In this paper some well-known facts about journal pricing practice are examined within the framework of a formal economic model of supply and demand. Commercial policies are then related to the traditional cost structure of academic publishing. The effect on costs of the transition to electronic formats is highlighted. Site licences are shown to be one way of exploiting new technology to break out of the vicious cycle of rising prices and declining circulations. Finally, I point to some of the other, non-economic, advantages of site licences, while recognising the issues which still need addressing.