Great news! 44% of libraries will save money from Green OA!

June 2, 2012

An article in Times Higher Education tells of a new report, The Potential Effect of Making Journals Free After a Six Month Embargo, prepared by Linda Bennett of Gold Leaf for the Association of Learned, Professional and Society Publishers [ALPSP] and our old friends The Publishers Association.

And this report contains very good news. They contacted 950 libraries around the world to ask what effect Green Open Access mandates would have on them, getting 210 replies of which 185 pertained to science holdings. Of these replies, 10% said they would cancel subscriptions for all journals whose articles were freely available after six months, and another 34% said they would cancel some journals. So in total, that means that Green OA mandates, such as the ones that the current White House petition advocates, would allow 44% of science libraries to save money on subscription — money which can be reinvested in staff, in technology, in development of new discovery systems, and more.

Thank you, publishers, for giving us this valuable information!

Two things puzzle me, though.

First, there seems to be a typo in Section VII, Recommendations, of the report. It says “It is strongly recommended that no mandate is issued on making all or most journal articles available free of charge after a six month embargo”. Looks like the word “no” was accidentally substituted for “a”. Because the obvious conclusion from the information in the report is that, for the sake of libraries, universities, the economy and citizens, open access should be implemented as quickly as possible.

Second, I don’t understand why the Times Higher Education article says that the report claims open access will bankrupt publishers. To assess that claim, let’s take another look at our buddies Elsevier. Their 2011 profit, remember, is 37.3% of revenue. Suppose 10% of their libraries cancelled all subscriptions — let’s pessimistically assume that that would cut off 10% of revenue. (That’s unrealistic because the big libraries that bring in the big bucks are not the ones likely to cancel, so the 10% of subscribers they lose would likely be the Little Guys; but let it slide.) Of the 34% that said they would cancel some journals, let’s assume an (again pessimistic) average cancellation rate of 50%: so Elsevier would lose another 17% of their revenue. In total, then, they’d lose 27% of revenue. That would bring them down to revenue of only £1502M. Assuming (again pessimistically) that they were unable to cut their costs now that they’re not serving those libraries, costs would stay at £1290M, meaning that their profit margin would be cut to 16.5%. Less than pharma and banks, but more than financial services, software, telecomms, or food & drink; and less double what oil & gas companies make.

So with all that taken into account, here is my gift to publishers: a corrected page 33 of their report:

VII. Recommendations

1. It is strongly recommended that a mandate is issued on making all or most journal articles available free of charge after a six month embargo.


4 Responses to “Great news! 44% of libraries will save money from Green OA!”

  1. FA Says:

    The THE piece opens with the sentence: “Publishers of humanities and social science journals could go bankrupt if all academic papers became freely available after six months”, which, if I look at the report, is perfectly defensible.

    The graph you reproduce is for STM publishers, the relevant graph underpinning the THE conclusion is graph 2b., which shows that 72% of libraries would cancel all or most of their holdings in AHSS fields.

    The rest of your calculations are rather meaningless given this basic error.

    I understand it’s entertaining ranting at publishers – an easy target if ever there was one – but perhaps it’s worthwhile slowing down a bit and considering that there are fields of study outside biology and perhaps the same solutions will not work for all of them.

  2. Mike Taylor Says:

    Who’s ranting? I am congratulating them for this report.

    Graph 2b does not show what you say it does, by the way. It shows that 65% of libraries would cancel some or all of their AHSS subscriptions.

    That’s what would happen (or, at least, what publishers claim would happen) if a Green OA mandate were introduced for arts and humanities research. But no-one has suggested such a mandate, perhaps because everyone involved does understand that there are fields of study outside biology and the same solutions might not work for them. The FRPAA is about scientific research — look at the list of federal agencies that would be affected. The White House petition is also explicit: “we urge President Obama to act now to implement open access policies for all federal agencies that fund scientific research”.

  3. Mike Taylor Says:

    By the way … not that this affects the validity of “FA”‘s comment one way or another, but I note that it was submitted anonymously from an IP address in Holland. Now, can we think of any big Dutch companies that might have an interest in these matters? Maybe “FA” would like disclose his or her true identity?

  4. Charles Oppenheim Says:

    Elsevier can indeed afford such a cut in subs, but what about the smaller publishers of Sci/Tech journals, including scholarly societies, who operate at much lower (or zero) profit margins, or use any profits to subsidise worthy scholarly activities? These comprise the bulk of the membership of ALPSP, and may may well suffer.

    I’m pro mandates, but we should be honest and accept that some smaller sic/tech publishers could go to the wall as a result.

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