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Journals do have a value, but not the value that Elsevier extracts out of them to the tune of billions of dollars a year in profits. Facilitating peer-review, b

Journals do have a value, but not the value that Elsevier extracts out of them to the tune of billions of dollars a year in profits. Facilitating peer-review, being selective, indexing content, archiving and copyediting does indeed cost money. If we had a world where there were a large number of people dealing with peer-review referee selection, managing correspondence for free, and copyediting for free we could easily not have any publishers at all, and no subscriptions or article processing charges. Currently locking people out of information that is often funded with public money is not good for society. So having a small publication charge that can be covered in research is a good compromise to keep this work going on. Now the reward system of publication with impact factors and citations is indeed also entirely broken but that is another issue. But there is a lot more work that is thought of in the publication process. Yes peer reviewers are not paid, but finding the right reviewers, dealing with conflicts of interest, getting them to respond, and corresponding is not free. It takes time. And time is money. The more selective a journal is, the more they have to reject so those papers cost you time without a finished product. All of this does not cost the money that Elsevier reaps but it is not free.

marcinzm 6y ago
>Journals do have a value, but not the value that Elsevier extracts out of them to the tune of billions of dollars a year in profits. Elsevier has a 37% profit margin which is insane.
- GoOnThenDoTell 6y ago
  That’s a lot smaller than I expected, means they’re spending a lot of money on something
  - owenversteeg 6y ago
    This isn't intended as personal criticism of your comment, but I've noticed that people with minimal experience in business often overestimate margins and don't entirely understand what they mean. A 37% margin is crazy high and truly exceptional; there are only a handful of businesses that profitable at scale. When you hear a 30%+ margin, think of businesses like Mastercard, that collect a percentage of most transactions that its 1B+ members conduct. Apple also has notoriously high margins for what they do, and theirs are at 18%. Most of the businesses people interact with in their daily life have low or even negative profit margins: Walmart 3%, restaurants ~2%, Uber -35%. All the storefronts are owned by commercial real estate groups (margins usually ~4%), gas stations are ~2%, travel, car dealerships, airlines etc are all very low margin. My personal gut feeling, when I see those very high margins, is that's it's a clear cut case of capitalism not working right. Occasionally margins are high because of innovation and the position is deserved, but not in most cases. Visa and Mastercard have long been in the top handful of most profitable businesses in the world, making basically all their money on interchange. As a result, if you want to accept payments in America, you're eating around 2.5% of the transaction cost right off the bat. You might think okay, but they provide something in return, right? Fraud protection and security and support and all these important things - what would we do without them, without paying that 2.5% tax? Turns out we'd do fine. The EU capped interchange for debit cards at 0.2% in 2015 and things have worked perfectly fine ever since. Other high margin businesses are clearly not benefitting the world (e.x. Philip Morris.) Patent trolls and Verisign are both fabulously profitable, and they add zero value. And even if you like those businesses, there's an even more compelling case for regulating away Elsevier in its entirety.
    - saagarjha 6y ago
      I believe Apple's margins have been a fairly consistent 38% for the last few years at least.
      - owenversteeg 6y ago
        I should have clarified - I was referring to net margin, not gross, as net margin is what you'd discuss in this context. While gross margin is useful in some industries, it isn't useful for many companies discussed on HN, and you can't compare gross margins across industries. When people say "Walmart has a thin profit margin", they're not referring to Walmart's ~25% gross margin, they're referring to their ~3% net margin. (Apple's net margin is ~18%, gross margin ~38%) If you're looking deeper into a business's financials, gross margin can be a useful metric, but for the layman gross margins are usually used for misleading purposes. For example, gross margins can be easily Tweeted to make the point that "this evil business is making money hand over fist by selling xyz", or to indicate that a business is doing better than it actually is (Uber and WeWork, for example, have positive gross margins.) If you want to know the number representing how much Walmart paid for that chair vs how much you paid, you want to know the "markup". Markup is the difference between the cost of something and the price it is sold for. Confusingly enough, this is represented in different ways in different industries: some represent it as a fixed amount, some as a percentage of the total cost, and some as a percentage of the selling price. If you buy widgets for $4 and sell them for $8, your markup is $4: either (8-4)/8 = 50% of selling price, or (8-4)/4 = 100% of cost. Markup as a percentage of cost can range from several hundreds of percent (luxury goods) to ~15% (grocery stores.) Restaurants usually mark up food around 60% and drinks around 75%-400% (markup 300% of cost = $6 beer that cost $1.50.) "Keystone" pricing is when the markup is equal to the cost (meaning the ring on sale for $10k cost them $5k) - and is common in many industries including the jewelry industry, although fancier jewelers charge far more and budget sources charge less. Car dealerships, funny enough, have a lower markup than people might expect, between 2 and 5% of cost for economy base-model cars and 15% for high end cars. You can add in a few more % when you start to additional features to the car. (Dealerships these days often make most of their money through financing, service, accessories, warranties, and selling used cars.) It's very interesting to see historically high markups evaporating with direct-to-consumer sites like Aliexpress. But I've rambled enough in this comment already :)
