Rich Uncle Pennybags

Publishing Science: Impressive Profits from Intellectual Property

Think of an industry reaping boundless profits from intellectual property. In the midst of constant change, a few strong competitors defy the odds and continue to dominate. You might be thinking of software or pharmaceuticals. But in fact, these words describe the business of publishing science.

Perhaps you’ve noticed that things are a little pricey in this realm. If you want to read scientific paper, it will cost you. The price might be 30 or even 50 dollars to read a single paper. And if you think it’s free because you’re a student or faculty member, think again. The university is paying a big price. And the money to pay that bill comes from tuition.

A Booming Industry Dominated by Three Competitors

Three companies – Elsevier, Springer, and Wiley – dominate the market for scientific publishing. Elsevier alone publishes 1.5 million scientific papers per year. Many millions of scientists rely on Elsevier and its competitors to publish their work. Their careers depend upon it. Hundreds of thousands of peer reviewers and editors literally work for these profitable enterprises for free.

Impressive Profits

These days, magazines are lucky to make a profit margin of 12-15%. But the Elsevier profit margin runs more than 35%. That’s higher than Apple, Google, or Amazon. Of course, it’s a niche business. Compared to pharmaceuticals or software, publishing science is a small industry – roughly $25 billion worldwide.

When electronic media threatened other publishers, science publishers didn’t blink. Open access and internet publishing have made no impact on this money machine. Even now, open access publishing accounts for only a quarter of scientific papers.

Elsevier saw that threat early on and countered it. In 1998, the company pioneered contracts with universities to give students and faculty free access to a wide range of journals. It comes at a price. These contracts can cost millions of dollars at a major university.

Writing in the Guardian, Stephen Buranyi describes the success of Elsevier as it acquired competitors and built its dominant position. Said one executive, “Cash just pours out and you wouldn’t believe how wonderful it is.”

A Question of Equity

The work that goes into publishing good science is complex. But it’s based on an even more complex endeavor: scientific research. For the researchers who produce that science, funding is ever more challenging. So it’s ironic that publishers are prospering while most researchers are struggling.

Is this the future for knowledge workers? Will a few private interests control access to the knowledge and intellectual property they create? Will only a very few reap the profits?

Click here to read more from the Guardian.

Rich Uncle Pennybags, Illustration © Lord Jim / flickr

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June 27, 2017

One Response to “Publishing Science: Impressive Profits from Intellectual Property”

  1. June 27, 2017 at 1:51 pm, Karl J. Kaiyala, Ph.D said:

    Thanks for this illuminating post Ted. It is astonishing how brilliantly the scientific publishing realm has managed to game the system in favor of profitability at the expense of working scientists and students. Meanwhile, as you noted, the scientific funding environment is bleak and will get even bleaker.

    I think I just decided to quit reviewing manuscripts; I review two per month, on average, and each entails a good deal of time and thought. Yeah, the hell with that.