Re: PLoS Financial Analysis

["Sally Morris \(ALPSP\)" <sally.morris@alpsp.org>]

I've always had a feeling that the finances of an OA journal are less likely
to improve over time than those of a subscription/license journal.

Of course, both have launch costs (market research, recruitment of
editor/editorial board and early papers, marketing (in the true sense -
making sure the journal is visible in and linked to and from all the right
places:  A&I indexes, citations in other journals, etc)).  But revenue for
an author-side payment OA journal can never increase more steeply than
(direct) costs, as both are driven by the number of papers - aside, that is,
from ahead-of-inflation price increases.   Revenue for a
subscription/license journal can and should grow steadily (ideally, ahead of
costs) for years as the number of subscribers/licenses grows - price
increases ahead of inflation (or, at least, inflation plus growth in extent)
are these days totally unacceptable to customers.  The key is for purchasers
to increase more rapidly than articles.

Or have I missed something here?

Sally


Sally Morris, Chief Executive
Association of Learned and Professional Society Publishers
South House, The Street, Clapham, Worthing, West Sussex BN13 3UU, UK
Tel:  +44 (0)1903 871 686
Fax:  +44 (0)1903 871 457
Email:  sally.morris@alpsp.org

----- Original Message -----
From: "Peter Banks" <pbanks@bankspub.com>
To: <liblicense-l@lists.yale.edu>
Sent: Saturday, June 24, 2006 1:27 AM
Subject: Re: PLoS Financial Analysis


> Actually, the evidence suggests that PLoS is not moving in a
> positive direction and that it will never be able to survive
> without continuing grant support.
>
> While fee income and advertising revenues rose from $750K to
> $900K over the past two years, costs rose from $1.5 million to
> $5.5 million. Were this a commercial start up, investors would be
> bailing out just about now.
>
> Of course, it's fine if PLoS plans to survive largely on grants
> from the Moore Foundation and other sources. But no one should
> pretend that PLoS's business model, if it can even be said to
> have one, is applicable anywhere else.
>