,650.0 -$522,650.0

F High Low High -$336,650.0-

$246,650.0 -$156,650.0 -$66,650.0  G

High High Low -$496,650.0-

$478,650.0 -$460,650.0 -$442,650.0  H

High High High -$256,650.0-

$166,650.0 -$76,650.0 $13,350.0

A Low Low Low B Low Low High 112.94% 127.06% C Low High Low REVENUES/COSTS D Low High High 110.93% 129.08% 129.08% E High Low Low F High Low High   G High High Low   H High High High 101.86%5,000? Scenario B & D with variable submissions

Balance projections

Membership numbers • Currently 26 charter members– Discussions underway with >15 other

organizations, mostly journals• How many potential members are out there?– Over 3000 journals provide content to

PubMedCentral– Not counting other types of organizations (e.g.

libraries)• No separate membership drive has yet been

made

Recent deposit rate increases of 500-750/yr

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22010 2010 2010 2010 2011 2011 2011 2011 2012 2012

0

100

200

300

400

0

5

10

15

20

deposit rate

integrated journals

Depo

sits p

er q

uart

er

Cumulative integrated journals

Deposit rate increase projections

2012 2013 2014 2015 2016 2017 2018 2019 2020 20210

2500

5000

7500

10000

500/yr750/yr1000/yrannual doubling

Deposit rate increaseDepo

sits/

yr

Excess storage costs• Current limit is 10Gb/data package

– Mean is ~10 Mb/data package• Assumptions

– 1 download/month (bandwidth will drive costs)– Excess curation effort is not significant

• Estimated costs – $100-125 per Tb/month

• To recover costs– Investing into an endowment with 5% annual return

will require $24-30K per Tb– Propose charging $30/Gb

Deciding on a waiver policy• BMC policy

– an automatic waiver to authors in countries classified by the World Bank as low-income or lower-middle-income economies as of December 2011 and with a 2010 gross domestic product of less than 200 billion US dollars

– For others, full or partial waivers on a case by case basis• PLoS policy

– ‘No-questions-asked’ – “We have found that nearly 90% of those who submit

manuscripts do not request a fee waiver, and the few who do still offer to pay some portion of the fee.” (Doyle et al., 2004, Who Pays for Open Access? PLoS Biol 2, e105)

• We have assumed 10% full waivers in our cost projections

Issues in phasing in cost recovery

• At current scale, we would recover– $26,000-40,000 in membership fees– ~$60,000 in deposit fees (assuming $50/per)

• Issues to consider– Community readiness– Technical preparation

• Questions– Whether to phase in all revenues at once?– Whether to offer introductory periods?– How hard to push for non-journal-based discounts?

Cost recovery: decisions to make

1. Acceptance of the cost recovery framework

2. Set membership fee 3. Set baseline deposit fee4. Build in transaction costs for deposit plans5. Set the nonmembership surcharge6. Set charges for excess storage7. Decide how to implement waivers8. Decide when to phase in cost recovery