OPERAS Open Access Business Models White Paper, July 2018
- Business Models
- Case Studies of Different Business Models and Evaluation of Pros and Cons
- Examples of Emerging Trends
- OPERAS Situation
- Annex 1: Poster of the Business Models Working Group presented at the OPERAS Conference “Open Scholarly Communication in Europe. Addressing the Coordination Challenge”, 31 May – 1 June 2018, Athens
The white paper on Business Models for Open Access proposes that there is no single ideal business model for Open Access that can be adopted as standard. It describes the current landscape in which there are multiple approaches to OA publishing, many of which are adopted by OPERAS members to suit their particular circumstances, although the APC and BPC models still predominate especially among commercial publishers. The paper describes the business models adopted by members both from the point of view of publishers, and of service providers such as Knowledge Unlatched, as well as looking at models emerging elsewhere such as in the USA and at national level in some European countries, where interesting collaborative approaches are being undertaken. The paper analyses the pros and cons of different models, and concludes with some suggestions for ways of bringing greater stability and sustainability to Open Access publishing models.
This paper addresses the main business models currently used by open access publishers, with a particular focus on the situation of European publishers in the social sciences and humanities, especially monographs. What is apparent is that while the APC or hybrid model has come to dominate in OA journal publishing, OA monograph publishing in SSH is demonstrating a greater range of business models, creating a patchwork landscape. This is due to the disparate nature of the publishers, their ‘bibliodiversity’ and multilingual nature, and the general lack of funding in SSH compared with STEM. Although the range of models described presents opportunities for smaller stakeholders or specific fields, it poses challenges for sustainability and growth. Unless there is significant intervention at policy level, seems that stakeholders in the monograph publishing landscape will continue to operate with mixed models. Looking to other countries and continents such as the USA, one sees a similar situation.
A large share of scholarly communication in science takes place in journal articles, mainly in Science, Technology and Medicine (STM). Accordingly, the majority of open access publications in these fields continues to be article based, many of them paid by the authors via article processing charges (APCs). For monographs and journals in the Arts, Humanities and Social Sciences (AHSS) we see a different picture. There are a number of open access business models in operation for monographs and AHSS journals, as identified in many different reports and articles (Crossick, Monographs and Open Access, HEFCE, 2015 / Ferwerda, Pinter and Stern, Landscape Study on Open Access and Monographs, Knowledge Exchange, 2017 / Deegan and Jubb, Academic Book of the Future, AHRC and British Library, 2017). The models identified include library crowdsourcing or partnership subsidy, institutional crowdfunding, book processing charges (BPCs) paid by the author or their institution or funder, grants, national and EU funding, revenue from commercial activities such as print sales or service provision, community volunteering (replacing paid labour costs) and institutional funding. Several open access publishers use a combination of these models.
It is widely acknowledged that there is no single model among these that could fund open access monograph publishing on its own or that would work for all players, and that an ecosystem in which all of these models co-exist, used in different ways by different organisations, is likely to be the case for the foreseeable future. This is due to the prevalence of national languages in AHSS (think of French Studies or Scandinavian History), the relative small size of communities, differences in national funding and a lower degree of standardisation in book publishing workflows and dissemination networks for open access books.
For the purposes of this paper therefore, rather than identify a single ‘state of the art’ model to aspire to, it is probably more useful to capture the range of models that partners currently use, to identify shared characteristics and also differences by looking at their respective strengths and weaknesses Such analysis can help to identify ways in which partners can adopt aspects of each others’ models or find ways of collaborating. This paper also examines new models that have emerged in recent years as these can be taken as indicators for larger trends in publishing.
This section identifies the main business models currently used in open access publishing, and some of the key pros and cons of each model. These were presented at the OPERAS Conference in Athens in June 2018.1 As described in the introduction, many publishers and service providers use a mixture of these models in an effort to raise enough funds to cover their operating costs. These models also include ‘in-kind’ support in the form of shared resources at an institution such as professional services (human resources, finance, IT, marketing and communications), use of institutional repository as platform, library staff, and scholarly communications services.
Article processing charges (APCs) or book processing charges (BPCs) are made to the author (or their funder or institution) to cover the publishing costs. Different publishers seek to cover different costs, depending on their model and their other sources of income, therefore APCs/BPCs vary greatly from publisher to publisher.
