Economics of Publishing Category

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Lawrence Lessig on science publishing & free (open) access

By
Edward Shreeves
– May 19, 2011Posted in: Copyright, Economics of Publishing, Open Access, Publicly Funded Research, Publishers

Beginning immediately, Transitions, the University of Iowa’s occasional newsletter on scholarly communication issues, will appear as a blog, with postings at regular intervals as circumstances demand.

Our first posting is a link to the audio and slides of Lawence Lessig’s recent (April 18, 2011) presentation on science, copyright and open access to an audience at CERN. Lessig, Harvard professor and copyright guru, argues that the “architecture of access to scientific knowledge” is badly “messed up” and puts forth moral arguments for a move to open access publishing as the solution. Along the way he touches on YouTube mashups, copyright, politics, John Philip Sousa and much else.

See http://motherboard.tv/2011/4/25/lessig-copyright-isn-t-just-hurting-creativity-it-s-killing-science-video–2

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Commercial Publisher Financial Results

By
Karen Fischer
– May 10, 2010Posted in: Economics of Publishing, Publishers

Read about the  financial results of two large commercial publishers.  Even in a global financial crisis, they are doing quite well for themselves.

Reed Elsevier announced it’s 2009 financial results.  Here’s an excerpt from the press release (thanks to DigitalKoans for the links and synposis)

Elsevier (44% of adjusted operating profits)

  • Revenue growth +4%, adjusted operating profit +9%, at constant currency
  • Strong growth in electronic clinical reference, clinical decision support and nursing and health professional education; continued weakness in pharma promotion
  • Solid science journal subscription renewals from 2008 supported 2009 revenue growth

Read more about it at “Robust Year for Reed Elsevier” (Booksellers.com)

excerpt:

The legal wing LexisNexis, which makes up 42% of adjusted operating profits for the group, saw sales grow 14%, and adjusted operating profit rise 13%, at constant currency. Reed said its core law firm markets were flat in US and marginally lower internationally reflecting a downturn in legal services industry.

The publishing arm of Reed Elsevier has had a “relatively robust year” in light of the economic downturn, thanks to good subscription renewal rates among its journals and strong e-book sales, the company has claimed.

The company saw revenue growth climb 14%, as did adjusted operating profit, and cashflow grew 11%. However reported operating profit declined 13%.

Elsevier, which contains the science publishing divisions and accounts for 44% of adjusted profits for the entire group, saw sales grow 4%, while profit increased 9%.

John Wiley & Sons, Inc. annouced it’s 2009 results (which are now no longer on Wiley’s website), but DigitalKoans sums it up well in his blog post, where he provides excerpts from a press release.

SCIENTIFIC, TECHNICAL, MEDICAL, AND SCHOLARLY (STMS)

  • Full year revenue +9% and fourth quarter revenue +17% on currency neutral basis (a nonrecurring acquisition accounting adjustment reported in fiscal year 2008 contributed 2% to the full year growth rate)
  • Full year contribution to profit +14% and fourth quarter contribution to profit +22% on a currency neutral basis
  • New contracts in fiscal year 2009 to publish 32 society journals; renewed or extended contracts for 87 journals; did not renew agreements to publish 9 journals

Global STMS revenue for fiscal year 2009 declined 1% to $969 million due to unfavorable foreign exchange of $97 million. Revenue advanced 9% on a currency neutral basis and including a $17 million acquisition accounting adjustment, which reduced revenue in fiscal year 2008. Increased revenue from journal subscription renewals, new business, global rights, and STMS books was partially offset by lower sales of backfiles, reprints, and custom publishing.

Direct contribution to profit for the fiscal year grew 4% from prior year to $399 million. On a currency neutral basis, contribution to profit advanced 14%. The year-over-year increase reflects top-line results and a $17 million accounting adjustment related to the Blackwell acquisition that reduced revenue in the comparable prior year period, partially offset by higher editorial fees due to the addition of more society journals and performance-related compensation.

