They said it would never happen — but it just has
May 4, 2012
The speed that things are happening at the moment is astonishing.
Whenever we talk about the economics of open access — when I argue that it costs the community eight times as much to publish a paywalled article with Elsevier as it does to publish it as open access with PLoS ONE — I always hear the same argument in response. And it’s a good argument. It goes like this:
Yes, the total cost to libraries around the world of an Elsevier article may be eight times the cost to the author of publishing an open-access article that is free to read. But you can only expect to save that money if libraries cancel their Elsevier subscriptions and plough that money into funding open-access publications instead. And no library will ever do that, because the researchers that they serve need the subscriptions.
Well, it turns out — somewhat to my own surprise, I’ll admit — that libraries will cancel their Elsevier subscriptions. The Department of Mathematics at the Technical University of Munich has just voted to do exactly that:
Because of unsustainable subscription prices and conditions, the board of directors of the mathematics department has voted to cancel all of its subscriptions to Elsevier journals by 2013.
So what does this mean? A lot of things.
1. This is no idle far-in-the-future threat: 2013 is only one year away! So this is an actual policy. Something that they’re going to do.
2. Universities are not messing about. When Harvard say they can’t afford subscriptions, they probably mean it — it’s not just a negotiating tactic.
3. Where one university department leads, others will probably follow. Maybe initially it will be mostly maths departments in other universities; maybe it will be other departments of the Technical University of Munich; maybe it will be all of Harvard.
4. So far, this announcement is only about cancelling subscriptions and says nothing about open access. If that’s all they do, it will be a mere cost-saving exercise and a missed opportunity. To be truly transformational, the department needs to channel a significant chunk of its subscription savings into funding Gold OA publications.
5. Publishers who are paying attention will surely start to realise that they have pushed their exploitative prices too far, and that they don’t hold libraries in a steely grip any more. I wonder how this will play into investment advice regarding Elsevier?
This isn’t the kind of problem that can be fixed by hiring a PR person. I’ve argued this before, but if Elsevier are going to survive, they’ll need to be much clearer in the their communications, eliminate practices that alienate authors, and ultimately change their business model entirely.
For more on the Munich development (interesting more for the comments they may generate than for carrying much additional information):
Sauropod Vertebra Picture of the Week 
May 5, 2012 at 12:52 am
Tim Gowers, not David Gowers.
[Thanks for spotting that: now fixed — Mike.]
May 5, 2012 at 3:17 am
The flaw in the “researchers need subscriptions” argument is that one can buy access to individual articles (at a loss in convenience, of course). I’m told that this is the calculation the TU Munich math department did, and they decided that while they do need some of the articles, buying the journal subscriptions is not cost effective for them. This is not actually so different from what other universities have done: plenty of universities have decided not to subscribe to certain journals, not because they will never need articles from them, but because they won’t need enough to justify buying them in bulk. The noteworthy part of this case is that it involves all the journals, but that’s because of the back story:
What makes the TU Munich situation particularly dramatic is that they are part of a Bavarian library consortium that expires this year and is being renegotiated this summer for 2013. That put severe constraints on what they could do, since Elsevier is unhappy to have any consortium decrease its spending over time. I haven’t asked them this, but I doubt they could have gotten away with cancelling half of the subscriptions and saving half of the money. In this sort of situation, there are only two choices – negotiate with Elsevier on Elsevier’s terms, or don’t negotiate at all – and they choose the latter.
So I think the big issue here is negotiations for bundling and consortia. What I hope is that this throws a monkey wrench into the negotiations, and that the willingness of universities to do this seriously weakens Elsevier’s negotiating position and leads to lower prices and better terms. The key will be whether anyone else in inspired to take the same approach.
On the other hand, the outcome could be bad. I’m sure not every department in the consortium could do this: for some, and perhaps many, of them it would not be economical to buy articles individually. Elsevier may negotiate very aggressively with the remaining partners in the consortium, basically punishing them for what the TU Munich math department has done. If they get away with that, then it could really intimidate anyone thinking of doing this in the future, so we should all object strongly if it seems to be happening.
I hope the broader community continues to pay attention to this story, since the most consequential part may be what becomes of the Bavarian consortium.