Examples of use: Commercial publishers, university presses
Pros: Aids recognition of the costs involved in quality publishing
Cons: Lack of funding available in AHSS, different levels of financial resource at different institutions makes for an uneven and unfair situation for academics, inefficient, high administrative burden for institutions and publishers, additional burden for academics
Publishers (or service providers) make one online version free, and charge for other formats and additional functionalities, e.g. PDF, enhanced HTML, e-pub/mobi for e-readers.
Examples of use: OpenEdition, OECD, Open Book Publishers
Pros: The Freemium model shows some promise and can provide revenue for the publisher or the service provider, to cover all or some of the costs
Cons: This model is still somewhat experimental and has not been proven at scale
By joining forces, institutions and organisations can bring different skills and funding sources together to boost OA publishing. This can be at subject level, library level, national level, and international level e.g. OPERAS.
Examples of use: Lever Press (USA), TOME – Towards an Open Monograph Environment (USA)
Pros: Bringing together participants with a common interest is an excellent way of sharing services and infrastructure for the common good, of raising funds for a larger-scale collective project, or of bringing together stakeholders from different parts of the academy to find common solutions.
Cons: As with other business models considered here, such initiatives can experience issues with scaling, sustainability and momentum.
OA publishing is also undertaken by some academic-led presses, who often operate on a community/voluntary basis.
Examples of use: Meson Press, Mayfly Press, Language Science Press
Pros: Such publishing ventures seek to address the issues of profit-making by commercial publishers by taking publishing back into the academic community
Cons: Scale, resource, and lack of funding and publishing skills can pose a challenge to such operations
Grants to launch or support new open access ventures and projects are one of the ways publishers and coalitions fund their OA activities.
Examples of use: Open Library of the Humanities, and many US initiatives who receive Andrew W. Mellon funding; OPERAS H2020 funding; ΕΚΤ ePublishing
Pros: For those who are successful in grant applications, these can be a highly beneficial way of kick-starting a new venture or a particular project.
Cons: Funding via grants is not a reliable source of income and can therefore lead to a stop-start, unsustainable situation for publishers who need guaranteed regular income in order to build a sustainable long-term publishing operation.
Many university presses receive a regular endowment to fund part of their operations, for both OA and traditional publishing. This is particularly prevalent in the USA where subsiding university presses to a certain degree has always been common, and where philanthropy to support higher education institutions is far more common than in Europe.
Examples of use: many US university presses
Pros: Where such schemes are well established such as in the USA, endowments can form a vital source of ongoing funding, usually to subsidise portion of a university press’s operational costs on a regular basis.
Cons: This is not a guaranteed source of income, and the practice is not widespread enough for it to be a serious option, especially in Europe where philanthropy for universities or their presses is not common.
Some publishers and publishing service companies such as Knowledge Unlatched, operate library funding schemes to secure library contributions to make books and journals available OA at the point of use.
Examples of use: Open Library of the Humanities, Open Book Publishers, Knowledge Unlatched, OAPEN
Pros: integrates well with existing library purchasing workflows and distributes funds in a manner similar to subscriptions, therefore makes for an easier transition for libraries. This model also addresses the relative lack of funding in AHSS and provides OA publishing without author-facing charges.
Cons: Covers disciplines with lower levels of acceptance for open access publications, and at a certain point, scaleability can become an issue.
Many university presses in Europe, and new OA publishers in the UK, receive funding from their institutions to cover varying degrees of their publishing costs. They also benefit from in-kind support from their institution in the form of the use of professional services, staff and infrastructure as described in the introduction to this section. Often, this support is provided in order for university presses to publish the work of their own academics.
Examples of use: Göttingen University Press, UCL Press
Pros: Since institutions are paying for content from other publishers for their institutional libraries anyway, it makes sense to repurpose some of that cost to invest in providing open access publishing for the institution’s academics. This brings with it many advantages such as the sharing of existing services, and the institution receiving the direct reputational benefits of widespread dissemination of its research.
