ANTHROSOURCE FINANCIAL CRISIS – DOCUMENTS
My first essay below,
AnthroSource Financial Crisis,
underwent several drafts and reviews, as
Sandy Berlin, AAA Deputy Executive Director / Chief Financial Officer,
and Stacy Lathrop, Anthropology News managing editor, inspected it
microscopically for accuracy. Berlin and
Lathrop told me that they would publish the essay in the prominent Commentary
section of Anthropology
the event, however, they relegated it to the newsletter's page 61
(December issue). They justified this
obscurity by saying that its content, the slide of the AAA's small
publishing sections toward bankruptcy or endlessly increasing dues,
be of interest only to members of my section.
As is clear in Berlin's and Lathrop's reply to my essay, their Commentary on AAA's Publishing Program, which follows as the second document below, their deep(er) cover for not wishing my ideas to be read is that I am an alarmist and my conclusions are wrong. If their intention had really been to correct alarming misconceptions, however, the most constructive approach would have been for them to identify errors in my argument. Instead, their "commentary" barely comments on what I have to say. This suggests their helplessness before the disturbing issues I identify.
The third essay, my Concluding Remarks below, summarizes my position and highlights seven problematic features of the Berlin-Lathrop commentary. I have hyperlinked my critiques to specific paragraphs in their text. One can read their ideas and click to my criticisms, or read my criticisms and click to what they have said.
By Peter Biella (SVA President)
The news is disturbing—declining memberships, declining fund balances, skyrocketing AnthroSource costs. Between 2004 and 2005, as the Hilton crisis struck [*see my remark, below] and section dues increased to offset rising fees, thousands allowed their AAA memberships to lapse. This vote of no confidence caused overall membership to fall substantially. An aggregate figure of 681 members lost was reported in the Monthly Membership Report: August 2005. AAA now says that the reported figures on its "lapsed members" were problematic, if not erroneous, although membership is down.
Contradictory Budget Predictions
Small sections like the Society for Visual Anthropology (SVA) have been charged unprecedented fees this year, primarily to cover rising AnthroSource and University of California Press administration expenses. In May, I asked Malcolm Collier, SVA ex-president and treasurer, to help me analyze our section's financial condition. We projected that, unless the SVA receives revenue offsetting AnthroSource/UCP administration fees, we would be bankrupt within four years. (For latest budget figures, see http://www.societyforvisualanthropology.org/svafinances.html.)
I sent this disturbing prediction early last June to then AAA Director of Publications Susan Skomal, who is now employed elsewhere. Skomal responded with new budgets purporting to show that that our financial outlook was excellent. In Skomal's budgets, the fees were offset by a new "digital subscriptions" revenue, derived from UC Press' campaign to market AnthroSource. Skomal's budgets projected that the SVA would receive digital revenue of $4,127 in 2005, rising to $23,566 by 2008. These figures are intoxicating. If they were true they would prevent our bankruptcy. Unfortunately, the midyear digital revenue received by the SVA was only $212.
As a section president, I'm concerned that not enough is being done to protect small sections financially. I'm dissatisfied with UCP's marketing, and displeased with unannounced, repeated and substantial increases in AnthroSource/administrative fees. These factors make me skeptical about the viability of AnthroSource itself. In an October draft of this column, I expressed my concerns to AAA Deputy Executive Director/ CFO Sandy Berlin. She answered that UCP's AnthroSource marketing campaign experienced a "late launch." Digital revenue for the whole year, therefore, will surely be more than twice the midyear figure. UCP, Berlin concluded, provides "extensive professional marketing and promotion services."If the picture looks encouraging, it gets worse. I had dared hope that digital-subscription revenue would be sufficient to offset my section's financial crisis. Berlin responded that digital-subscription revenue is not guaranteed and that UCP is not contractually obligated to provide specific digital-revenue return. Berlin added: "AAA and sections should not rely on digital subscriptions to sustain or grow fund balances." This statement flatly contradicts Skomal's budget figures from last June [ibid.]. It does affirm, though, something I was told by two AAA sources who asked to remain anonymous: no one in the association has any idea what digital revenues may be.
The AAA's Proposals for Preventing Financial Crisis
In her October correspondence to me, Berlin included the AAA's official solution to the AnthroSource crisis. She said that sections must cope with increased fees in four ways. They must keep journal publications on time; raise membership dues; attract new members; and provide new services. I will discuss each.
I agree that unless journals remain current, they will lose library subscriptions and revenue. Visual Anthropology Review, long behind, is finally up-to-date, thanks to its editors Najwa Adra and Andrea Walsh.
