Reed Elsevier: a business model under pincer attack

Robert Andrews highlights the political dangers to the traditional Reed Elsevier business model, by quoting a research note from Berstein Research’s Claudio Aspesi:

We think the risk posed to the Elsevier business model is substantial. We believe investors are underestimating the disruption that both the EC and even the UK policies could pose to the business model of Elsevier…

Being a paid publishing gatekeeper is a very difficult situation to maintain in any field right now. People with the money and time to access printing presses no longer have an advantage. Business models based on that advantage – and make no mistake, that’s what journal publishing is – are in trouble. To have a business model which charges people to both be published and to read the publication is to doom yourself. It’s been a great money-maker for decades, but the game is pretty much up.

But it’s not just that structural change at play here – there’s a political will to break the power of the journal publishers. Andrews:

In July, three UK education research councils and the European Commission announced stipulations that future research partly funded by taxpayers – much of which is currently published through subscription journals – must be made more open-access. The UK government has labelled research “paywalls” “deeply unhealthy”, and wants to free up availability.

And they’re just joining pressure that already exists from the contributors and readers. Andrews again:

Many researchers were already revolting against health and science journal publisher Reed Elsevier for selling bundles of journals containing their work, rather than individual journals, to libraries. Tens of thousands of people signed a petition.

Pressure for government – which funds much of the work published in journals. Pressure from the users and contributors.

Winter is coming…