Cons: Not all institutions will have sufficient funds to operate this model, or may only have enough to invest at very small scale. Providing such a service at very small scale is unlikely to achieve the impact the institution desires, and in that case the publisher could struggle to attract authors. Scaleability is also an issue, since even those institutions who do invest in their press are unlikely to be able to grow indefinitely. Sustainability can be a concern where institutions cannot guarantee the subsidy in the long-term.
Some publishers offer publishing services to other presses or institutions, alongside publishing books and journals in their own imprint.
Examples of use: Ubiquity Press, UCL Press, Knowledge Unlatched
Pros: Providing services to other institutions forms a useful revenue stream, and benefits all involved by sharing costs, resource and skills.
Cons: It can take significant resource, skill and investment in business development to develop and sell such services at a level that makes them viable.
Many publishers, both commercial, university press and community, sell print copies or other formats to support their activities, while offering open access versions online.
Examples of use: university presses, community or academic-led presses, commercial presses
Pros: While there is still demand for print books it makes sense for publishers to sell these via traditional book retail channels and via their own ecommerce websites, and the revenue from print sales can form an important revenue stream.
Cons: There really are no significant cons to selling print although it should be borne in mind that selling books via traditional supply chains does require some staff resource to manage the process, set up agreements with third-party suppliers, provide advance information and metadata, and manage customer services. This can be resource intensive to varying degrees depending on the demand for the books, their global sales potential, the profile of the author, and the publisher’s willingness to invest in this process (which will need to be assessed on the basis of potential return on investment).
One other con is that this process ties the publisher to a traditional production workflow where books must be typeset traditionally and proofread, adding to direct costs and labour. If in future some types of open access monograph move to a digital-only model, then publishing straight to HTML on key OA platforms would remove a significant part of the workflow and would therefore reduce costs and increase speed. This, however, would not suit books that have wider general interest and media potential where retail availability and book reviews in the media are critical to the book reaching its full potential.
As part of Coimbra University Press, UC Digitalis is mainly supported by the annual funds invested by Coimbra University as institutional programmatic planning, and thereby until now no fee (for APCs or subscriptions) has been demanded from authors or journals’ directors in order to grant the publication of the 30 journals and more than 250 books that are already displayed in Open Access. On the other hand, most of the journals and part of the volumes are published in association with research centres, which are being increasingly sensitive to the idea of sharing part of the costs involved in the publication: translation of texts and of metadata, copy-editing process, print costs (for those journals that want to keep a printed version). The selling of printed books contributes to the global balance, but covers only a part of the costs involved in keeping the Press and UC Digitalis.
EKT ePublishing was launched as part of a wider project for the development of services dedicated to the dissemination of peer reviewed scientific output in open access. Its e-infrastructure development was co-financed by Greece and the European Union/European Regional Development Fund, within the context of the Operational Program “Digital Convergence”. ePublishing is offered at national level and therefore is not limited to researchers of a particular institution. The service is core part of EKT’s mandate and enhances the transition to the open science paradigm in the country.
EKT ePublishing provides, at no cost, services to research institutions and not-for-profit scientific publishers (scholarly societies and research centres), enabling them to employ digital-oriented business models and significantly reduce publishing costs. As of January 2018, ePublishing platforms host 32 non-APC peer reviewed journals, 4 series of conference proceedings and 8 monographs.
Operational costs are covered by structural funding, as well as by EKT’s participation in EU funded projects related to digital infrastructures. Yet, until now the main source is project based (structural funds and EU funding) which poses challenges to long-term sustainability. The non-profit operation of our collaborating publishers limits their capacity to contribute to the costs of the service. To overcome the fragmentation of funding flows as described above, particular emphasis is placed on exploring complementary business models that will diversify incoming resources and enable a sustainable growth in the future.
For cost and processing reasons, the simplest OA solution is in place: online provision of print PDFs on the university’s repository with only marginal additional effort to create and disseminate the OA version. GUP’s books are produced in customized initial digital print-runs, usually around 20–50 copies, with payment made by the authors and editors. Projects that promise to refinance themselves through print sales come with lower or no author co-financing. This co-financing does not include the usual overhead costs of an independent university press.
