Open Access (OA) entails cost-free access to scientific and scholarly information. All discussions on OA aside, one thing is clear: readers do not pay for OA publications. Nevertheless, it still costs money to produce these publications, and the costs must be borne in one way or another. “Business model” has become the established term in connection with the financing of OA publications. In the narrower sense, it refers to the way in which the production costs of publications and any profits accruing can be secured.

It should not be forgotten that the main reasons for the emergence of the OA movement were the exorbitant increases in the prices of scholarly journals, and the public funding of the large profits of major scholarly publishers. It therefore makes sense to distinguish between (sustainably) covering costs on the one hand and making a profit on the other, especially in cases where costs are redeployed.

In any event, the infrastructure that is in place to receive, manage, publish, and distribute works must be financed. The same applies to providing OA to documents by self-archiving them in a repository, which also involves operating and personnel costs. New and special requirements arise in connection with the publication of research data and multimedia content. As a rule, authors do not have to pay a fee to self-archive their works in a repository. Hence, institutional funding is particularly relevant in this area: one or more institutions finance the operation of the repository, costs are not passed on to authors or users, and, as a rule, profit is not an aim.

The differences between business models in the area of “gold OA” are more pronounced than those in “green OA”.

Traditionally, most journals are financed through subscription revenue – a source of finance that does not exist in the case of OA journals.

Basically, two forms of financing OA journals can be distinguished:

  1. Financing by the authors
  2. Financing by other institutions

Financing by the authors

The author-pays model achieved popularity within a short space of time, and it is often deemed to be synonymous with “OA business model”. However, even before the advent of OA some journals required their authors to pay for publication (not to mention the printing cost subsidies in the area of book publishing), and there are a very large number of OA journals that do not require authors to pay.

Article processing charges (APCs)

A central element of the author-pays model is that the publication costs are paid by the author, or by a third party (institution, employer, etc.), after acceptance and before publication of the article. The established term for the costs borne by the author is article processing charge (APC). The acceptability of, and availability of funds for, such payments depends on publication practices in the discipline in question (see DFG study, 2005). Whether authors have access to funds that can be used to pay APCs depends also on their employment situation, their access to third-party funding, and on other factors relating to their professional position. In many cases, commercial OA journals waive payment of APCs in individual cases or for certain groups of authors (e.g. authors in certain poorer countries), or pass these costs on to APC-paying authors.

Publication funds

As a result of the expansion of APC models, research budgets are being increasingly tapped to cover publication costs. Special publication funds, which now exist in many institutions, are an instrument with which the payment of APCs is institutionally regulated (cf. the overview in the Open Access Directory). Authors who are members of the institution can apply to have their publication costs paid from the publication fund. In many cases, the aim is to redeploy funds hitherto earmarked for the procurement of literature, and especially for journal subscriptions, to pay OA publication costs. In this way, although scientific and scholarly institutions still pay for publications, they are accessible to everyone and not just to the subscribing institution.

In Germany, the introduction of publication funds is closely linked to the Deutsche Forschungsgemeinschaft’s (DFG, German Research Foundation) Open Access Publishing Programme. Within the framework of this programme, the DFG promotes the establishment of OA publication funds at German universities. In each case, funding can be provided for a period of several years, with the university’s share of the funding volume increasing successively. The DFG requires universities to comply with minimum criteria, for example a publication-fee cap of 2000 EUR per article and a ban on financing “hybrid” journals. Current experiences and recommendations can be found in this booklet on publication funds.

Agreements concluded between OA publishers and scientific and scholarly institutions can regulate the settlement of APCs for members of the institution and any discounts that may be granted. In most cases, these agreements cover centralised invoicing (to the institution rather than to individual authors) and discounts on the standard APC for the institution’s authors. In some cases, they also provide for an advance payment for a certain contingent of articles by the institution.

