Economics of Publishing Category


New York Times article on scholarly journals & open access publishing

An article in the New York Times of September 18th describes growing resistance to high-cost, commercially produced journals. It opens with the following: 

After decades of healthy profits, the scholarly publishing industry now finds itself in the throes of a revolt led by the most unlikely campus revolutionaries: the librarians.

Primary focus is the pushback in the UK to package deals with Elsevier and similar publishers, and the growth of open access publishing. The article quotes Sir John Daniel, president of the Commonwealth of Learning:

“I’ve seen it from both sides,” said Sir John, who was once briefly on the board of Blackwell. “I saw the vast industry built up from publicly funded research, and it was never clear to me what value was being added. But if you needed the material, they had you over a barrel.”

His view that open access scholarly publishing is a matter of international justice has become increasingly influential.

The UI Libraries plan to observe open access week, which this year begins on October 24th.




The Georgia State filing – A declaration of war on the faculty?

In another blog post on the Georgia State e-reserves case, Paul Courant, University Librarian (and former Provost) at the University of Michigan, argues that the plaintiffs (Cambridge & Oxford University Presses plus Sage, supported by the Copyright Clearance Center) have crossed the “boundary from adversary to enemy.” Two paragraphs quoted below–for the entire post, see

The plaintiff’s draft order applies formally only to Georgia State, but if the Court grants the plaintiffs what they seek, the result will be, in the words of Duke University’s Kevin Smith, “a nightmare scenario for higher education:” fair use would be destroyed, university faculty, students, and staff would be subjected to outrageously restrictive copyright policies, and every university would be required to hire a squad of copyright cops to ensure that faculty do the publishers’ bidding. And while it’s not an uncommon strategy to ask for far more than you expect to receive in a negotiation, which this proposed injunction surely is, your “highball” offer is certainly something that you wouldn’t mind having. What the plaintiffs are saying is that they are quite willing impose enormous costs on academic performance and academic freedom in exchange for higher profits. This is not the request of a friendly adversary; this is the attack of an enemy. (Yes, academic authors would also receive some financial benefit, but note that the typical split for incremental revenue is around 90-10 in favor of publishers, and that the additional revenue that publishers would receive under the plaintiffs’ draft order would be obtained NO additional cost incurred by the publishers beyond cashing checks and paying their lawyers.)

As a faculty member, I do not know that I could comply with the restrictions in the proposed injunction for using copyrighted material in my classroom; they are too onerous and much too expensive. As an author and an educator, I have a great respect for copyright law, and I believe in a balance between creating incentives for authors and promoting the ”progress of science and the useful arts.” The proposed injunction does not strike that balance; it unreasonably restricts access to copyrighted works, eliminates fair use, and will force professors to spend much of their time in an exercise of copyright self-censorship. Imagine that if every time you wanted to quote from a text, show an image, or distribute a handout to your students you had to seek the approval of the University Copyright Police; the consequences would be dramatic. (Lest you think I am exaggerating, check out the form that, were the publishers to have their way, faculty would have to fill out every time they put copyrighted works on electronic reserve.


“Of goats and headaches”–The Economist on journal publishing

The Economist takes note of the economics of scholarly journal publishing in a short piece, necessarily oversimplified, but catching the essentials. See “Of goats and headaches–One of the best media businesses is also one of the most resented”



Lawrence Lessig on science publishing & free (open) access

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.



Commercial Publisher Financial Results

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” (


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.


  • 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).


“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”


Impact of Economic Downturn on Professional and 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.


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

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)


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.


University Presses Find Strategies to Survive Economic Crisis

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


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

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.”


AAA Awarded Planning Grant to Examine Future of Scholarly Journals

Press Release from the American Anthropological Association:

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.


Scientific publishing might create a winner’s curse

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