What’s the Real Value of a Scholarly Publication? Part I

I’ve been invited to a very timely meeting in Oxford next week to discuss the future of Scholarship. “Open Science and the Future of Publishing” http://www.evolutionofscience.org/webFlyer.pdf . The question I want to ask is (roughly):

“We the public pay 10 billion USD annually in journal subscription fees [*] and 200 billion USD for research; what value do WE get? And what value do WE lose by closed access?”

[*] throughout this post I use guestimates which are probably off by half an order of magnitude either way (i.e. factor of 3). This is partly because much of the information is secret (and some so secret that you will be sued if you divulge it) and partly because academia and we the public don’t yet care enough to find out. I am also removing CC-BY publications from the argument to avoid having to say “except for CC-BY” all the time. It’s about 5% of the market, if that. So I’d like your help.

I am also working this up for a (unfortunately virtual) presentation I am giving in Poland next month. I am taking my text from Wikipedia: http://en.wikipedia.org/wiki/Value_%28economics%29 (This is 6 years old and not disputed so I take it as more-or-less correct. If anyone can fault this, we shall all benefit)

Let me tackle COST and PRICE first.

The COST to the public purse of scholarly publishing is of the order of 10 billion USD. There are also contributions from industrial subscriptions, and from student fees, and 1% from pay-per-view, but the bulk is from taxpayers. In return for this the public get virtually no value or rights. If you the public, you the government, you the NHS want to read a paper you either have to pay again or walk to St Pancras and read it in the British library premises (you cannot get this online because of publisher restrictions – mad and sad but true. The BL even charges me to read my own CC-BY papers if I’m not at St P.).

This is set by the PRICE of electronic journals. This bears no relation to the COST of production. The cost of production can be very low. It’s USD 7 for ArXiV (not peer-reviewed) and about 100 USD for Acta Cryst E (a very high-quality peer-reviewed data journal). In an efficient organisation it’s inconceivable that the COST of production of a journal article is more than 200 USD. Any higher PRICE comes from the following:

  • The ADDED_VALUE that the publishers assert they add
  • Inefficiencies (often gross) in the publishing system. (For example almost all author manuscripts are retyped from scratch).
  • Profits

Publishers like Nature estimate costs-per-paper at 20,000 USD. That is not related to the cost of production but something else. Perhaps the high rejection rate? The basis of these “costs” is kept highly secret.

The PRICE of pay-per-view articles (about 35 USD for one day’s rent) is the only part with real elasticity http://en.wikipedia.org/wiki/Elasticity_%28economics%29 . The only evidence I have is from my FOI requests to Oxford/Cambridge University presses (they are public organizations, parts of the Universities, so have to reply – if you want publishing facts consider University presses).

CUP:  [http://www.whatdotheyknow.com/request/88390/response/224094/attach/html/2/FOI%202011%20236%20Murray%20Rust%20response%20letter.pdf.html ]

In 2010, 13,646 articles were purchased as PPV. In 2010, the total number of articles for potential purchase via CJO was 680,000.  Revenues from PPV approximated to 1.3% of Journal subscription revenues in 2010. 

OUP [http://www.whatdotheyknow.com/request/85085/response/214837/attach/html/2/Murray%20Rust%20Reply%20OUP%20PPV.pdf.html ]

 In 2010, 37,157 PPV articles were purchased [OUP do not know how many purchasable articles they publish]  PPV represents around 1.5% of total journal subscription income. 

I take heart from the consistency of the figures (TWO coincident points!) and surmise that other publishers get 1.5% of their income from Pay-per-view. It’s possible, but unlikely, that the large profits of other publishers comes from Pay-per-view but I and you will doubt that. It’s clear that the price is far too high and it amazes me that publishers still use these levels which were – I assume – set by the cost of paper in interlibrary loans. I’m no economist, but it’s actually stupid to run these prices . If they cut their prices to a fifth – 7USD – and gained 5 times more custom they’d still make the same income, incur no more costs (really!) and gain a great deal of goodwill. And even if they gained no more readers they’d only have lost 1% of their income. But they probably know something about a small subset of customers who have to use this service and they don’t care about everyone else. Which is also inelastic.

If any closed access publisher can give figures here we’d be delighted.

It’s also a serious condemnation of the effort to promote scholarship. Only 2% or all articles are ever purchased each year. I imagine the 680,000 includes historical articles, and if we take this as 50 years, then each modern article is purchased about once each year. Which shows that it’s value to the public is almost zero.

We now need to establish the cost of public (include charity) funded research. I have asked many times without finding authoritative results. So here’s a beer-mat calculation, and allow +- half an order of magnitude. I approach it from these directions:

  • Wellcome Trust allow about 2% of a grant to cover publishing. So if scholarly publishing is USD 10 billion, then public research is 500 billion USD
  • The income for Cambridge, Stanford, etc is ca 500 million. Assume 1000 research universities in the world (can anyone do better?) and a power law and we get ca USD 200 billion
  • The NIH is funded at USD 35 billion. It’s probably the largest, but add in national funders and you are well over USD 100 billion

Let’s use a figure of USD 200 billion (though I am sure it’s higher).

I’m now using VALUE in the sense (from Wikipedia):

Value in the most basic sense can be referred to as “Real Value” or “Actual Value.” This is the measure of worth that is based purely on the utility derived from the consumption of a product or service. Utility derived value allows products or services to be measured on outcome instead of demand or supply theories that have the inherent ability to be manipulated. Illustration: The real value of a book sold to a student who pays $50.00 at the cash register for the text and who earns no additional income from reading the book is essentially zero. However; the real value of the same text purchased in a thrift shop at a price of $0.25 and provides the reader with an insight that allows him or her to earn $100,000.00 in additional income is $100,000.00 or the extended lifetime value earned by the consumer. This is value calculated by actual measurements of ROI instead of production input and or demand vs. supply. No single unit has a fixed value. Value is intrinsically related to the worth derived by the consumer. [Burke(2005)].

And asking “What VALUE do the public get for their 200 billion dollars?”


“what extra VALUE would they get if the research was published openly?”

And again, if you have insights let me know.