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The Elasticity of Demand in Open Access and Conventional Journal Publishing Markets

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Recent data show that the demand of both individual scholars and university libraries for the services that journal publishers offer is increasingly elastic.

A Blog Article by Pablo Markin.

In recent months, growing attention has been paid to the article processing charges (APCs) of academic journals. Especially with the advent of open access journal and initiatives, the interaction of these developments with demand in different sectors of the publishing market remains, however, under-analyzed. On the one hand, the presence of open access publishing options drives the costs of academic publications up for individual scholars, which can make them shop around for the most cost-effective publication solution they can find on the academic market, provided that journal-level academic standards are met.

This dynamics can unleash a race to the bottom as conventional publishers enter the fray of the open access publishing market, as they launch open-access mega-journals of their own. This is demonstrated by Scientific Reports of Springer Nature that with APCs of 1,675 USD but with a 2-year impact factor of 5.228 apparently represents a more attractive deal than PLOS ONE that has the APCs of 1,495 USD, but sports a corresponding impact factor of 3.057 for the year 2015. While the 2016 decline in the number of articles published at PLOS ONE registered after it raised its APCs in late 2015 can be ascribed to the price sensitivity of the author market, it can also be construed in terms of demand elasticity that reacts not only to price cues but also to other factors, such as journal impact factor indicators and their dynamics. The declining number of research articles published at PLOS ONE is closely followed by its citations per document data for recent years.

Demand Elasticity, July 13, 2009 | © Courtesy of Steve Dashiell.
Demand Elasticity, July 13, 2009 | © Courtesy of Steve Dashiell.

Likewise, in the market for scientific journal subscriptions, university libraries are increasingly found to exhibit elastic demand for deals that publishing houses offer them, as North American university libraries are reportedly opting for the renegotiation of their journal access agreements in growing numbers in recent years. This represents a significant departure from the situation of previously inflexible demand for journal subscription bundles that publishers offer. This also amounts to a marked shift in the academic journal publishing market with portentous consequences for the financial viability of extant business models, whether they are based on open access or paywalls, such as significantly falling net revenues, as financial reports of PLOS demonstrate in recent years.

Thus, funding bodies as well as other market players may need not only pay special attention to the long-term sustainability of the models they apply, but also to the growing elasticity of demand in the academic journal access and publication markets.

Featured Image Credits: Old College Quadrangle, Edinburgh, Scotland, United Kingdom, January 31, 2017 | © Courtesy of kaysgeog.

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