Elsevier Faces More Choppy Water
August 2004

Despite its recent concession granting authors limited rights to self-publish their articles that also appear in its journals, Elsevier’s academic publishing business appears as endangered as ever. Committees of the British House of Commons and the US Congress recently released recommendations to set up free repositories for scientific research articles. These would become free alternatives to high-priced journals and repositories, such as Elsevier’s Science Direct. Both government actions are big boosts for researchers and academic librarians, who have become vocal critics of the pricing policies of scientific journal publishers, especially Elsevier, which is the largest by far.

In July, the U.S. House of Representatives’ Appropriations Committee recommended that the National Institutes of Health be required to provide free access to articles accepted for publication in journals by putting them into PubMed, a free web archive. These recommendations, which would become part of NIH’s 2005 budget authorization, would require NIH to report by December on how it will implement the committee’s recommendations. At almost the same time, the House of Commons’ Committee on Science and Technology released a report urging all UK universities to set up their own repositories where research articles could be made available free of charge on the internet at the same time that they are published in journals.

The UK report was the result of an inquiry into the difficulty academic libraries face in paying for all of the journals they need to meet the needs of their users. Acknowledging that the problem was the result of tight budgets as well as high subscription prices for scientific journals, the UK committee recommended institutional repositories as a low-cost solution. The committee went a step further by recommending that bodies which fund research should require grant recipients to deposit their published works in open repositories and that the government should appoint an authority to oversee the implementation of such repositories and to ensure compliance with the technical standards needed to provide maximum functionality.

The committee said that other actions might be needed in the future, including a shift to an open access model in which journals are published free and authors pay a one-time publication fee. While the business model for open access is not yet proven, it has gained many supporters in academic, research, and government sectors. Journal publishers like Elsevier rely on large subscription fees and have argued that author-funded models won’t be economically viable. Brushing aside journal publishers’ arguments, the report said bluntly, “We remain unconvinced by many of the arguments mounted against it."

The committee’s findings came on the heels of other bad news for journal publishers: The UK's higher education IT body, the Joint Information Systems Committee (JISC), said it would offer a new round of grants to institutions, publishers and scientific societies who want to use the open access model. In its first round of grants earlier this year, JISC provided £150,000 of seed money to several British research institutions as well as the US-based Public Library of Science (PLoS), which was formed explicitly as an open-access alternative to conventional publishers. Meanwhile, Oxford University Press, a traditional journal publisher, has announced that it will switch to an open access model for one of its scientific journals, Nucleic Acids Research, after 32 years of publishing.

As the largest scientific journal publisher, Elsevier has been in an increasingly defensive spot. It’s no wonder, then, that Reed Elsevier’s CEO, Sir Crispin Davis, recently used the company’s internal newsletter to warn that making published content freely available on the internet could “jeopardize the stable, scalable and affordable system of publishing that currently exists." That is a serious problem given the fact that journals and related businesses are large and highly profitable, generating over $1 billion a year in revenues with 32% operating margins. With foes like the British Parliament, the US Congress, and JISC, and a restive customer base, Sir Crispin must be feeling like he’s in need of friends these days.