Patent Baristas

A recent Wall Street Journal article profiled the wrangling between publishers of scientific journal and academics over so-called open-access journals. That is, many researchers would love to abandon expensive journals from publishers in favor of web-based journals and databases that offer free research articles.

The WSJ depicted this as “a raging Internet-era debate about who should control information and what it should cost.” The reality is not quite just a control issue. Faculty members are now trying to compete against publishers with free or inexpensive journals of their own. Two UC scientists even organized a world-wide boycott against a unit of Reed Elsevier, protesting its fees.

For a bit of perspective now. This is a big expense — a $5 billion global market. For just the 10-campus University of California system, this represents a $30 million a year expense on scholarly periodicals. As we wrote about in an earlier post, this issue came to a head last year when the National Institutes of Health proposed that articles resulting from NIH grants be made available free online. That prompted protests from Reed Elsevier, John Wiley & Sons Inc. and several nonprofit publishers such as the American Diabetes Association, which argued such a move would hurt their businesses. The NIH retreated and in February made the program voluntary.

I’m a big fan of Paul Kedrosky’s blog, Infectious Greed, and his “musing about the money culture”. Kedrosky had an interesting post recently on this debate where, from his point of view, this has less to do with a high-minded, “science can only advance when information is freely available” (an open-source mindset) than the less high-minded perspective that cash-strapped universities want to use a wedge issue “to solve a problem that they created.” That is, universities insist that faculty seeking tenure have to publish in top-tier journals, which begat journals ratcheting up subscription prices, knowing that universities had created the requirement that they publish in these top-tier journals. Now, universities would like to cut back on this Frankenstein’s monster.

I think that the reality is somewhere between the two. For publishers, the process of selecting and editing journals is expensive but is a necessary filter to help sort out the wheat from the vast amounts of research chafe. The nonprofit publisher of the prestigious Science magazine makes content available free after 12 months. Other publishers note that with a combination of free abstracts, free distribution to the developing world and public-library subscriptions, much of the globe already has access to what they produce.

But, let’s be honest here — Elsevier’s scholarly journals bring in about $1.6 billion in annual revenue with an operating-profit margin of about 30%. OK, raise your hand if you would like to see your business maintain an operating-profit margin of 30%. Now put them down.

While one could argue that all articles should be published and the public (scientists) can figure out the genius from the quack, it is the vetting of articles through the peer-review system that provides real value. At some journals, less than 10% of submitted articles make it into a publication. This lends real authority to the work and, often, is the only way to gain tenure. But this vetting costs real money. The WSJ notes that Science gets 12,000 submissions and publishes 800 articles a year on a $10 million editorial budget. That averages more than $10,000 per published article, although typical per-article costs are between $3,000 and $4,000. So, what’s the solution? Competition.

Only through innovative business models and Internet-based alternatives can pressure be applied to drive down the costs of publications. For example, Harold Varmus, a Nobel laureate and former NIH director, has co-founded Public Library of Science, offering open-access journals. PLoS charges authors a fee of $1,500 for its first peer-reviewed journal, PLoS Biology, and also distributes its contents free on the Internet. But this battle is not over as publishers are lowering their fees in an attempt to keep universities from revolting – the UC System negotiated a 25% price reduction.

Get ready to rumble!