For the fourth quarter, global STMS revenue was down 2% with a negative foreign exchange effect of $54 million. On a currency neutral basis, revenue advanced 17% due to the resolution of the third quarter journal billing delays, which shifted some revenue into the fourth quarter. Revenue also advanced due to new business. Higher global rights income was offset by lower backfile sales and advertising revenue. Direct contribution to profit for the quarter increased 3%, or 22% excluding the unfavorable impact of foreign exchange, mainly due to top line results.

STMS Journals
All regions exhibited journal sales growth, excluding unfavorable foreign exchange. The performance is mainly attributed to renewals, new business, and the acquisition accounting adjustment in fiscal year 2008. Subscription and pay-per-view revenue was up year-over-year, while backfile revenue fell due to the economic climate, particularly in the US. . . .

Journal Licenses
Journal licenses, which represent approximately 60% of our journal subscription revenue, provide academic, government, and corporate customers with online access to multiple journals. In the fourth quarter, agreements were signed or renewed with universities, library consortia, and government agencies in the US, Norway, Japan, China, Brazil, Canada, Greece, Chile, Denmark, and India.

STMS Books and References
Book sales and other related income, which account for approximately 17% of STMS revenue, were up 5% over fiscal year 2008 on a currency neutral basis. The total number of books published was up slightly. Online book sales rose approximately 20% to $10 million.

And Wiley’s 3rd quarter fiscal year 2010 results show that Wiley STM profit rates are up 18% to $89 million (for one quarter!), for a profit rate of 39%. Wiley is outsourcing – so these profits are accompanied by job losses in the U.S (from Heather Morrison).

excerpts:

“Global STMS revenue for the third quarter of fiscal year 2010 rose 13% to $228 million”

“Direct contribution to profit for the third quarter increased 18% to $89 million”

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Impact of Economic Downturn on Professional and Scholarly Societies

By
Karen Fischer
– July 23, 2009Posted in: Economics of Publishing, Scholarly Societies

From Charles Bailey’s blog, DigitalKoans (July 2, 2009):

A survey presented at a recent Wiley-Blackwell Executive Seminar on “Journals Publishing: Policy and Practice in an Uncertain Market” shows that scholarly societies are surprisingly optimistic about the effect of the global downturn on their publishing operations.

Here’s an excerpt from the press release:

Sixty percent of professional and scholarly societies believe that the global economic downturn might be a stimulus to introducing efficiencies within their organizations, while 57% think it might provide opportunities for launching new activities or services for their members, according to a new study presented at the Wiley-Blackwell Executive Seminar held at the Royal Society, London, on June 19th 2009.

The study, carried out by Wiley-Blackwell, the leading publisher for professional and scholarly societies, examined the potential impact of the economic downturn on its society publishing partners. Sixty-eight percent characterized the global economic downturn as moderately negative, while 17% stated that it will have minimal negative impact or may even be beneficial.

Asked to rank the expected impact of the economic downturn on each category of their organization’s revenues or assets, more than 75% of society officers believed that there would be a very or slightly negative impact on their membership dues and conference income, with the most concern expressed about endowments and investments. Thirty-two percent did not anticipate any change in income from publishing, forty-seven percent believed it could be slightly affected, while 17% percent felt this area may be very affected.

In terms of strategies to ride out the economic crunch, 41% said that they would consider downsizing while a further 41% said they would consider expanding. More than half (54%) felt that the way to navigate the recession was outsourcing some of their core activities, such as publishing. Two-thirds thought that their publishing needs would not change during the recession, while one-third thought they would. . . .

The survey, carried out by Wiley-Blackwell in Spring 2009, was completed by 47 officers from scholarly and professional societies ranging in size from less than 500 members to more than 25,000, and from a variety of subject disciplines. The majority of respondents were based in Europe and the United States.