Research funders in Germany, Austria, and Switzerland require that publications generated by funded projects be made openly accessible. Publication funding raised within the framework of the project may be used for this purpose. In some cases, funders also offer authors the possibility of applying for publication funding retrospectively, and some funders, for example the Austrian Science Foundation (FWF), pay APCs for publications resulting from funded projects directly and without the involvement of the authors.

Hybrid journals: Open Access as an exception

One very controversial business model entails charging APCs for the optional provision of OA to articles published in closed-access journals. (These journals are sometimes called “hybrid journals” with reference to this business model.) In this way, the journal earns subscription revenue as well as additional revenue from those articles that are made available free of charge (gratis OA) or free of charge and free of most copyright and licensing restrictions (libre OA), against payment of a fee by the author. This model is operated mainly by commercial publishers and is applied to existing journals that are not intended to be converted to OA. Besides the publisher’s desire to further increase revenue, the reasoning behind such an approach is that authors – either on their own initiative or to satisfy corresponding requirements of employers or third-party funders – are increasingly pressing for the provision of OA (readable free of charge, available under an open licence, etc.) to their own publications, and that the publisher does not want to lose these authors. Criticism of the model relates mainly to the fact that scientific and scholarly publications may be paid for from public funds three times over – first, for the production of the work by publicly paid scholars and scientists; second, for the journal subscription; and third, for the provision of OA to individual articles. This multiple access to public funds on the part of publishers is generally referred to as “double-dipping”. When negotiating with publishers (about individual subscriptions, for example, or regarding national licences and consortium models), public institutions usually press for measures to counteract double-dipping, for instance by means of a pro-rata reduction of subscription costs (corresponding to the share of OA articles in the total number of articles). As yet, there is no sign of any models that solve the problem in an effective and transparent way. Other reservations regarding hybrid models relate, for example, to the fact that they do not contribute to transforming the scientific and scholarly publication market to OA; that cost calculations are not transparent; and that individual OA articles published in closed-access journals do not achieve sufficient visibility.

Financing by institutions

Business models that are based on direct payments by authors involve a large administrative burden. Hence, there is interest in models aimed directly at institutions. Here, one can distinguish between models where institutions bear the costs of publication on behalf of “their” authors, and models where institutions finance a particular model completely (so that other authors also benefit from it).

Models where costs are borne by institutions on behalf of their authors include the aforementioned publication funds and other ways of defraying individual costs. However, there are also business models that do not relate to individual articles or books but rather to the overall financing of publication venues.

A variant with a long tradition is the (part-)financing of publications by scholarly societies, professional associations, or other institutions of a scientific or scholarly community. Some scholarly societies or professional associations traditionally finance their publishing activities out of membership fees. Because, as a rule, the scholars and scientists who are members of these organisations are both readers and authors of the scientific and scholarly articles published there, the costs of the OA publication are shared between both groups.

One example of a journal that is financed by a scientific community is Documenta Mathematica, which was founded by the German Mathematical Society (Deutsche Mathematikervereinigung; DMV). The journal is published electronically in OA and is also available as a print edition for a small fee. According to the DMV, the costs involved are low and they are paid by the society itself. A further example is the Journal für Psychologie, which is financed by a scholarly society.

Ultimately, many OA journals rely on the collaboration of the persons involved – be they employees or volunteers. Support provided by institutional personnel, or the payment of material costs by an institution, can be regarded as an important form of institutional support.

Moreover, nowadays many scientific and scholarly institutions invest in their own publication services, for example platforms for publishing journals and books, repositories, or a university press. The institution then subsidises the costs of making the content publicly available, and, where applicable, is responsible for parts of the publication process.

