We should applaud higher profits, not lower profits

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[I was just about to post this, but a similar post was just published by Mike Taylor. I have not ready that carefully yet, but I will publish this quick before I am tempted to change it. ūüėČ ]

In recent years there has been a lot of criticism of the large profits made by publishers. Much of the criticism comes from Open Access “activists” (in the best sense of the word).
And as expected, the bigger publishers (e.g Elsevier, Wiley, Taylor & Francis etc) have been most directly in the firing line. Quite often the publisher is attacked for having larger profit margins than Supermarkets, Apple, etc.

I have a problem with this. Of course¬†no one is in favour of profiteering, but is making profit not a sign of success in a free economy? The very definition of¬†success in a free market is to maximize profits (all else being equal). In fact it is the duty of a company director to maximize the value of the shares in the company. So how can we, on the one hand, ask a company to compete and be commercially successful, but on the other attack them when they are? Let’s look at a hypothetical example‚Ķ

Consider a hypothetical subscription-based publisher, A, which has a 10% profit margin. Let us now assume that A undertakes an effort to increase efficiency through better management and workflow automation. And  let us suppose that they are spectacularly successful, and they manage to:

  • Reduce publication time by 50%
  • Increase accuracy of publications
  • Improve accessibility¬†of PDF files
  • Reduce subscription costs by 20%
  • Increase wages by 20%
  • Increase profits by 20%

Should we now start pelting stones at them because they are making a big profit? I think we should do the opposite and applaud them!

What about Open Access publishers?

If profits are bad, then why are we not attacking Open Access publishers too? How about Hindawi, who make a profit of around 50%? If profits are bad, then Hindawi must be the really bad boys of publishing, but I rarely hear criticism of them. And what about PLOS, who in 2014 made a profit (or rather surplus) of $37m. Are OA publishers exempt from any criticism, however high their profits?

(Full disclosure: I consider Ahmed Hindawi a dear friend, and have lost track of the number of friends I have in PLOS. I am an OA advocate and have great regard for both organizations!)

How we should really judge publishers

Our primary metric for judging publishers should be the following:

  • Cost to subscriber ‚Äď or for OA journals, cost to author
  • Quality ‚Äď including XML (if available), PDF, typography, linking etc
  • Speed of publication
  • Quality of peer review
  • Service to author ‚Äď e.g. support for multimedia, ease of submission, etc.
  • Working conditions and treatment of staff.

To reiterate my point made above, if two publishers score equally on all these metrics, and one is making twice the profit of the other, we should applaud the more profitable one for running a more efficient operation, and we should encourage the other to improve efficiencies, and hence be able to compete better and hence perhaps reduce prices further. Attacking publishers purely for making a big profit does not make sense, without taking other things into account.

Category: Work, Business, Publishing

One comment on “We should applaud higher profits, not lower profits

  1. I agree with all of your points, but we also need to keep in mind the reason why people are more hostile towards profit in scholarly publishing than in other industries and even trade publishing. Scholars rarely write for profit, and most customers of scholarly publications are not-for-profit organizations. Those organizations are starting to set up competing publishing operations that are, if not as efficient, at least cost the organizations less to operate than they are spending for access to content through conventional publishers.