The obscene profits of commercial scholarly publishers

January 13, 2012

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.

About these ads

Share this:

  • Facebook
  • Reddit
  • Twitter
  • Google
Posted by Mike Taylor
Filed in open access, rants, stinkin' publishers
102 Comments »

102 Responses to “The obscene profits of commercial scholarly publishers”

  1. spacer Anne Jefferson Says:

    January 14, 2012 at 11:44 am

    Almost enough to make me want to be a shareholder.

  2. spacer Bjoern Brembs Says:

    January 15, 2012 at 2:27 pm

    Excellent rant! See mine on the same topic:
    bjoern.brembs.net/comment-n820.html

  3. spacer David Says:

    January 15, 2012 at 10:51 pm

    should we as authors get more royalties? should universities who pay our wages be paid for the time we spend for peer-reviewing articles and book proposals (usually for free or for very symbolic sums)? we are assessed on publications in rated journals, so we have to continue publishing here; where we can effectively do something is in the peer reviewing process. An article review takes me about 2 to 3 hours, let’s ask for 50 dollars, or 100 dollars per review for commercial publishers

  4. spacer Paul Says:

    January 16, 2012 at 3:37 am

    Forgive my ignorance, but none of these publishers are geared to return any of these super profits to authors are they? I know that being paid royalties for scholarly publications is a contentious issue, however incredible profits are being made regardless. I just find it curious that when decent sums are being paid for copies of your work, you as the author see 0% of that. In fact, I believe it usually COSTS authors to publish in these journals (i.e. purchasing images for the papers, purchasing copies of the journal itself, etc). I’m admittedly green to the world of academic publishing so I’m sure there’s a good reason for this that I’m not aware of – I’m just interested as to what it is.

  5. spacer Bjoern Brembs Says:

    January 16, 2012 at 5:23 am

    @Daniel: No, we need to figure out a way to change our system, such that what we publish again becomes more important than where we publish!

  6. spacer Mike Taylor Says:

    January 16, 2012 at 7:59 am

    You are right, Paul and David, that it is vanishingly rare for academic authors to be paid for the journal articles that they write. I have never heard of this happening, in fact, and I’d be interested if anyone knows of any special cases where it has happened.

    But I am OK with that. On the whole, writing papers is part of what academics get paid their salary for, so there’s no particular reason whey they should get paid twice. (Again, there are exceptions: people like me research and write in our spare time just because we like to; but there’s no reason anyone should be obliged to pay me to do what I choose to do anyway.)

    But it certainly wrong that journals which assume ownership of the papers also charge authors. As you know, I would rather that publishers never take copyright, but if they are going to do that, then they most certainly need to provide something in return, and at the very least that something should include not charging the authors for the privilege of giving them free content.

    On being paid for peer-review: I half-facetiously suggested this in my Times Higher Education piece, but more as a deterrent than as a source of income. If we were to charge a realistic consulting rate to publishers, then $100 for 2-3 hours’ work would be far too low, and something more like £100 ($150) per hour would be more reasonable — something in the same ball-park as commensurate professionals like lawyers and physicians. But, really, the progress of science is better served by sweeping commercial considerations as far out of the way as possible, and just considering reviews as one part of the way we contribute. Just so long as we are contributing to science rather than to Science!

  7. spacer Mike Taylor Says:

    January 16, 2012 at 8:01 am

    Oh, and Anne Jefferson wrote:

    Almost enough to make me want to be a shareholder.

    If you can get in, make a profit in the next year to eighteen months and get out again, then maybe. But I think that all academic publishers in the sciences are heading for an almighty crash as the simmering indignation of researchers rises towards boiling point. If I had Elsevier shares, I’d be selling them, not buying more.

  8. spacer Bjoern Brembs Says:

    January 16, 2012 at 8:34 am

    @Paul: the only reason why this system exists today is history: it once made sense to outsource publishing to people with printing presses. Now that nobody really reads paper papers any more, the reality has changed but the publishers use their profits to prevent modernization of scholarly communication (which most likely would force them out of business). See also my post linked above for more details and background.

  9. spacer David Says:

    January 16, 2012 at 8:48 am

    As an author, I do get royalties for my books, though this is not much (may 200-300 pounds a year per book). I do not get royalties for articles. But I am evaluated by the number of articles I publish in A or B rated journals. The ratings are those by the European Science Foundation. Initiatives like HAU and other open access journals change here the game, but only at the medium term. For the moment all their authors are high profile academics with permanent senior jobs who certainly have time and freedom to publish wherever it pleases them. If I were to submit an article for HAU (which I will enthusiastically do whenever I have something appropriate), I will have to explain this to my management and also consider that this publication will be “lost” in terms of my evaluation as a researcher – as long as HAU does not have a rating of its impact factor.

