Powerful suppliers, including suppliers of labor, can squeeze profi tability out of an industry that is unable to pass on cost increases in its own prices.

And JSTOR really was in an impossible bargaining position. Important scientific papers do not have cheaper alternatives. If someone wants to read Watson and Crick's paper on DNA or Einstein's paper on the photoelectric effect, it is not as if there is a paper by John Doe that is just as good and available for less. Academic publishers are, in effect, natural monopolies that can demand as much money as we can afford, and possibly more.

But like the original authors, JSTOR had to negotiate its licensing agreements from a position of weakness. There is a wonderful history of JSTOR written by Roger C. Schonfeld. In it he notes that the charter publishers signed up by JSTOR (in particular the University of Chicago Press) demanded that they be compensated if there was a loss to their (minimal) sales of rights to older materials, and they demanded compensation even before JSTOR covered its own expenses.