What the financial analysts say:
- Bear Stearns (2003)
- Science libraries are under funding pressure but they will pay up.
- Reed Elsevier has around 1500 science journals; each is a mini-monopoly enjoying huge pricing power.
- Reed Elsevier’s, and other publishers’, profits improve by 16% when a client moves to the online only model.
- Citigroup Smith Barney (2004)
- STM publisher price increases are mainly to maintain high profit margins.
- Credit Suisse (2003)
- Bundling journals into one contract gains market share.
- Bundling has the effect of creating higher profit margins on low-quality, low submission journals.
- Morgan Stanley (2002)
- Reed Elsevier is the industry leader claiming 23.3% of the market revenue.
- Reed Elsevier will outperform the market in growth as libraries trim peripheral publishers.
- Reed Elsevier’s operating margin (percent of revenue as profit) in scientific publishing was calculated to be 36.9% in 2001
- Outsell (2004)
- The economics of scholarly publishing are broken and dysfunctional.
- Powerful publishers are in ongoing struggles with their biggest customers.
- Open access is just one symptom of the overall disease.
- There are plenty of opportunities for smart sellers to prosper and smart buyers to get more value.
- Gooden, Paul et al. Reed Elsevier: “The Appliance of Science”. Bear-Stearns. September 29, 2003. 23pp. Summary available at: (1); (2)
- Mays-Smith, Simon et al. Three Pillars of Wisdom: the STM journal industry. Credit Suisse First Boston. April 6, 2004. 48pp. A synopsis is provided here.
- Open Access Newsletter: Summary of Citicorp November 2, 2004.
- Gooden, Paul, Matthew Owen and Sarah Simon, “Scientific Publishing: Knowledge is Power.” Morgan Stanley. September 30, 2002. 20p
- Healy, Leigh Watson et al. “Competitor Assessment: STM – Revolution in the land of the giants.” Outsell, January 30, 2004. 36pp. Abstracts are available at: (1) and (2).
For additional information please contact Kimberly Douglas, University Librarian, at kdouglas AT library.caltech.edu.
June 12, 2009 12:07