P.S. Your factor of 8 cost comparison for Elsevier vs. PLoS ONE is wrong (even aside from whether PLoS ONE is the right comparison, which I think is questionable). The 240,000 article figure from the Annual Report specifies “science & technology research articles” (page 10). Elsevier distinguishes between their science & technology and health sciences divisions, and they only got 39% of their 2010 revenue from science & technology journals (according to the investor seminar you link to, page 8). This already removes a factor of 2.
May 5, 2012 at 9:46 am
Thanks for commenting, Henry — lots of interesting stuff here.
On the factor-of-eight cost comparison: thanks for spotting a flaw. I’m keen to refine this to be as accurate as possible — you can think of initial estimates as range-finders. I’ll be posting in more detail about this shortly. In the mean time, see this exchange of comments with David Crotty, in which I am not able to get the factor down below four even allowing Elsevier every benefit of doubt.
May 5, 2012 at 2:33 pm
Regarding costs, I’ve just done the analogous calculation for PLoS, and it comes out to $1669 in revenue per article. About 20% of their revenue comes from sources other than publication fees (mainly grants, some advertising and investments), and a fair comparison of total costs of publication should take this into account. On the other hand, publication fees are sometimes waived, so the stated prices will overestimate what authors are paying.
PLoS seems to release financial information for each year the next July, so the most recent PLoS figures available are from 2010 (http://www.plos.org/media/downloads/2011/2010_PLoS_Progress_Update_lo.pdf).
In 2010, PLoS had total revenue of $15.049 million and published 9016 articles, for revenue of $1669 per paper (of which $1330 came from publication fees). If we divide the $10500 for Elsevier by 2 to account for the issue I raised above, then it’s $5250, which is a factor of 3.15 higher than Elsevier. That’s still a huge factor. You’d expect a 1.59 factor to account for Elsevier’s 37% profit margin, so this is an additional factor of nearly 2 even beyond the issue of profit.
On the other hand, it may still not be a fair comparison. 75% of what PLoS publishes is in PLoS ONE, which is really a very different publishing model. For example, they do no copyediting. One can debate how much this matters, but it’s a major expense in preparing a paper for publication. Even if you can’t see the difference in what PLoS ONE publishes (I haven’t looked at enough papers to know whether you can), it’s hard to tell what that means. For example, maybe authors whose papers need a lot of editing are not submitting them to PLoS ONE, but rather to other journals that provide copyediting. Or maybe they are, but they are paying for an English editing service, or they are relying on friends with strong language skills for volunteer copyediting. So it’s possible that by not providing copyediting, PLoS ONE is not actually decreasing the costs to the research community, but rather just shifting them off of their books.
I don’t think there’s enough publicly available data to estimate these effects. My guess (based on what I’ve heard about costs from a smaller publisher) is that the PLoS ONE publishing model would account for much of the missing factor of 2, but it’s not clear how close it might come to covering all of it.
In any case, this doesn’t seem to have much to do with open access per se. Instead, I see three issues: PLoS is not trying to make a profit, they are providing fewer services, and they may be more efficient overall. Disentangling the latter two issues is tricky.
Unfortunately, what makes these sorts of calculations even more of a mess is that other factors start to intervene. It’s not clear that cost per article is really how we should normalize things (it’s just a simple way to assess fees that doesn’t create incentives to write cryptic articles in as few pages as possible). For example, normalizing per article gives a modest advantage to journals with high acceptance rates, since they have to process fewer submissions per published paper. There’s no single, ideal normalization, since some costs arise per submission, some per published article, some per page (or other measure of length), etc.
I completely agree with you that Elsevier’s prices are outrageous, and that the community needs to do something about this. I don’t want to come across as trying to defend Elsevier, just to help add enough caveats that Elsevier can’t complain they are being treated unfairly.
May 5, 2012 at 7:19 pm
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May 9, 2012 at 8:45 am
It might be easy to overestimate the range of this piece of news, since in mathematics the weight of Elsevier is relatively low (especially compared to Springer). When you see a math department cancel their Springer subscriptions, then you can tell something is really happening.
I mainly stress this to say that we cannot consider that things will happen by themselves now, we still need to push hard to make them happen. But I agree it seems the perfect timing to push.