First-copy costs have to be covered in a set ratio by:
- authors/editors (publication charges to cover author support for manuscript preparation, formal quality assurance, artwork production, online deployment, title registration, and marketing plus costs for author copies),
- the press (e.g. the library with personnel costs and general services such as accounting or logistics), and
- the university as the overarching institution (overhead).
According to our estimation, the university indirectly subsidizes each book project by around €3,500 (full annual cost of press plus 60% overhead divided by annual number of titles). Our press covers all direct costs for production and dissemination, including direct personnel costs. Author consultancy, peer review, strategic development, and publishing experiments, as well as teaching, presenting, or writing on the press’ activities, do not have to be covered by revenues as they are considered to be part of the library’s OA service portfolio for the university. Several departments usually belonging to a press are part of, or blend into, the general library infrastructure (HR management, Housing, IT services, and Equipment).
Based on repeated decisions of the editorial board, retail prices of the press have remained modest (usually around 20% below average monograph price of comparable quality in a given discipline) to avoid dissemination being reduced due to overpricing or cannibalism among versions. Although the press could outsource handling of long-tail sales to specialized vendors in order to cut down on personnel costs and stock expenses, we have calculated that this would result in a price rise of around 40–50%, which does not make sense in the wake of a free online version.
After the first print-run, copies are solely financed by sales revenues. Retail prices are based on a mixed calculation of first-copy costs, expected costs for reprinting, and all handling costs plus general overhead surcharge.
Through the Knowledge Unlatched (KU) platform, publishers and initiatives are offered several business models to support the funding of their Open Access journals, books and services/infrastructures. Two key business models are:
- KU Select – our own crowdfunding program
- KU Partners – models from partners
Under KU Select, KU seeks financing from the library community following a crowdfunding approach. For books, the BPC for a title is shared across all the supporting libraries. If the target is reached, these titles will be made Open Access. If not, then the titles remain behind a paywall. Similarly, KU Select for journals distributes the title fee of a journal across the supporting libraries. The title fee is based on the current sales of journals and envisions a transition into an APC-free model. While books will be made Open Access directly, journals are financed for a three year period to cover the APCs. Libraries will become a member for the three year period and researchers don’t have to pay an APC to publish in the journal.
As for KU Partners, KU helps publishers and Open Access initiatives to raise financial support for their Open Access program via active outreach to institutions. In this model, publishers are free to decide upon the specifics of their business model. For example, in 2018 KU will support the University of California Press’ Luminos program. This is a membership model where supporting institutions pay a membership fee and benefit from a discount on the BPC (amongst others) for their researchers. On the other hand, the publisher Transcript (in collaboration with National OA Contact Point DE, see section 4) works on a model without BPCs using a consortia model for forthcoming titles.
Lexis (full name “Lexis Compagnia Editoriale in Torino”) is a commercial company that makes business (1) providing services to publishing industry, and (2) publishing on its own account through some brands, owned by or licensed to Lexis, in non-fiction, mainly academic, sector.
(1) In this case, OA publication is one of the provided services: if a scientific journal or collection asks for OA distribution, Lexis supports it in applying for acceptance by platforms and repositories such as OpenEdition and DOAJ / DOAB, being paid for that. If customer is institutional (i.e. university department), it uses research funding to finance it, usually through call or invitation to tender. Il should be mentioned that more and more often, in Italy, OA is a requirement for participating in a call concerning scientific publishing.
(2) OA publication brings benefits to visibility and exposure, which should indirectly entail growing brand reputation in the academic field, therefore is actually part of the publisher investment risk, since the publisher foregoes potential revenue from digital content selling. Decision is taken on a case by case basis, according to the project business plan. Distribution with OpenEdition is an option that offers the chance of revenues, mainly from libraries, thanks to a freemium model. Lexis also joined a Knowledge Unlatched project.
Its business model is actually a mixed, flexible, model.
OpenEdition – a non-profit Open Access initiative supported by the main French research institutions – has developed the Freemium partnership program, which provides libraries with the opportunity to directly support open science. Such combination of “free” and “premium” ensures open access to information for all users while offering premium dedicated services to partner institutions, with no processing charges or publisher fees applied. In practical terms, the HTML format of the Freemium content is available to all internet users, while partner institutions and their readers are granted unlimited download of PDF and EPUB formats as well as many associated services such as: COUNTER statistics, MARC records, alerts and notifications, portal personalization, etc.