  - pessimizer 6y ago
    Executive salaries.
    - marcinzm 6y ago
      Do stock buy backs count as profits or are they taken out before that calculation?
  - dagw 6y ago
    Elsevier have a lot of businesses and services outside of journal publishing that they no doubt sink a lot of money into. I'm guessing they also see the writing on the wall for their old business model and are funneling a lot of cash into trying to find new, more future proof, revenue streams
- beardyw 6y ago
  I interviewed for a job at Elsevier near Camden Lock (London) years ago. I said the location was great if I decided to get a tattoo. Didn't get the job. Thank you Lord.
Mediterraneo10 6y ago
Do many Elsevier journals provide copyediting on the part of the corporation? Many of the big scholarly publishers today expect the burden of copyediting and even typesetting to fall on the author or unpaid editors, and then the unpaid authors or editors are expected to provide camera-ready output to the publisher.
im3w1l 6y ago
My fear is that after the big for profit journals are smashed, they will be replaced by ideologues working for pennies because of the influence they get to wield. A few billions is a small price to pay imo.
emidln 6y ago
> Facilitating peer-review, being selective, indexing content, archiving and copyediting does indeed cost money. Sci-Hub and arXiv both manage to be useful without peer-review (not everything these sites host is a pirate copy of a paywalled work), without being selective, and without copy editing. They archive and index, and each seems to do it much more cheaply than Elsevier.
- specialp 6y ago
  I agree arXiv and Sci-Hub are useful. In the case of arXiv it does indeed cost money to run but not much as they are taking in PDFs and storing them without review, copy editing or curation. And that is fine. But arXiv has not replaced journals still. Getting work disseminated has not been an issue since the dawn of the internet. And that is not expensive either. The service Elsevier provides albeit at a high margin and predatory business tactics is more than just archiving and displaying a PDF. And Sci-Hub is stealing the extra value they provide by curation, and peer review facilitation. We might agree with it since they aren't a nice company but the costs of copy editing, curating and reviewing those papers is not being done by Sci-Hub they are just doing the cheapest part of the process by being a repository for paywalled papers. They aren't being more efficient publishers by getting the value add part for free. Someone has to pay for that part. And if Sci-Hub just hosted non pirated work that was not reviewed or copy-edited it would be just as laudable as arXiv.
tchalla 6y ago
> Facilitating peer-review, being selective, indexing content, archiving and copyediting does indeed cost money. Publishers only archive and index. The rest is done for free by scientists.
- specialp 6y ago
  If that was true we would not have any physics journals and many math journals. We'd just have people peer reviewing arXiv. Peer review is a lot more complicated than people think to find the right reviewers, minimize conflicts of interest, prodding reviewers, reviewing their reports. Also having editors read submissions first to see if it is even worth sending to peer review. This costs money and is not free. And it is why we have not seen a free model of this supplant journals. This could be done not for profit or government funded (disclosure I work for a non-profit journal publisher) almost none of the expenses of publication are taking in a PDF, archiving it and paywalling it. The expenses are in review, curation and copy editing. For us this expense is millions of dollars a year and is public information. We already have a free tier of publication in repositories like arXiv. There is still value in curation, selection and facilitating peer review and that cost is non zero. The PhD scientists we have reviewing your papers, dealing with correspondence and selecting referees for further review are indeed not working for free. If there were a lot of people that wanted to spend a lot of time a day doing that we would not have to pay publishers for anything.
  - lokar 6y ago
    IME, the publisher provides extremely limited support to the academics who do this work (filter/select papers, recruit reviewers, organize reviews, etc). The professors involved are generally doing it as a public service to their field. The publisher provides modest amount of support and support staff, totally out of proportion to what they then charge for access.
  - tchalla 6y ago
    > This costs money and is not free I have been a reviewer at Elsevier, Science and many of this journals for a better of the decade. I personally know the editors of many journals including IEEE, ACM, Elsevier, Science etc. They don't get paid for their time. So yeah, the scientists voluntarily review for free. Most journals only archive and index, they do not do anything more than it.