    And: Let’s not pretend to live in a bubble – some kind of idealised commerce free community which is only made possible by commerce and the system of capitalism. My point is: If we work we should be paid appropriately, or work for no cost if the project is a non for profit. I have no problem with either. If Elsevier really makes such huge profits, they should be held responsible for costs such as those of peer reviewing. That’s why my claim to 100 dollars per review (I work on a Portuguese pay roll =) considerably lower than a british or US american one)

  10. spacer Cut Flesh from the Bone – big publishing profits « trinketization Says:

    January 16, 2012 at 9:06 am

    […] Read the comments on this piece too – here. […]

  11. spacer Mike Taylor Says:

    January 16, 2012 at 9:06 am

    David,

    In Portugal, do lawyers work for $33 per hour?

    Don’t underestimate the value of the work you do in peer-reviewing. The expertise that you bring is the result of (most likely) six to ten years’ training in a batchelor’s degree and then a doctorate, plus the extensive experience and relevant knowledge you’ve accumulated since then. If the professional-grade work that you do is going to be charged at all, it should be charged at a rate in keeping with that training and experience, just it is with other professions.

  12. spacer Bjoern Brembs Says:

    January 16, 2012 at 9:13 am

    The commercial publishers have been increasing subscription rates at about 400% the inflation. Even if we ask for reviewer compensation, why shouldn’t they just add these costs to their subscription rates?

  13. spacer Links 1/16/12 | Mike the Mad Biologist Says:

    January 16, 2012 at 10:17 pm

    […] costs of unemployment – again The obscene profits of commercial scholarly publishers (powerful context at the end, although why is no one mentioning that Darrell Issa, the leading […]

  14. spacer steve cohen Says:

    January 17, 2012 at 1:11 pm

    The Lead Story in the Science section of today’s NY Times is “Cracking Open the Scientific Process.”

    tinyurl.com/794zlur

  15. spacer STEPHAN PICKERING Says:

    January 18, 2012 at 6:58 am

    Shalom & Erev tov, Mike…you might wish to peruse a parallel paper…Thomas Lin, 2012. Cracking open the scientific process. Driven by the Web’s collaborative potential, many want to replace an age-old (and costly) system of submitting private research to commercial journals. THE NEW YORK TIMES, 17 January:D1, D4

    STEPHAN PICKERING / Chofetz Chayim benAvraham

  16. Oppose SOPA, PIPA and the RWA | The Reinvigorated Programmer Says:

    January 18, 2012 at 10:29 am

    […] threat is the Research Works Act (RWA), by which scholarly publishers like Elsevier (with its 36% profits as a proportion of revenue) hope to claw back total ownership of federally funded research.  The […]

  17. spacer SOPA, the Research Works Act, and Relative Evil « The Bite Stuff Says:

    January 18, 2012 at 12:53 pm

    […] Dr. Mike Taylor (University of Bristol, Bristol, England, United Kingdom) of SV-POW! (see here and here) to oppose another US bill, HR 6399, the Research Works Act, which attempts to overturn the NIH […]

  18. spacer Wyatt Clark Says:

    January 18, 2012 at 4:53 pm

    Great post. This makes me curious what the profit margins of open access journals like PLoS are.

  19. spacer Mike Taylor Says:

    January 18, 2012 at 5:06 pm

    PLoS are very transparent about their financials, in keeping with their general ethos of openness. You can find their annual reports and their tax returns (most recent: 2010) on their Progress Updates page. For 2010, the total operating revenue was $12.995M, yielding a profit of $785k — 6% of revenue. This was the first year that PLoS turned a profit, but then it’s such a young organisation that it’s not had a chance to get into a stable financial routine yet. (It’s hard to believe it only started in 2003, and PLoS ONE didn’t launch until 2006!)

  20. spacer Wyatt Clark Says:

    January 18, 2012 at 5:23 pm

    Thanks for the information. Having published in PLoS I am happy to see that their profit margins aren’t as ridiculous as other publishing groups. There is absolutely no reason Elsevier should have a 33% profit margin. I hope universities can use this data to better negotiate with these companies.

    That being said, the way the scientific publishing world currently works there is a trade off between paying to have your article published in an open access journal, or not paying to have an article published as non-open access. I know a lot of people who would love to publish every single article in an open access journal but don’t have the funding to do so. I’m not sure what the alternative to authors paying for this is. Lord knows I’d hate to see banner adds at PloS CB.

  21. spacer Bjoern Brembs Says:

    January 18, 2012 at 5:29 pm

    Actually, PLoS is a non-profit organization, so any surplus is invested immediately: A tax-exempt, 501(c)3, nonprofit corporation headquartered in San Francisco, California (Federal Tax ID 68-0492065) www.plos.org/about/what-is-plos/
    So there are no PLoS shareholders laughing all the way to the bank…
    Currently, the bulk of the revenue comes from PLoS One and I have the impression that they’re using the funds to try and keep up with the growth. IMHO, if this continues and prevents innovation, PLoS has a problem. But so far all looks well.

    Indeed, it is an interesting experiment and it will be exciting to see how far this experiment can scale.

  22. spacer Matt Wedel Says:

    January 19, 2012 at 2:11 pm

    That being said, the way the scientific publishing world currently works there is a trade off between paying to have your article publish

gipoco.com is neither affiliated with the authors of this page nor responsible for its contents. This is a safe-cache copy of the original web site.