Launched in 2003, the Public Library of Science has reached an interesting inflection point — as they put it in their 2010 Progress Update, “seven years after entering the publishing business, our annual operating revenues exceeded expenses for the first time.”
How PLoS arrived at this point bears examination, for it reveals both strengths and weaknesses of the organization and the model they’ve adopted.
Initially funded by a grant from the Gordon and Betty Moore foundation, with other entities — including Merck and Genentech — kicking in money later, PLoS’ seed funding lasted a few years, enough to launch the organization’s two main journals — PLoS Medicine and PLoS Biology. But viability remained elusive with these two publications. In 2006, PLoS launched PLoS ONE, a site that publishes manuscripts after review for “methodological soundness,” resulting in an acceptance rate 3-4 times the norm (about 70%). Judging from a table in their Progress Update, the 6,800 papers published in PLoS ONE accounted for about 80% of the papers published across all the PLoS titles that year (I could only eyeball the chart, but guessed the total at about 8,500 total). This suggests that the submission rates, acceptance rates, or both are much lower for the other journals.
PLoS ONE also contributes approximately 76% of the organization’s author fee revenue, assuming all the papers published were charged the $1,350 publication fee. Deviation from this owing to an occasional fee waiver would shift this estimate only slightly, I believe.
A fascinating fact is that while PLoS doesn’t print, it’s direct publishing expenses exceed its operational expenses by upwards of $1.2 million. Perhaps this is a demonstration of the hard truth that online publishing is more expensive than print publishing. I think that’s likely only part of the answer. My hunch is that, given the large number of experiments and initiatives PLoS is engaged in, it is a sign of an organization investing in online development beyond publication — projects like PLoS Hubs, PLoS Currents, and Article-Level Metrics. Much of this may be within their not-for-profit remit, but I wonder what the expenses involved with creating the various ranking, post-publication review, and commenting features have been, and if these expenses will abate in the future.
It’s also worth noting that in 2010, PLoS increased its grants by more than $1.5 million. Without that infusion of cash, they still would have been in the black, but only by $800,000 rather than the $2.8 million stated. It’s also worth contemplating why this influx of grant money occurred — are there new initiatives cooking at PLoS? New ideas that attracted new grants?
Why this is an interesting inflection point for the organization ties in with another change PLoS is going through, with Harold Varmus stepping down as chairman of the board and Gary Ward taking his place. Every not-for-profit in the black has to begin to wrestle with the question, “What is this money for?” Ward will now be facing this head-on.
Now that PLoS has a sustainable model, it will be interesting to see how the organization uses these funds, what growth initiatives they undertake, how the new leadership chooses between mission and margin, and how funding agencies view their support in light of breakeven.
Allowing for grant support in PLoS’ total returns, you calculate a return for PLoS in 2010 of 21.8%. Now we have another interesting conundrum — here are returns high enough to get your attention, at least on a percentage basis. And, unlike most for-profit publishers, which share revenues with numerous not-for-profit organizations with missions relating to public health, scientific research, or humanitarian purposes, these returns stay within PLoS.
This reminds me of when the Boston Red Sox finally won the World Series. Gone was the curse. Gone was the rallying cry. Suddenly, the Red Sox were just another baseball team having to compete, the aura of mystery and novelty gone.
It will be interesting to see what happens now that the underdog is an underdog no more.
19 Thoughts on "PLoS' 2010 Progress Update — Pondering the Implications of a Watershed Year"
You’ve left the obvious questions implied, but unasked, so I’ll ask them:
1) For those in our recent discussion who supported the Monbiot editorial, is a 22% profit margin obscene or acceptable for a scholarly publisher? If a commercial publisher had these same margins, would you happily accept it as fair?
2) What happens with 2011’s finances when PLoS ONE is expected to publish around 12,000 articles adding another $8M or so to the bottom line? Will those decrying “gouging” attack PLoS as well?
My sense is that the argument will become more nuanced as a result. In spite of tremendous diversity in the size, type, mission and financial status of a press, “publishers” are described in the lay press as is they were all like Elsevier. Such introduced nuance will make Monbiot-like arguments more difficult to make.
This is a celebration, so let’s not be contentious (but a good fight always livens up a party). The flip side question is will more for-profit publishers introduce author pays journals? My guess is yes.
I think that question has already been answered, given the current gold rush by so many publishers to create their own PLoS ONE. The business model here can’t be denied in terms of enormous profitability.
Very true. But to me the really interesting question is what would have happened if Elsevier or NPG had led rather than followed the gold rush. If a big commercial publisher had pioneered the high-volume, low-bar, author-pays mega-journal, would it have succeeded and, if so, would we consider it a cause for celebration or cynical exploitation of the publish-or-perish climate in academia.
Has anyone converted a subscription journal to author pays? I know there are hybrids, but that would be the next big step in the transformation, if there is going to be one.
and JCI. There is a good case study report in Learned Publishing, 23: 107-116 (2010)
Is it a coincidence that the price set for authors isn’t a million miles from the average journal subscription fee? It doesn’t suprise me this model makes a profit – as long as academics are desperate for publication, somebody somewhere will make money out of it. I’m more concerned around the value of the peer review – such a high acceptance rate makes me wonder if ‘he who pays, wins’ in this publication game.
Well, one easy solution to excess profits is to reduce the prices they charge the authors!
As to ‘he/she pays, wins’, I rather doubt that a publications list consisting solely of PLOS One publications will get one any impressive winnings in academia…
“… it’s [PLoS] direct publishing expenses exceed its operational expenses by upwards of $1.2 million.” This is not surprising given the fact that most of the editorial work is voluntary; editorial comprises a big chunk of operations. Also their technology is based on DSpace open source software which is expected to be highly cost effective.
Interestingly, PLoS recently switched to Aries Systems’ Manuscript Central for electronic submission. This is far from free, open source technology, and it may be significant that they have pursued this option for what many publishers (and particularly a publisher where the authors are the customers not subscribers) feel needs to be the most robust aspect of their online operations.
As for voluntary editorial work, much of the discussion around the new HHMI/WT/MP OA journal has focused on the need to pay academics for their time because of the founders’ belief this does not scale or generate the necessary efficiency.
A quick correction. Aries’ solution is called Editorial Manager and has been used by PLoS for about 1 year (http://tinyurl.com/6xhlcnc). The other product you mention is from our competitor, Thomson! I would add that Editorial Manager is quite affordable and used by several OA publishers and university presses, in addition to commercial publishers.
We adopted Editorial Manager for our journals program at Penn State Presswhen I was director there, and we were quite happy with both its price and its efficiency–good value for the buck!
PLoS is non-profit, but unlike university press publishing, the surpluses it generates do not remain within the academic community. How transparent are PLoS’s finances? One would like to know more about where those surpluses go.
You can get a great deal of information from the financial disclosure forms that all non-profits in the United States are required to file with the government (available at guidestar.com). You may even be able to compare it with some other non-profit publishers or journal distributors (e.g., JSTOR).