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Publishing an E-journal on a Shoestring: Sustaining a low-buget OA journal

By
Karen Fischer
– March 3, 2009Posted in: Economics of Publishing, Open Access

Piero Cavaleri, et al., Publishing an E-journal on a shoe string: Is it a sustainaible project?, working paper, February 2009. (Thanks to Gavin Baker, Open Access News)

Abstract:

The aim of this article is to report on an experiment in publishing an open access journal and learn from it about the larger field of open access publishing. The experiment is the launch of theEuropean Journal of Comparative Economics (EJCE), an on-line refereed and open access journal, founded in 2004 by the European Association for Comparative Economic Studies and LIUC University in Italy. They embarked upon this project in part to respond to the rising concentration in the market for scientific publishing and the resulting use of market power to raise subscription prices and restrict access to scientific output. We had hoped that open access journals could provide some countervailing power and increase competition in the field. Our experience running a poorly endowed journal has shown that entry to the field may be easy, yet that making it a sustainable enterprise is not straightforward.

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University Presses Find Strategies to Survive Economic Crisis

By
Karen Fischer
– March 3, 2009Posted in: Economics of Publishing, Humanities, Publishers, Social Sciences

Jennifer Howard, University Presses Adopt a Variety of Strategies to Survive the Economic Downturn, Chronicle of Higher Education, Jan. 30, 2009

Excerpts:

Low sales, high numbers of books returned, operating subsidies threatened by state and university budget cuts: As the economy slumps, those are just some of the problems that confront academic publishers. Overall sales for July 1 through December 31 were down nearly 10 percent compared with the same period in 2007, according to a recent survey by the Association of American University Presses. …

Talk to individual press directors and sales managers, however, and it becomes clear that the crisis does not look and feel the same for everyone. Some presses have felt a hard pinch. Several directors use euphemisms like “disappointing” to describe sales figures that are worse than they will acknowledge in public. But others are having decent, even good years, as tightly focused or broadly appealing lists keep them in the black. The best news for authors: So far no press has announced plans to cut back on the number of books it publishes.

At the University of Iowa Press, the director, Holly Carver, said she is still waiting for the first shoe to drop. “The tone is not doom and gloom,” Ms. Carver told TheChronicle. “We have a strong spring list, and we’re on budget, so we’re optimistic, even in flood-devastated Iowa.” (The state, including the university’s campus, was hit hard by floods last year.)

Ms. Carver believes that being “little and agile” — Iowa publishes 40 books a year with a staff of 7.5 — has helped. “We’re not overextended. We can work quicker and alter our budget or our print runs and projections more easily than a larger press can,” she said.

… A bit of luck (or good editorial judgment) doesn’t hurt, either. The Iowa press hit a home run in 2008 withSunday Afternoon on the Porch, a book of photos of a small Iowa town taken in the 1930s and early 1940s. The New York Times did a big spread, and Iowa public television has a show in the works.

“One or two decent-selling books for a university press our size can really made a world of difference, because we really do tend to sustain ourselves on backlist,” said Jim McCoy, the press’s director of marketing and sales.

He is “cautiously optimistic” that sales will remain good, at least in the short term, but “I’m seeing disturbing trends when I dig into the numbers,” he said. He worries about the future of bricks-and-mortar bookselling, for instance, whether at independent bookstores or at chains like Barnes & Noble — a fear shared by many of his counterparts, even though they see the benefits of reaching readers through online sales outlets such as Amazon.com.

Mr. McCoy sees looming vulnerabilities in the library market, too, and he expects to see a drop-off there in the next six months to a year. “When state budgets finally catch up with the rest of the world,” he said, “then you’ll see academic libraries’ budgets starting to get cut, and that will affect everyone.”

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AAA Awarded Planning Grant to Examine Future of Scholarly Journals

By
Karen Fischer
– November 14, 2008Posted in: Alternative Publishing Models, Economics of Publishing, Open Access

Press Release from the American Anthropological Association:

FOR IMMEDIATE RELEASE (PDF)
October 13, 2008

AAA Awarded Planning Grant to Examine Future of Scholarly Journals

The American Anthropological Association (AAA) is pleased to announce today that it has been awarded a $50,000 grant from The Andrew W. Mellon Foundation to conduct preliminary research on the economic issues faced by scholarly society publishers in the humanities and social sciences as consequence of the demand for open access to their peer reviewed journals.

