Credit Suisse Report on STM Publishing
Peter Suber, editor of the SPARC Open Access Newsletter, summarized the report’s main conclusions relevant to the open access movement in issue #73. The complete summary is available at: < http://www.earlham.edu/~peters/fos/newsletter/05-03-04.htm >. Selected relevant excerpts from Peter Suber’s summary are included below, with permission.)
[According to the Credit Suisse report,] there are "three pillars" of STM publisher profits: copyright, peer review, and bundling. STM publishers won’t be in trouble until one or more of them starts to fall. The first two are secure but the third is teetering. Taxpayers and governments pay for scientific journal research three times over: (1) through research grants to scientists, (2) through university subsidies that pay the salaries of researchers, editors, and referees, and (3) through university subsidies that pay for journal subscriptions. This is not sustainable. Eventually taxpayers and governments will wake up to what is happening and put an end to it. But governments outside the U.K. are doing nothing to shift to a more sustainable model, and the U.K. government will probably do nothing before 2005.
Elsevier has higher profit margins on low-quality, low-submission journals than on high-quality, high-submission journals. The lower rejection rates of the former bring down the cost per published paper without forcing a reduction in the price. This is a reason for Elsevier to encourage bundling i.e. to reduce the freedom of librarians to cancel low-quality journals. It’s also a reason why recent cancellations of the Big Deal will cut into Elsevier profit margins.
As profit margins decline, Elsevier will not have room to compensate by raising prices. Its prices are already so high relative to its rivals that further increases will trigger more cancellations and increase interest in open access.
Open Access (OA) journals have lower costs per article than toll-access journals, but this savings is more than offset by the revenue per article generated by toll-access journals.
Open Access will not "undermine" or "destroy" the STM publishers, but it will reduce their profit margins and future growth. OA threatens lower-impact toll-access journals more than higher-impact toll-access journals, but this is the bulk of the toll-access journal market.
Three other factors that will slow the adoption of OA: (1) those who benefit financially from OA cannot easily act in unison and gain little by acting alone, (2) most authors transfer copyright to journals, and (3) a large number of journals still use the Ingelfinger rule, the in-house rule prohibiting "prior publication" of submissions.
[From the SPARC Open Access Newsletter, issue #73]