One (major) example of the complete financing of an important infrastructure by institutions is the business model used by arXiv. In order to ensure the sustainability of the project, Cornell University, which has operated and maintained the e-print repository since 2010, developed a new business model based on international collaboration. The Membership Program, which was published in 2012, provides for the payment of an arXiv membership fee by the top 200 institutions in the world (identified on the basis of the number on institutional downloads). In return, members receive benefits such as the right to vote or to stand as a candidate for the Member Advisory Board. In addition to the Member Advisory Board (which represents the paying members), the Scientific Advisory Board (which represents the scientists) advises Cornell University Library on arXiv. The starting point for the collaborative business model was the fact that the Simons Foundation agreed to provide a matching gift of up to US$300,000 per year in the years 2013 through 2017 (and optionally for a further five years) on condition that the international community participated in the financing and governance of arXiv. The arXiv Membership Program thus combines the community and institutional approaches to financing a disciplinary repository that is considered to be an indispensable information platform for the astronomy, chemistry, computer science, mathematics, and physics communities, and that must remain cost-free for readers and authors. Germany’s share of arXiv’s costs is borne by the Max Planck Society (MPG), the Helmholtz Association (HGF), and the German National Library of Science and Technology (TIB) on behalf of the Netzwerk arXiv-DH.

The SCOAP³ – Sponsoring Consortium for Open Access Publishing in Particle Physics project somewhat cuts across the schematic distinction. The consortium pays the APCs for OA articles in some high-energy physics journals. Within the framework of the project, some of these journals have been converted to purely OA journals or have introduced a hybrid OA option. All authors, irrespective of their institutional membership, benefit from the defrayal of costs; the APCs charged by the SCOAP³ journals are sometimes lower than those of comparable journals; and the subscription fees charged by the hybrid journals in the portfolio are being reduced in order to prevent double-dipping. However, a central element of the SCOAP³ model is always the individual APC rather than the overall financing of a publication venue. Whether such a model is sustainable, and whether it is transferable in detail to other fields, is currently unclear.

Other financing possibilities

Another possibility of financing OA publications is the parallel sale of the contents in a separate edition. In the area of book publishing, this involves, as a rule, the sale of a print version and the parallel publication of an (at least) free-of-charge digital version either as a standard offering on the part of the publisher or as a variant pushed through as an exception by the author. In the digital field, various attempts are being been made to implement so-called “freemium models”, where the paid-for version has greater functionalities than the free-of-charge version. For example, in parallel with the HTML version of an article made available free of charge to all internet users, a PDF version, which is considered to be a superior file format, is made accessible only to paying customers. A well-known example of this is the OpenEdition Freemium Programme in the humanities and social sciences.

In the field of scholarly and scientific books, a number of other business models are being tried out. These include two more well-known examples: Knowledge Unlatched, where participating libraries collectively fund the so-called “first copy costs” of producing OA books, and, which retrospectively provides OA to closed-access books (which is comparable to hybrid journals).

Many OA models that are based on financing the infrastructure and production, rather than on the subsequent sale of individual copies or subscriptions, benefit from the very low costs of producing and distributing copies once the first copy costs have been financed.

Transformation and transparency

The transformation of a scholarly journal landscape shaped by subscriptions into a landscape that is oriented mainly towards OA is a major challenge in the area of business models. While it appears to be possible to completely convert journals to OA and to operate on a cost-covering basis, the high amounts charged under the author-pays model may lead to an increase in costs for science and scholarship as a whole. Therefore, special attention should be paid to financing models and practices where both the costs and their development and the quid pro quo received by the authors and science and scholarship as a whole are made transparent. Corresponding financing-related initiatives on the part of the Wellcome Trust and Jisc have already inspired a similar initiative in Germany. ESAC (Efficiency and Standards for Article Charges) is an initiative devoted to managing APCs in an efficient and transparent way.

Links for further reading

  • Kaufman-Wills Group, LLC (2005). The facts about open access. A Study of the financial and non-financial effects of alternative business models for scholarly journals.
  • Deinzer, Gernot; Herb, Ulrich; Lützenkirchen, Frank; Peil, Vitali; Pieper, Dirk; Tullney, Marco; Jahn, Najko; (2014): Datasets on fee-based Open Access publishing across German Institutions. Bielefeld University. 10.4119/UNIBI/UB.2014.18