The grant, will provide support for an examination of the publishing programs of  nine social science and humanities societies and the development of an information base from which publishing model options might be derived to assure societies of the ability to sustain their publishing programs in an open access environment.

Work on the effort will begin immediately, with a final report expected to be released in the first quarter of 2009.

“This study is another step in AAA’s effort to better understand the conditions under which the future of our journal publishing program must operate, to learn from the experiences of other social science and humanities journal publishers and to carefully examine the issues, opportunities and problems presented by open access,” AAA Executive Director Bill Davis said in a statement released today.

AAA Director of Publishing Oona Schmid commented today, “Current open access models were developed within the Scientific, Technical, and Medical publishing communities. However, scholarly publishing in the social sciences and in the humanities differs in substantial ways. This study is our first step in understanding these differences, in order to locate a model that supports our discipline fully.”

AAA is joined in this effort by the Modern Language Association, the American Sociological Association, the American Historical Association, the American Economic Association, the National Communication Association, the American Statistical Association, the Political Science Association and the American Academy of Religion, under the auspices of the National Humanities Alliance Task Force on Open Access and Scholarly Communication.

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Scientific publishing might create a winner’s curse

By
Karen Fischer
– November 14, 2008Posted in: Economics of Publishing

By John Timmer, Published: October 13, 2008, Ars Technica News Desk

Scientific publishing may be having some difficulty as a business model, but there are also plenty of questions regarding how well it functions from a scientific perspective. Scientifically, the function of publishing is to get accurate, reproducible information and its interpretations into the hands of the scientific community, and there has always been some debate about whether the peer review and impact factor-driven world of publishing is the optimal way to achieve it. A paper that was published in the open access journal PLoS Medicine has now examined scientific publishing using economic concepts and concluded that the way things are done now is inevitably problematic.

The paper makes what may be its most tenuous claim up front: scientific information can be treated as a commodity. It may be really difficult to put a monetary value on this commodity, but it’s clear that lots of groups—fellow scientists, policy makers, commercial entities—want access to high-quality scientific data. The publishers act as intermediaries in this process, determining what research will grace their pages and attracting “buyers” of the information in the form of subscribers.

The authors argue that this situation makes the publishers, as they try to attract the hottest research to their pages, in a position analogous to bidders at an auction, and the authors analogous to sellers. This is where the economic model comes in. Auction bidders are prone to suffering a “winner’s curse,” where the true value of an item is probably closer to an average of the bids, which means that the winner (the highest bidder) probably offered too much for it. Reality, in the authors’ view, is probably closest to the average of the relevant publications, meaning that any given publication, even one accepted by a prestigious journal, is probably off-base, either subtly or dramatically. By “winning” the right to publish it, the journal gets the winner’s curse. Read more…

To read the PLoS Medicine article, go to:

Citation: Young NS, Ioannidis JPA, Al-Ubaydli O (2008) Why Current Publication Practices May Distort Science. PLoS Med 5(10): e201 doi:10.1371/journal.pmed.0050201

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Access to Legal Scholarship

By
Karen Fischer
– May 29, 2008Posted in: Economics of Publishing, Open Access

For a variety of reasons, legal scholarship is an excellent laboratory for experiments in changing the traditional structures and economics of scholarship. Both open access and informal forms of scholarship have been more readily adopted and more quickly influential in law than in other fields. The unusual structure of most legal scholarship is a partial explanation for these facts, but many of the experiences and observations made in the legal arena offer substantive lessons for scholarship in other fields.

Nowhere are these experiences and observations better synthesized than in a recent article by Richard Danner, Ruffy Research Professor of Law and Associate Dean for Information Services at Duke University Law School. In “Applying the Access Principle in Law: the Responsibilities of the Legal Scholar,” Danner does a superb job of explaining what is unusual about legal scholarship, what the experiences of changing the publication models have been and what needs and responsibilities for individual scholars remain.