In this way, the Freemium program creates a virtuous cycle where: the entire scientific community can freely access multidisciplinary, peer-reviewed content, including both journals and books; publishers increase their visibility and get funds to secure open access; libraries play their role of disseminating knowledge while benefiting from specially designed services, all this in keeping with an ethical approach and at reasonable, transparent costs.
The Open Library of Humanities (OLH) operates a business model called the Library Partnership Subsidy (LPS). As of April 2018, the website lists 199 as active supporters (and several more pending), meaning these institutions pay an annual membership fee into a central fund that allows OLH to conduct their publishing operations across 23 journals. This makes it possible for OLHto have no author-facing or reader-facing charges. The fee is not designed to allow authors from any particular institution to publish but rather for the common good. As such, and as per a direct ruling from HMRC in the UK, this business model is exempt from VAT. Membership fee rates vary from £500 up to nearly £2000. Rises in rates are voted for by participating libraries when new journals wish to join the platform.
As well as acting as a publisher of open access monographs and journals, Ubiquity Press also provides a platform for new university presses to set up their own open access press. By using the same platform infrastructure, shared by a number of ‘partner presses’, the model aims to provide a cost-effective, all-in-one publishing solution for start-ups, as well as a ‘partner network’ for support and development. The platform is provided as standard and other services are offered as optional extras such as editorial and production services, charged at standard BPC rates. The Ubiquity Partner Network currently numbers over 30 publishers in its scheme from Europe and the USA.
UCL Press was the first fully open access university press to launch in the UK (2015) and it is funded by UCL to undertake open access publishing of monographs, textbooks and journals. UCL covers the costs of staff, production, marketing, infrastructure, BPCs for UCL authors, as well as all overheads. While UCL Press does have some revenue streams that are gradually increasing as the Press’s activities grow, they don’t cover the full costs and the institution does not expect the Press to cover its costs fully through income. UCL wants to support the Press in order to deliver impact, since its books are read by millions of people around the world via open access platforms. Current revenue streams include: sale of print copies, BPCs from non-UCL authors, library schemes such as Knowledge Unlatched, consultancy services and grants.
TOME is a collaborative approach between Association of University Presses, Association of Research Libraries, Association of American Universities, all in the USA. Universities commit to funding three OA monographs in HSS per year over five years at a fee of $15,000 each, to be published by members of the AUP or similar scholarly publishers. The scheme recognises the costs involved in high-quality scholarly publishing and offers a commitment from institutions to supporting their own academics, thereby also acknowledge the problems in scholarly monograph publishing in HSS. So far, 14 institutions have committed to the scheme.
Potential for success: This seems to have potential for success, given its collaborative nature and the range of key stakeholders. It is also forward thinking in its support of the collaboration with established scholarly presses which are widely recognised by academics therefore lending credibility, and the fact that established presses have their operations and workflows well established.
Risks: As with any new OA initiative, scaling up could pose a challenge.
Lever Press is an initiative funded by the libraries of around 40 liberal arts colleges to create an OA press. They have raised over a million dollars and are in the early stages of planning their first publications. They plan to publish works suited to the nature of liberal arts colleges where there is a greater emphasis on teaching than research. The type of works that will therefore be supported are textbooks, introductory texts to key concepts and scholarly editions.
Potential for success: This is a significant investment and an impressive collaboration that could kickstart sufficient action to effect change.
Risks: Scale and speed of growth, as with most OA services.
The Global Sustainability Coalition for Open Science Services (SCOSS) is a network of influential organisations committed to helping secure OA and OS infrastructure well into the future. Officially formed in early 2017, SCOSS’ purpose is to provide a new co-ordinated cost-sharing framework that will ultimately enable the broader OA and OS community to support the non-commercial services on which it depends.
SCOSS will function primarily to help identify and track, via a registry, non-commercial services essential to Open Science, and to make qualified recommendations on which of these services should be considered for funding support. At present, the coalition is comprised of the following: the Council of the Australian University Librarians (CAUL), LIBER, EIFL and SPARC Europe. Membership is open to organisations that can represent research funding and/or performing organisations, including libraries and researchers.
