Cost-cutting librarians and computer-literate professors are bypassing academic journals—bad newsforReed Elsevier.
The Internet's first victim? By John R. Hayes IT'S H.\iw TO lALAGlNK a Sweeter business than publishing academic journals. The editorial content is contributed free of charge by scholars desperate to publish to get tenure. School libraries are automatic customers— professors insist on it. A one-year subscription to Neuroscience, published .24 times a year, costs $3,775. The 34-times-a-year Gene costs $5,500. And Brain Research, at 114 issues a year, costs $14,000. The titles mentioned above are just 3 ofthe 1,100 academic journals published by Reed Elsevier, the largest such publisher in the world. Based in London, Reed Elsevier is a joint venture between Britain's Reed International Pic. and Holland's Elsevier N.V. Neither parent company has significant assets other than their holdings in Reed Elsevier. With total revenues estimated at $5.5 billion this year. Reed Elsevier also publishes professional directories, medical publications and trade magazines. It bought the Lexis-Nexis database business from the Mead Corp. for $1.5 billion in 1994, but academic journals are far and away its most profitable enterprise. On revenues last year of $600 million. Reed Elsevier's academic publishing operation probably earned $225 million before taxes, a pretax margin of nearly 40%. Last year the rest of Reed Elsevier earned 20% pretax on revenues of $4.5 billion. Is the party over.' It may be nearing its end. The Internet is closing in. Two years ago Louisiana State Universit)''s librar)' canceled subscriptions to 1,569 scholarly journals that cost $446,000, of which $88,427 went to Reed Elsevier. In return, 200
Forbes • Decembe
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LSU's libraiy guaranteed copies of in- order anything not available on camdi\'idual articles that any professor or pus directly from the UnCover Co., a graciuate student \\ anted w ithin two Dcnxer-based article retrieval compadays. Over the next year teachers and ti\' that puts tables of contents on the students requested 2,092 articles Internet. UnCo\'er faxes the articles from 936 publications not in the l.si' to professors and students within 24 libran. The library was able to pro- hours. Average cost at LSU: $13 per cure these articles for just S25,000 in article. "We're a little bit ahead of copyright and deli\ en' fees. where the rest of the countiy is This year l.su clitninatcd the libra- going," sa\'s I.SU libraiy's Assistant r\''s intermedian- role. Now some Dean Chuck Hamaker. 10,000 professors and grad students Reed Elsevicr doubts the trend will can log on to the Internet to browse turn into a rout. The professors, it the tables of contents of 17,000 aca- insists, need its products. "Tenure demic journals. With a click they can depends on a peer group saying that a
ABOVE:
Reed Elsevier's Amsterdam cochairman, Herman Bruggink "The market we serve is perfectly happy with the product we deliver."
LEFT:
Reed Elsevier's London cochairman, Ian Irvine "Academics are what they are. They are academics, not publishers."
Forbes • December 18, 1995
for ink-on-paper journals. Publishers who respond slowly may find their lock on the peer review process isn't watertight. Reviewers, unpaid like writers, arc free to work for competitors. As electronic publishing catches on among scholars, new peer review committees are forming to review manuscripts published on the Internet. According to the 1995 Direetory of Eleetronie fournals, the number of electronic journals and newsletters has grown 66% in the past year, to nearly 700 titles. That includes 142 peer reviewed electronic journals, among them Thefournal ofArtifieial Intellijjenee Researeh and Psyeoloquy. Reed Elsevier itself just completed a four-year experiment distributing journals electronically to 17 universities. A handful of universities and corporations now pay to receive and distribute articles electronically. Reed Elsevier sells electronic information for 110% of the price of a print subscription. For 140%, subscribers can get both paper and electronic versions. This kind of mariceting is unlikely to go down well with budgetsqueezed librarians. There's flexibility in the Internet that's lacking in paper-and-ink journals. Four years ago Paul Cinsparg, a 40-year-old high energy' particle theorist at the Los Alamos National Laboratory', wrote a program allowing the 200 or so researchers in his field to post their manuscripts. His [research] product is as good or better archiving and distribution software than anyone else's," says Reed Else- has expanded to include 30 other vier Cochairman Ian Irvine. "The disciplines and subdisciplines in physplace that happens is in the sciendfic ics, mathematics, computational linguistics and other fields where speed journal community'." Maybe, but last year Stevan Har- of dissemination matters. Today 35,000 to 40,000 users pronad, a psychology professor at the Universit}' of Southampton in En- cess up to 70,000 electronic transacgland and founding editor of the jour- tions on his ser\'er eveiy day. In Janunal Psyeoloquy, posted what he tcrtns aiy Cinsparg expects his colleagues to "a subversive proposal" on the Inter- announce plans for a formal electronnet. The proposal would undermine ic peer review process. That, he becommercial publisbers by having aca- lieves, will eliminate the key advandemics post their working manu- tage of the print journals in his field. If he's right, the journal most at risk scripts and, later, their finished, peer reviewed articles on the Internet. is Nuelear Physies B, a $10,775-a-year That, Harnad believes, would force Reed Elsevier publicadon. "We're publishers to embrace the faster, less asking our publishers, 'Why do we expensive world of electronic publish- need you?' " says Cinsparg. "I'm ining. Turnaround time on an electron- terested in seeing the whole system ically published manuscript is about [of commercial academic publishing] IH three months, versus up to two years collapse." 201
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