One of Danner’s observations particularly struck me when I read this article, and that impression was confirmed by a conversation I had this week with several librarians. Contrary to the oft-repeated claim that open access will inevitably lead to loss of subscription income for publishers, Danner documents the experience of Duke Law School when it moved all of its journals to open access web accessibility. As Danner tells the story, the school had concluded that the expected loss of subscription income would be offset by the values gained from greater exposure to its 6 print journals. But in fact, there was almost no such decline in print subscriptions, even after 10 years of free access. Only one journal showed an overall decline (of about 2%) over that time period, while four showed significant increases in subscriptions. The sixth journal experienced a small increase. Clearly better access leads to subscriptions from readers who otherwise would not have known about the journals, especially the specialized ones, which exhibited the largest increases. This week a librarian I was speaking with confirmed that she had also experienced this unusual form of marketing, when faculty have asked her to subscribe to journals they have discovered through open Web accessibility.

Overall, Danner’s article is a masterful analysis of the structure of publishing in a particular field and how the “access principle,” a concept taken from John Willinsky’s book of the same name, could transform a field of scholarship. In spite of the oddities of legal scholarship, Danner is very successful at offering both an analysis and a call to action that deserve to be translated and applied in other fields.

Kevin Smith, Scholarly Communication @ Duke, May 5, 2008

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Campaign against Open Access and Public Access to Federally Funded Research

By
Karen Fischer
– September 6, 2007Posted in: Economics of Publishing, Open Access, Publicly Funded Research

The Association of Research Libraries (ARL) this week issued a statement criticizing a new initiative in what it called an “ongoing PR campaign” against public access legislation, supported by the Association of American Publishers (AAP). ARL officials said the latest effort, dubbed PRISM (Partnership for Research Integrity in Science & Medicine), “frequently distorts the nature of ongoing and substantive discussions about open access and public access to federally funded research.”

The PRISM web site argues that public access efforts will undermine peer review and harm journal publishers; will open the door to “scientific censorship in the form of selective additions to or omissions from the scientific record”; subject the scientific record to “the uncertainty that comes with changing federal budget priorities and bureaucratic meddling”; and will introduce “duplication and inefficiencies that will divert resources that would otherwise be dedicated to research.”

ARL officials noted that the PRISM arguments closely follow the advice of PR “pit bull” Eric Dezenhall, whom publishers consulted in the last year to develop a strategy for fighting public access legislation. Nature first reported publishers’ plans to launch their PR campaign in January of 2007. ARL officials said the PR campaign offers libraries and researchers an opportunity to engage the campus community “concerning the changes to the scholarly communication” and provides a memo with talking points it hopes will help guide that discussion.

OA public access supporters have already hit the blogs, both dissecting PRISM’s arguments and expressing their displeasure over the coalition’s tactics. Alma Swan, a researcher and consultant specializing in scholarly communication wrote that the PRISM initiative made her feel sad and disappointed. Swan wrote on her blog that “the level of dishonesty and distortion in PRISM’s language,” suggested that “the partners in this ‘coalition’ are just not doing what I had hoped they would eventually do, which is to see clearly and act well.

Library Journal Academic Newswire, Sep 7, 2007

Issue Brief from the Association of Research Libraries

AAP PR Campaign against Open Access and Public Access to Federally
Funded Research: Update re the PRISM Coalition
September 4, 2007

Excerpt:
A new initiative has been announced in an ongoing public relations campaign sponsored by the Association of American Publishers (AAP) against initiatives concerning access to federally funded research (public access) and open access generally. PRISM (Partnership for Research Integrity in Science & Medicine), a new coalition, is attracting substantial criticism from a broad spectrum of researchers. The PRISM message corresponds directly to plans described in internal publisher documents leaked to reporters to “develop simple messages (e.g., public access equals government censorship)” that are aimed at key decision makers.

As news of this initiative evolves, it presents an opportunity to engage in conversations with members of your campus community concerning the changes to the scholarly communication system and how this may affect scholarly journal publishing. This memo provides talking points to assist you and your staff in working with members of your campus community with regards to the recently disclosed publishers public relations campaign against open/public access initiatives and legislation concerning access to federally funded research….

[N]either public access policies to federally funded research or open access journals alter the traditional practice of peer review.

