Roy Kaufman: Shifting Revenues from Post-Publication to Pre-Publication: The Impact of Open Access

Roy Kaufman, Managing Director of New Ventures at Copyright Clearance Center (CCC), writes here in a guest post about the shift of revenue to pre-publication and what that means to publishers.

'Open Access (OA) is changing the way scholarly, scientific and academic journal publishers are managing their businesses fiscally. While revenue has traditionally been earned by publishers after publication through subscriptions, site licenses, pay-per-view, permissions, advertising and licensing channels, OA is slowly, but dramatically shifting the model so that revenue is earned pre-publication.

Under the OA model, publisher earnings come from author charges, including open access charges, page and color charges, author reprints, and other services. The sources of revenue are also changing. In the traditional customer-pays-the-distributor model, publishers were compensated by libraries, advertisers and aggregators. But now, publishers receive these revenues pre-publication from funders, institutions and authors. In this new paradigm, publishers must focus on usability and developing convenient services they can offer these new buyers to streamline fee management processes, retain high-value authors, serve new stakeholders, and maintain – or increase – revenues. Put simply, publishers are gaining new customers with a new set of needs to serve.

Authors as Customers

Traditionally, scholarly publishers have seen authors as sources of content and as researchers. However, in the gold road open access model, authors, backed by funding organizations, also represent a source of revenue. Under many OA models, authors will pay an Open Access charge to make an article freely available. They may also pay submission fees, page and color charges, article reprint fees, or some combination of these. Thus, publishers need to (re)focus on authors as customers.

To meet these new author needs, publishers must automate, providing authors with an intuitive, web-based workflow with clear explanations of publishing options and their downstream licensing and compliance implications. At a more granular level, publishers need the capability to provide customized pricing based on factors such as user type, funder, license type, author affiliation, author location and membership status. Publishers must be able to execute business rules that balance the needs of their authors, their institutional subscribers and funding agency mandates.

To help publishers deliver the best user experience, CCC’s RightsLink® is now integrated into the manuscript management workflow, providing a streamlined, web-based payment workflow – driven off of a sophisticated pricing engine – dedicated customer service, multi-currency payment options, conditional payment guarantees, and real-time reporting for all transactions. Whether publishers use RightsLink® or their own bespoke services, it is important to get the author, institution and funding experience right.

Funding Organizations as Customers

Publishers who are able to best collaborate with multiple funding organizations and process their unique requirements are going to gain the greatest traction in the Open Access market. These organizations fund the publication of OA articles, either directly through publishers or indirectly through block grants to institutions. Not surprisingly, funders want to be able to track the content that they finance. This means they want verification that Open Access charges have been paid, as well as confirmation that publishers are complying with their policies and licensing requirements.

Universities and Other Institutions as Customers

As Open Access publishing increases in volume and becomes a more prominent part of the research community, universities will need to educate their staff and refine their policies and procedures. At the same time, publishers will need to offer a streamlined OA charge submission process that addresses the needs of universities and of their funders. Universities as “readers” have traditionally been, and continue today to be, a significant revenue source for publishers through subscriptions to journals. Now, however, as the number of OA journals (including hybrid journals) increases, universities also serve as managers of OA funding, typically from the block grants of funding agencies, and sometimes from their own reserves. Funders provide institutions with significant research grants from which they expect universities to pay Open Access charges. By failing to comply with funders’ publishing and licensing policies, a university may be putting future research grants at risk. For that reason, universities must be able to provide funders with itemized accounts of how they have spent their funding, making publishers’ reporting capabilities very important. Academic institutions also have their own requirements for recording and reporting on individual items of expenditure, adding to the demand on publishers to offer robust reporting to multiple constituents.

The Changing Role of Content Users

Reuse of an article that is readily available on a publisher’s website is not always free, as is recounted in "Open Access Doesn’t Necessarily Mean Free,” a recent article from CCC. Thus, content users can represent yet another source of revenue, even when a journal is publishing content openly. Depending on the model under which a journal or an article is published, a content user may be expected to pay for reuse, particularly when the content is reused in a commercial context. (One Creative Commons License, CC-BY-NC, requires a specific license for commercial reuse. This license is used by many publishers, especially in so-called “hybrid” journals). Since navigating the nuanced licenses, exceptions and rules can be challenging for content users, publishers will have to make the process of purchasing content and/or rights both easy and accessible. The task will certainly include promoting the rights available, educating users about the differences in policy and pricing, and developing systems to automate transactions and new data/metadata standards.

What's Next?

While traditional measures of a journal’s impact, such as rejection rates and ISI Impact Factors, remain important for some journals, for others simplicity of transactions and ease of compliance with funder mandates are even more critical. Further market segmentation based on OA polices is inevitable. A journal's success will hinge on making smart segmentation decisions, meeting the needs of new constituencies, and keeping the user experience as simple as possible. The model will mature and be maximized only after a period of disruption and experimentation. Hold on for a wild ride.'

Roy Kaufman, March 2014

CCC offers ALPSP members a special discount off the RightsLink suite of licensing tools. Review information about their open access solution on their website.

Going to the London Book Fair? See Roy Kaufman speak on “Consideration for Publishers Develop Open Access Business Models” on 9 April 2014, 16:00-17:00. The Faculty, EC1.

You can find a wealth of resources, white papers, news and policy information on the Open Access Resource Center hosted by CCC in partnership with ALPSP.