marcinzm 6y ago

>Journals do have a value, but not the value that Elsevier extracts out of them to the tune of billions of dollars a year in profits. Elsevier has a 37% profit margin which is insane.

GoOnThenDoTell 6y ago
That’s a lot smaller than I expected, means they’re spending a lot of money on something
- owenversteeg 6y ago
  This isn't intended as personal criticism of your comment, but I've noticed that people with minimal experience in business often overestimate margins and don't entirely understand what they mean. A 37% margin is crazy high and truly exceptional; there are only a handful of businesses that profitable at scale. When you hear a 30%+ margin, think of businesses like Mastercard, that collect a percentage of most transactions that its 1B+ members conduct. Apple also has notoriously high margins for what they do, and theirs are at 18%. Most of the businesses people interact with in their daily life have low or even negative profit margins: Walmart 3%, restaurants ~2%, Uber -35%. All the storefronts are owned by commercial real estate groups (margins usually ~4%), gas stations are ~2%, travel, car dealerships, airlines etc are all very low margin. My personal gut feeling, when I see those very high margins, is that's it's a clear cut case of capitalism not working right. Occasionally margins are high because of innovation and the position is deserved, but not in most cases. Visa and Mastercard have long been in the top handful of most profitable businesses in the world, making basically all their money on interchange. As a result, if you want to accept payments in America, you're eating around 2.5% of the transaction cost right off the bat. You might think okay, but they provide something in return, right? Fraud protection and security and support and all these important things - what would we do without them, without paying that 2.5% tax? Turns out we'd do fine. The EU capped interchange for debit cards at 0.2% in 2015 and things have worked perfectly fine ever since. Other high margin businesses are clearly not benefitting the world (e.x. Philip Morris.) Patent trolls and Verisign are both fabulously profitable, and they add zero value. And even if you like those businesses, there's an even more compelling case for regulating away Elsevier in its entirety.
  - saagarjha 6y ago
    I believe Apple's margins have been a fairly consistent 38% for the last few years at least.
    - owenversteeg 6y ago
      I should have clarified - I was referring to net margin, not gross, as net margin is what you'd discuss in this context. While gross margin is useful in some industries, it isn't useful for many companies discussed on HN, and you can't compare gross margins across industries. When people say "Walmart has a thin profit margin", they're not referring to Walmart's ~25% gross margin, they're referring to their ~3% net margin. (Apple's net margin is ~18%, gross margin ~38%) If you're looking deeper into a business's financials, gross margin can be a useful metric, but for the layman gross margins are usually used for misleading purposes. For example, gross margins can be easily Tweeted to make the point that "this evil business is making money hand over fist by selling xyz", or to indicate that a business is doing better than it actually is (Uber and WeWork, for example, have positive gross margins.) If you want to know the number representing how much Walmart paid for that chair vs how much you paid, you want to know the "markup". Markup is the difference between the cost of something and the price it is sold for. Confusingly enough, this is represented in different ways in different industries: some represent it as a fixed amount, some as a percentage of the total cost, and some as a percentage of the selling price. If you buy widgets for $4 and sell them for $8, your markup is $4: either (8-4)/8 = 50% of selling price, or (8-4)/4 = 100% of cost. Markup as a percentage of cost can range from several hundreds of percent (luxury goods) to ~15% (grocery stores.) Restaurants usually mark up food around 60% and drinks around 75%-400% (markup 300% of cost = $6 beer that cost $1.50.) "Keystone" pricing is when the markup is equal to the cost (meaning the ring on sale for $10k cost them $5k) - and is common in many industries including the jewelry industry, although fancier jewelers charge far more and budget sources charge less. Car dealerships, funny enough, have a lower markup than people might expect, between 2 and 5% of cost for economy base-model cars and 15% for high end cars. You can add in a few more % when you start to additional features to the car. (Dealerships these days often make most of their money through financing, service, accessories, warranties, and selling used cars.) It's very interesting to see historically high markups evaporating with direct-to-consumer sites like Aliexpress. But I've rambled enough in this comment already :)
- pessimizer 6y ago
  Executive salaries.
  - marcinzm 6y ago
    Do stock buy backs count as profits or are they taken out before that calculation?
- dagw 6y ago
  Elsevier have a lot of businesses and services outside of journal publishing that they no doubt sink a lot of money into. I'm guessing they also see the writing on the wall for their old business model and are funneling a lot of cash into trying to find new, more future proof, revenue streams
beardyw 6y ago
I interviewed for a job at Elsevier near Camden Lock (London) years ago. I said the location was great if I decided to get a tattoo. Didn't get the job. Thank you Lord.