Last year our section raised dues 60% to offset the increase in AnthroSource/UCP administration fees. A second increase of 60% would offset new fees unilaterally imposed on us this year. Given the pattern, I'm reluctant to raise dues again. AAA budgets are contradictory and erroneous; AnthroSource/UCP administration fees have only gone up, and AnthroSource guarantees no revenues. We need better solutions. If we let AnthroSource survive, it must either become less expensive or guarantee adequate revenue.
AAA administration wants sections to raise funds by acquiring new members. Given the recent defection of members, I cannot see where sections will find new people unless they steal them from one another. Multiple-section membership is increasingly expensive and reshuffling members into different sections does not increase absolute revenue. In any case, passing financial crises to underlings and having them compete for inadequate resources is unacceptable. A cynical administrative email last summer observed that raising dues had never yet caused a decline in membership. Let's not celebrate. The fact that an organization can bleed its members dry does not mean it should do so.Administration proposes that sections provide new services. Here again, administration asks members to donate more unpaid labor to the AnthroSource cause. Unfortunately, new services would be far more attractive if the AAA were instead the AMA and we all had extra money to spend. But membership dues, hotel rooms, airfares and conference fees are already expensive enough, and we already provide enough free labor.
First, if digital-revenue returns are not part of the AAA's contract with UCP, they should be. Sections should receive monthly updates on UCP's marketing progress to insure adherence to contract.Second, AnthroSource/UCP Administration fees must stop going up. Substantial annual increases, unilaterally imposed, are not acceptable.
Third, the entire AnthroSource collection should be put on DVDs, distributed to all members and all under-funded, Third World libraries. At the 2003 AnthroSource colloquium, the AAA promised that the AnthroSource collection would be made cheaply available to Third World universities and would thus benefit anthropological scholarship worldwide. We should keep this promise and expand it. Right now, policy is that only current members and subscribers are allowed online access to publications. If we are trying to advance scholarship, then eligible libraries and all members should receive DVDs at cost. (On this plan, First World libraries would continue to pay normal digital-subscription rates.) Sandy Berlin objected to the idea of DVDs, citing statistics that members like AnthroSource as it is. True, but members do not realize how expensive AnthroSource is. Berlin further claimed that DVDs lack functionality desired in the online environment. This is not strictly true. DVDs can be given high functionality. They are also infinitely cheaper than AnthroSource.
Fourth, an emergency plan. If—only if— AnthroSource cannot support itself through digital-subscription revenue, then the AAA should abandon AnthroSource. It should store only its most recent publications online. Distributing solely on DVD, the AAA could then update its latest disc annually for library archives and members.
Fifth, judging from the contradictions and errors I've found in trying to learn the AnthroSource facts, it is clear that more AAA members need to question section finances. Criticism about disturbing trends is the best chance we have of counteracting the association's slide to bottom-line-first management.
Many thanks for their help with this essay to Malcolm Collier and Sandy Berlin. Email Peter Biella at email@example.com. [In fact, emailing the listserv will be more useful at this time. For that purpose, click here. ]
By Sandy Berlin (AAA Deputy Executive Director/ CFO) and Stacy Lathrop (AN Managing Editor)
Analyzing Publishing Finance
It would be wonderful if a budget were a guarantee, but it is a roadmap, preferably based on existing prior history and anticipated plans. In developing a AAA/section-sponsored publishing budget, AAA staff collaborate with section leadership, consult experts in the field, like UCP, and analyze available historical data and trends. Methods and formulas for equitable cost and revenue-sharing have been adopted by AAA leadership, who provided input to the current allocation methodologies. [Comment 7]
Yet, analyzing finances and trends during this transition from print to digital publishing involves interpreting incomplete historical data; it is too soon to be certain how libraries, researchers and other users will continue to respond to the shift. This is why the AAA cannot request that its sections, staff or UCP, to whom it contracts for services, provide guarantees for revenue. AAA can and does, routinely evaluate UCP's services. UCP is charged with successfully performing their defined contractual services for all of AAA's publishing program, not the specific quantitative results of their efforts. Digital institutional subscriptions to 11 of AAA's journals began in 2005, and as is common with a startup year, there have been delays, unanticipated complexities in negotiating license agreements, timing issues related to different fiscal years between AAA and UCP, and difficulties in locating and digitizing all of AAA's legacy publications.
While Biella points out the Society for Visual Anthropology's feat in catching up its publication, Visual Anthropology Review (VAR), he neglects to explain the financial impact of not having published it for several years. For one it contributed to the 7% decline in VAR institutional subscribers between 1999 and 2004. Secondly, SVA's fund balance increased because it did not incur the editorial and production costs during those years. Finally, it meant that when the SVA produced two double issues, rather than its normal two single issues this year, the 2005 editorial and production budget increased twofold.
