EXANE : alerts document -- EU statement on Open Access: another damp squib

“Yesterday, the EU Commission published its Open Access policy for the 2014-2020 period The EU Commission has expanded an Open Access (OA) pilot initiated in 2007 from 20% to 100% of its c.EUR12bn annual funding for public research under Horizon 2020. From 2014 onwards, grant holders will be asked to publish their articles in a Gold Open Access format or, alternatively, to deposit their articles in an OA repository after an embargo period of six months for hard sciences and 12 months for social sciences. In our view, this policy is unlikely to have any impact on STM publishers’ revenues in the next ten years. The EU is a small player in global research funding — it funds an estimated 8% of all public research spending in the EU27, or less than 3% of global scientific literature. We estimate that its funds lead to the publication of around 70,000 articles annually out of more than 1.5m globally. In addition, we note that the pilot project covering 20% of the EU research budget did not have any impact over the last five years. The new policy will apply to grants awarded from 2014 onwards (and hence on articles published from 2016 onwards) and reach 100% compliance only in 2020. The current compliance ratio on older mandates (NIH, Wellcome) is below 60% as scientists do not see it as their role to self-archive their articles. Finally, while gold OA fees (paid by authors) are eligible for reimbursement by the EU, we believe that — like in the UK — the absence of dedicated funding for OA fees is likely to slow down the take-up of that scheme... These developments are in line with our DCF assumption, which sees OA dominating in 2022 and having no impact before. Even in an OA-dominated world, publishers would continue to generate profit on the value they add to scholarly communications (managing the peer review process and article formatting). In an unlikely worst-case scenario, where the OA pricing pressure is not offset by volumes – Elsevier currently monetizes only one-third of the articles it receives as two-thirds are not accepted for publication – we estimate the market is missing at least 50p per share of value for journal assets. We remain Outperform ahead of likely solid H1 12 results due on 26 July.”