* Peer review is already built into open access journals and to policies concerning access to federally funded research thus showing the fallacy of the predicted demise of peer review.
* The peer review system, based almost completely on the voluntary free labor of the research community, is independent of a particular mode of publishing, or business model.
* Publishers’ own studies have found that open access journals are peer reviewed as frequently as comparable subscription journals.
* The existing National Institutes of Health (NIH) policy and legislation concerning access to federally funded research called for submissions from only peer-reviewed journals and “includes all modifications from the publishing peer review process.”
* Finally, journal publishers do not create the content they publish, nor do they generally pay authors for that content or compensate reviewers for the time they spend ensuring the quality of published research through their contributions to the peer review process. The academy supports and provides the peer review.
* Public access to federally funded research policies proposed to date have all incorporated embargo periods to protect publishers from any rapid shifts in subscription revenues….

PRISM doesn’t speak for Rockefeller University Press

Mike Rossner, Executive Director of Rockefeller University Press, sent the following letter to the Association of American Publishers (AAP):

To the Association of American Publishers:

I am writing to request that a disclaimer be placed on the PRISM website indicating that the views presented on the site do not necessarily reflect those of all members of the AAP. We at the Rockefeller University Press strongly disagree with the spin that has been placed on the issue of open access by PRISM.

First, the website implies that the NIH (and other funding agencies who mandate release of content after a short delay) are advocating the demise of peer review. Nothing could be further from the truth. These agencies completely understand the need to balance public access to journal content with the necessity for publishers to recoup the costs of peer review. After extended discussions with publishers, these agencies have determined that delayed release of content (none of them are advocating immediate release unless publishers are compensated handsomely for such release) is consistent with the STM subscription business model, in which peer review is a basic tenet.

Second, how can PRISM refer to bias when the government is mandating that ALL papers resulting from research they fund be released to the public after a short delay? The major potential for bias by the government and other funding agencies has already occurred when they decide what research to fund (e.g., stem cell research).

Third, PRISM takes issue with government spending on a repository of papers resulting from government-funded research. The government has been forced into this position by those publishers who refuse to ever release most of their content to the public.

Fourth, PRISM maintains that published papers are private property. Most of the research published by STM publishers only exists because of public funding. No public funding – no research,­ no millions in profit. Publishers thus have an obligation to give some of their private property back to the public, on whose taxes they depend for their very existence.

Finally, we take issue with the title: Partnership for Research Integrity in Science and Medicine. The use of the term “research integrity” is inappropriate in this context. The common use of this term refers to whether the data presented are accurate representations of what was actually observed. In other words, has any misconduct occurred? This is not the primary concern of peer reviewers, who ask whether the data presented support the conclusions drawn. It is thus incorrect to link the term research integrity directly with peer review.

I could go on, but I think you will get the point that we strongly disagree with the tack AAP has taken on this issue. We urge you to put a disclaimer on the PRISM site, to make it clear that your assertions do not represent the views of all of your members.

Yours sincerely,
Mike Rossner, Ph.D.
Executive Director
The Rockefeller University Press

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U.S. College Book Price Study

By
Karen Fischer
– September 6, 2007Posted in: Economics of Publishing

This book price compilation, based on books reviewed in Choice during the 2006 calendar year, was prepared under the sponsorship of the Library Materials Price Index Editorial Board of the Association for Library Collections & Technical Services, a division of the American Library Association.

For 2006, the overall average price for books in the Humanities, Sciences, and Social & Behavioral Sciences (including reference books) was $62.15, a 3% increase over the average 2005 price of $60.33. Reference books continued to have the highest average price at $136.85 and the highest percentage increase over the previous year, nearly 11%. Without reference books included, the average 2006 book price was $56.24 or a 3.3% increase over the average 2005 price of $54.43.

Highlights of the Price Study:

Avg. Price per Title
Art & Architecture: $55.45
Language & Literature: $62.81
Chemistry: $110.55
Engineering: $108.70
Health Sciences: $57.19
Physics: $67.93
Business, Management & Labor: $48.49
History, Geography & Area Studies: $54.99
Political Science: $48.11
Psychology: $59.00
Reference: $136.85

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