Also involved in the initial planning for the coalition were the Australasian Open Access Strategy Group (AOASG), The Confederation of Open Access Repositories (COAR), The European Research Council (ERC), The European University Association (EUA), The International Federation of Library Associations and Institutions (IFLA), and Science Europe. Initial input was also provided by SPARC.
At present, SCOSS has nearly 40 members who are currently contributing to the development of DOAJ and SHERPA-RoMEO. There is a fee structure of different levels that reflects the size and nature of the funder institution.
Potential for success: Like TOME and Lever Press, the emphasis on sourcing funding from institutions is a good principal and helps to promote the understanding that institutions have a strong role to play in funding services and publishing for open access.
Risks: As before, the biggest challenge will be scaling up to make this a widespread and reliable source of regular income for new initiatives.
The National Contact Point Open Access OA2020-DE is a coordinating body in Germany to create prerequisites for the large-scale open access transformation in accordance with the Alliance of Science Organisations in Germany. It is closely connected to the OA2020 initiative and Project DEAL. To support the large-scale open access transformation, the body carries out extensive publication and data analysis by German institutions, which informs the development of new open access business models and experiments.
Potential for success: A first pilot was setup with the publisher transcript, the Political Science Information Service (FID) at the Bremen State and University Library and Knowledge Unlatched. The project will enable political scientists to publish their books directly in Open Access. Within a few weeks, 25% of the required institutional funding was reached, highlighting the strong interest in the model and potential for success.
Risks: The national collaboration holds a lot of potential for stakeholder alignment and the development of business models on national scale (Germany). However, the vision of a large-scale transformation will require global support and could be challenging to coordinate.
As was identified in the introduction, there is no single state-of-the-art for open access business models. However, the demonstrable increase in coalition models, in which a group of libraries or institutions collaborate to raise funds for open access projects, is encouraging, and is something that OPERAS partners could consider. Since there is already a coalition model working well among the OPERAS partners for discoverability and standards, it is worth exploring whether OPERAS could run a similar project to explore collaborative business models.
OPERAS should also systemically monitor the development of business models with special attention to the developing mix of funding sources. We believe it is very likely that with more financial resources becoming available from various types of sources, the funding ecosystem will further develop and differentiate. OPERAS could be instrumental in assessing the effectiveness and efficiency of the different models.
- AAU – Association of American Universities
- AHRC – Arts and Humanities Research Council
- AHSS – Arts, Humanities and Social Sciences
- AOASG – Australasian Open Access Strategy Group
- APC – Article Processing Charge
- ARL – Association of Research Libraries
- AUP – Association of University Presses
- BPC – Book Processing Charges
- CAUL – The Council of the Australian University Librarians
- COAR – The Confederation of Open Access Repositories
- DOAB – Directory of Open Access Books
- DOAJ – Directory of Open Access Journals
- EKT – National Documentation Centre
- FID – Political Science Information Service
- FTE – Full-time equivalent
- HEFCE – Higher Education Funding Council for England
- HR – Human Resources
- KU – Knowledge Unlatched
- LIBER – Association of European Research Libraries
- MARC – Machine Readable Cataloguing
- OAPEN – Open Access Publishing in European Networks
- OECD – Organisation for Economic Cooperation and Development
- OLH – Open Library for the Humanities
- SCOSS – The Global Sustainability Coalition for Open Science Services
- SPARC – Scholarly Publishing and Academic Resources Coalition
- SSH – Social Sciences and Humanities
- STM – Science, Technology and Medicine
- TOME – Towards an Open Monograph Environment
- UCL – University College London
Annex 1: Poster of the Business Models Working Group presented at the OPERAS Conference “Open Scholarly Communication in Europe. Addressing the Coordination Challenge”, 31 May – 1 June 2018, Athens (pdf)
This White Paper has been prepared by the OPERAS Open Access Business Models Working Group under a CC BY 4.0 license
Association of European University Presses (AEUP)
Institute of Literary Research of the Polish Academy of Sciences (IBL PAN)
National Documentation Centre (EKT/NHRF)
Open Library of Humanities (OLH)
Martin Paul Eve
University of Coimbra — UC Digitalis