In an effort to ensure AnthroSource isn't made a scapegoat, let us set out some terms for interpreting publication budgets. AAA/section-sponsoring publications have three types of expense: print publication costs, UCP management fees and digital operating expense. Print publication costs, incurred by each publication whether it uses UCP or not, include copyediting, composition, printing and distribution. In 2004 print publishing costs comprised 57% of Visual Anthropology Review's budget.
UCP management fees, charged to publications using UCP, include the labor cost for fulfillment, production control, and marketing and administration. Publications were similarly charged overhead when AAA staff handled editorial and production activities in-house. What is different, however, is UCP's extensive expertise in marketing and promotion. They are using this expertise in developing and implementing a marketing plan. In 2004 UCP management fees consisted of 41% of Visual Anthropology Review's budget.
The expense related to print publishing and management fees has been, and will continue to be, incurred for traditional publishing activities. AnthroSource and AAA's transition to digital publishing has created a new type of expense for AAA/section-sponsored publications. This new expense includes digital operating costs to host and archive both legacy and new pages to the portal. In 2004 these costs comprised 2% of Visual Anthropology Review's budget.
There have been bumps for all involved in outsourcing the association's publishing program— given economies of scale, partnering with a publisher like UCP is necessary to develop and launch a whole new digital scholarly resource. Despite those bumps, AnthroSource is well received by institutional subscribers; and, in a recent membership survey, AAA members viewed AnthroSource as a top member benefit.
Leaders of anthropology associations around the world have also commented in AN that online portals—not DVDs—are an answer to building bridges in international collaboration and equitable, seamless access to anthropological scholarship. They understand that in a Google age, with the Internet and electronic publishing, a portal is the way to move forward. There will be challenges surely in realizing this goal. But pulling the plug on our investment in AnthroSource is not only premature, but it is not justified given scholarly publishing today.
By Peter Biella, SVA President
My essay did not advocate that the AAA
precipitously pull the plug on AnthroSource. It drew attention to
the financial crisis precipitated by AnthroSource. The essay went
on to outline breaches of faith: the AAA has proposed unworkable
solutions to the crisis, delayed the fulfillment of an important
promise, covered up the problem with imaginary and misleading data.
A commentary of
Berlin and Lathrop contribute little that is new. The authors hazard a moment of levity when they claim that AnthroSource is a floating signifier; it means anything to anybody. Maybe so, but in 2005 this floater meant a bill to the SVA of more than $16,000. Moreover, since we want to publish a new volume of the journal each year instead of simply paying to keep the old ones online, we have to spend another $7,000 per volume. Unfortunately, our 2005 revenue is only about $19,000. (See budget.) The problem is serious.
I have seriously tried to understand why Berlin and Lathrop chose not to tackle any of the frightening issues I've described. Prominent figures in the AAA administration, they are in a difficult position. On one hand, they have as individuals admitted their own fears about the AAA's financial stability; perhaps too they are ashamed that I was sent a misleading budget. Off the record, they have been helpful and frank. On the other hand, when serving in their official capacities, they cannot acknowledge the problems I've identified and are obliged to repeat the unworkable solutions dictated by the party line. No wonder they are tempted to practice the arrogance of power: "Never apologize, never explain."
If the administration can make no comment on the problems I've identified, I invite discussion by the general AAA membership. I've asked the SVA to volunteer its listserv for the purpose. To join, send an email--which needs no title or subject heading--to <firstname.lastname@example.org>. The body of the email must read: subscribe society-visual-anthropology-l Within a few hours your name will be added to the list and you will receive an informational email explaining how to post messages, etc. I look forward to your contributions.
Following is a summary of the key points I've raised.
Below is an elaboration of the points I have just
summarized. Each is linked to a section of the Berlin-Lathrop
commentary. I have chosen to reply to it at length because, as the
AAA’s official response to my essay, it continues the policy of denial
that prompted me to write in the first place.
Berlin and Lathrop begin with a repudiation of my
position--I am a screamer, an alarmist. Berlin also recently
repudiated her original response to my questions, the groundless
digital-subscription revenue figures that she and Skomal invented last
summer in the administration's first effort to quiet me. The
B&L commentary addresses many of the subjects that my essay
critiques, but it ignores my arguments and offers no viable solutions
to the problems I identify.
2) Declining membership (paragraph 2)
It's a bad sign that the AAA sent me a budget that
misleading. It's a bad sign that the administration never
publicly acknowledged it had made mistakes in its membership numbers
Section leaders need good
make good decisions. We cannot lead if we are misled.