The Cost of Scientific Publishing

Making Money from Academia

How do you make over half a million dollars in profit from a single business deal? Become one of the largest academic publishers in the world. For instance, Elsevier is one of the largest academic publishers, retaining a profit margin of around 38%. That means that every time an academic publisher charges a library $1.7 million for a journal bundle, $676,000 goes straight to the shareholders pockets. Think about that, over half a million dollars made on just one business transaction. You could say that the pockets of Elsevier’s shareholders are pretty deep.

Publishers, like any other business, have the right to make profits. However, a margin of 38% is very high, even in comparison to other commercial publishing companies. To put that in perspective, almost 2/5ths of their revenue is pure profit. In 2012, Elsevier’s 38% profit margin made them $1.2 billion dollars in profit alone.

Manipulation of the Market

Large publishing companies, like any business, try to maximize their profits. The problem is that these large publishers take advantage of their consumers by artificially raising prices. Academic libraries constantly demand research, regardless of price changes. In a market with little competition and high demand, it’s very easy for large publishing companies to extract more money from the libraries than the journals may be worth. Lack of competition and a steady stream of demand allows for the major publishers to collect ample profits. In fact, over 14 years, the price of the journals has increased 260% while the number of subscriptions to these journals has only increased by 14%.

Publishers have raised the prices with little consequence to their business. The inflation of the journal prices are well above the consumer price index and have kept above it for plenty of years. They continue to increase the prices of subscriptions at an artificially high rate. In fact, between 1996 and 2010, journal subscription prices rose at three times the rate of inflation. This exponential jump in price is not sustainable for their consumers.

Who is Paying for All of This?

Here’s the worst part about the academic journal process: publishing companies are making universities pay multiple times for the same research. Universities pay for the salaries of their researchers and cover costs to conduct the research. In addition, they pay the salaries of peer reviewers that work pro bono for journals. Journals do not have to pay a dime to fund the research or to review it, but they maintain the rights to sell it back to the libraries. In other words, journals simply take all the information that universities have funded and then lease it back to the libraries short term.

A large portion of revenues for the publishing companies come from academic libraries, and the majority of the funding comes from both state and federal governments. Academic libraries make up 75% of the revenues for journal companies and the publishers are using these libraries to make a huge profit.

The rising journal prices have been causing plenty of problems in the University system. In order to afford the rising journal prices, either Universities have to cut spending elsewhere (layoffs, freezing pay, change in curricula) or, like Harvard announced in 2012, cut spending to journal subscriptions. These courses of action have negative consequences to the universities.

So, What Happened?

Journal publishing was created to enlighten. It credits researchers and makes information readily available for anyone who desired to expand their knowledge. These publishers use the appeal of copyright laws and prestige to lure the research community to continue buying their journals. They are in the unique position to offer tools that researchers use for promotions, tenure and distinction.

How We Can Fix This

Research should not be thwarted by an industry run on the privatization of information. Instead, it should be enhanced by open access. Open access allows the knowledge of scientific research to be easily accessible to any audience. The open access  movement began 19 years ago with Steven Harnad’s Subversive Proposal. By making published work freely accessible to people, it provides a platform for academics to share their knowledge . This movement has already begun in other countries with mandates for open access in  Belgium, Denmark, Ireland, Iceland, and Australia.

This movement cannot move forward unless we are willing to take a stand on this problem. Every researcher, librarian, university administrator and funding body should promote open access before this movement takes off. Our goal with Banyan is to give everyone an equal seat at the table. We want to level the playing field of research. We invite researchers to use Banyan to recapitulate scholarly communication and expand the distribution of information.

Cheryl AbuMoussa Banyan Intern