Gold Open Access Mandates May Be Associated with Publisher Revenue Losses and Library Cost Increases
A recent analysis outlining alternative scenarios for the publishing market development in the United Kingdom (UK) suggests a strong likelihood of lose-lose outcomes for publishers and universities for mandate-driven transitions to Open Access.
According to a report, published by FTI Consulting in February 2021, the implementation of the Open Access policy proposed by the UK Research and Innovation (UKRI) body to take effect after 2021 is likely to have a significant negative impact on UK journal publishers in the following 5-year period, such as estimated yearly industry-wise losses of 292 million GBP. The UKRI Open Access policy is also expected to make scholarly monograph publishing financially unsustainable. Furthermore, per this report, declining revenues and mounting losses shall pose barriers to maintaining quality control mechanisms, as part of journal and book publishing, with a particularly deleterious effect on smaller publishers. In other words, for the UK, a rapid transition to subscription-free Open Access models, e.g., Gold Open Access, can be expected to be associated with export revenue reductions and market positioning deterioration for locally based journals (FTI Consulting, 2021, p. 6).
Conversely, for UK university libraries this Open Access policy was evaluated to entail annual expenditure increases of around 135 million GBP, which indicates that, on average, for the publishing industry the expected yearly losses to subscription models can be pegged at circa 327 million GBP that Open Access revenues can likely offset to the extent of about 30% only. This disbalance between industry losses and university expenses, also leading to the expected lose-lose situation, primarily derives from the continued dominance of subscription models in the journal publishing market worldwide in both absolute and relative terms. The toll-protected sector has demonstrated a sustained output of more than 2 million articles and a relative decline from 89% to 79% of the total output between 2012 and 2019 on the background of a rapid growth of the Open Access sector, across its models, from 10% to 21% of the global output for this period with a slower-paced increase in corresponding absolute numbers over this period and a decline from 22% to 21% between 2018 and 2019 (FTI Consulting, 2021, p. 31).
Furthermore, for UK publishers Open Access mandates can be associated not only with a depressed or stagnant demand for their subscription-based products but also increased costs that their adoption of Open Access models will likely involve internally, to the coverage of which only a limited group of high-output universities will be actively contributing through framework agreements that can also entail flat-rate pricing and cost caps. As around 80% of scholarly content continues to be in closed access, university libraries can also be expected to be renewing the absolute majority of their subscription agreements. This can, thus, involve cost inefficiencies for the library sector regardless of the level of the output that university-affiliated scholars show. This is compounded by the expected decline of 8% in research income that UK higher education institutions can be receiving, as the European Union funding either ceases or decreases post-Brexit (FTI Consulting, 2021, p. 19).
Additionally, whereas the Open Access output of UK researchers is projected to increase in the coming years, for local journals this will likely play out as a zero-sum game between their subscription and Open Access revenue streams eating into each other with a limited growth in overall revenue levels in absolute terms. Past data show that, whereas the share of subscription and Open Access revenues of publishers has remained at 87% between 2016 and 2019, the growth in Open Access income share from 10% to 14% for this period has come at the relative expense of subscription revenues (FTI Consulting, 2021, pp. 50, 52).
By Pablo Markin
FTI Consulting. (2021). Economic Impact of UKRI Open Access Policy. Research Report, 17 February 2021. London, UK: FTI Consulting LLP. Retrieved from https://www.publishers.org.uk/wp-content/uploads/2021/02/FTI-Report-for-Publishers-Association-1.pdf.
Featured Image Credits: Harewood House, The Old Library, Harewood, England, UK, June 29, 2017 | © Courtesy of Michael D. Beckwith/Flickr.