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Wednesday, July 02, 2008

Nature News looks at PLoS' finances

Declan Butler, PLoS stays afloat with bulk publishing, Nature News, July 2, 2008.  Excerpt:

Public Library of Science (PLoS), the poster child of the open-access publishing movement, is following an haute couture model of science publishing — relying on bulk, cheap publishing of lower quality papers to subsidize its handful of high-quality flagship journals.

Since its launch in 2002, PLoS has been kept afloat financially by some US$17.3 million in philanthropic grants. An analysis by Nature of the company's accounts shows that PLoS still relies heavily on charity funding, and falls far short of its stated goal of quickly breaking even through its business model of charging authors a fee to publish in its journals. In the past financial year, ending 30 September 2007, its $6.68-million spending outstripped its revenue of $2.86 million, according to the publicly available accounts.

But its financial future is looking brighter thanks to a cash cow in the form of PLoS One, an online database that PLoS launched in December 2006. PLoS One uses a system of 'light' peer-review to publish any article considered methodologically sound. In its first full year of operation in 2007, PLoS One published 1,230 articles, which would have generated an estimated $1.54 million in author fees, around half of PLoS's total income that year. By comparison, the 321 articles published in PLoS Biology in 2007 brought in less than half this amount....

From the outset, the company consciously decided to subsidize its top-tier titles by publishing second-tier community journals with high acceptance rates that would be cheaper to produce....

“If the original model was to be self-sustaining through author fees, it seems that PLoS is not even half-way there,” says Bernard Rous, deputy director of publications of the Association for Computing Machinery, the world's largest educational and scientific computing society. Nevertheless, Rous endorses PLoS's strategy of tapping multiple revenue sources and cross-subsidizing to allow open access to all its titles....

“It's fair to say that the community-run journals, including PLoS One, are contributing very well to our overall financial picture, says Peter Jerram, chief executive of PLoS, adding: “PLoS is on track to be self-sustaining within two years. In the interim some philanthropic support will be needed....

BioMed Central has an estimated annual revenue of around £10 million ($20 million). It is already “pleasantly profitable”, according to a science-publishing consultant who asked to remain anonymous. “BioMed Central knows well that much of the journal middle order is more profitable than the great brands because of the lower editorial costs and the cheaper marketing costs for bundles of journals. I suspect that PLoS One is a result of learning the same lesson,” adds ["a science-publishing consultant who asked to remain anonymous"].

BioMed Central is now up for sale, which will be a “fascinating first market test of what people will pay for an open-access company”.

Comment.  Declan Butler last used tax records to investigate PLoS' finances in June 2006.  See some of the comments (first set, second set) generated by his investigation.

Update.  The story has now triggered a large number of comments (scroll to the bottom of the page).  Also see blog comments by Charles Bailey, Mike Dunford, Jonathan Eisen, Timo Hannay, Alex Holcombe, Bill Hooker, Lars Juhl Jensen, GrrlScientist, Greg Laden, Anders Norgaard, and John Wilbanks.