In an article that many of you will now have seen, Heather Morrison demonstrated the enormous profits of STM (Scientific, Technical and Medical) scholarly publishers. The figures are taken from her in-progress dissertation which in turn cites an article in The Economist. It all checks out. I emphasise this because I found the figures so hard to believe. Here they are again: profits as a percentage of revenue for commercial STM publishers in 2010 or early 2011:
- Elsevier: £724m on revenue of £2b — 36%
- Springer‘s Science+Business Media: £294m on revenue of £866m — 33.9%
- John Wiley & Sons: $106m on revenue of $253m — 42%
- Academic division of Informa plc: £47m on revenue of £145m — 32.4%
So it’s evident that profits on the order of 35% are pretty typical for commercial STM publishers, and that Elsevier’s figures are not an aberration. Not only that, but all four of these companies’ profits as a proportion of revenue are still increasing — by 2.4%, 4%, 13% and 3.3% respectively. The U.K. Office of Fair Trading noted back in 2002 that “the overall profitability of commercial STM publishing is high, not only by comparison to ‘non-profit’ journals (which is not surprising), but also by comparison to other commercial journal publishing”.
I wanted to be sure that I was assessing this fairly, so I looked through Elsevier’s annual reports for the last nine years — happily, they make them available, if not particularly easy to find. What I found is that they have been consistently bringing in profits in the region of 33% throughout the last decade. Specifically:
- 2002: £429m profit on £1295m revenue – 33.18%
- 2003: £467m profit on £1381m revenue – 33.82%
- 2004: £460m profit on £1363m revenue – 33.75%
- 2005: £449m profit on £1436m revenue – 31.25%
- 2006: £465m profit on £1521m revenue – 30.57%
- 2007: £477m profit on £1507m revenue – 31.65%
- 2008: £568m profit on £1700m revenue – 33.41%
- 2009: £693m profit on £1985m revenue – 34.91%
- 2010: £724m profit on £2026m revenue – 35.74%
- UPDATE (14 March 2012) The 2011 figures are out: £768M on £2058M revenue – 37.3%
(I have not been through the same exercise for Springer, Wiley or Informa, but there is no reason to expect that the results would be any different.)
What does it all mean?
Yes, publishers have a right to make a living. Not only that, but they have a right to make as big a profit as the market can bear (though of course when they form a cartel that distorts the market monopolistically, that changes things).
But here’s what it means to scientists that Elsevier’s profit is 35.74% of revenue:
- When you pay $37.95 to download a PDF from an Elsevier journal, $13.56 of that goes straight into the pockets of Elsevier shareholders.
- When you pay $3000 to have your submission to an Elsevier journal appear as open access, $1072.20 of that goes straight into the pockets of Elsevier shareholders.
- When your library pays $1.7m for a bundle of Elsevier-journal subscriptions, $607,580 of that goes straight into the pockets of Elsevier shareholders.
- When you or your library pays Elsevier $23783 for any reason, that is enough for them fund Representative Caroline Maloney’s $8500 bribe to co-sponsor the evil Research Works Act, out of their profits alone.
You just have to ask yourself whether that’s where you want your money going.