Mediterraneo10 6y ago

Do many Elsevier journals provide copyediting on the part of the corporation? Many of the big scholarly publishers today expect the burden of copyediting and even typesetting to fall on the author or unpaid editors, and then the unpaid authors or editors are expected to provide camera-ready output to the publisher.

im3w1l 6y ago

My fear is that after the big for profit journals are smashed, they will be replaced by ideologues working for pennies because of the influence they get to wield. A few billions is a small price to pay imo.

emidln 6y ago

> Facilitating peer-review, being selective, indexing content, archiving and copyediting does indeed cost money. Sci-Hub and arXiv both manage to be useful without peer-review (not everything these sites host is a pirate copy of a paywalled work), without being selective, and without copy editing. They archive and index, and each seems to do it much more cheaply than Elsevier.

specialp 6y ago
I agree arXiv and Sci-Hub are useful. In the case of arXiv it does indeed cost money to run but not much as they are taking in PDFs and storing them without review, copy editing or curation. And that is fine. But arXiv has not replaced journals still. Getting work disseminated has not been an issue since the dawn of the internet. And that is not expensive either. The service Elsevier provides albeit at a high margin and predatory business tactics is more than just archiving and displaying a PDF. And Sci-Hub is stealing the extra value they provide by curation, and peer review facilitation. We might agree with it since they aren't a nice company but the costs of copy editing, curating and reviewing those papers is not being done by Sci-Hub they are just doing the cheapest part of the process by being a repository for paywalled papers. They aren't being more efficient publishers by getting the value add part for free. Someone has to pay for that part. And if Sci-Hub just hosted non pirated work that was not reviewed or copy-edited it would be just as laudable as arXiv.

tchalla 6y ago

> Facilitating peer-review, being selective, indexing content, archiving and copyediting does indeed cost money. Publishers only archive and index. The rest is done for free by scientists.

specialp 6y ago
If that was true we would not have any physics journals and many math journals. We'd just have people peer reviewing arXiv. Peer review is a lot more complicated than people think to find the right reviewers, minimize conflicts of interest, prodding reviewers, reviewing their reports. Also having editors read submissions first to see if it is even worth sending to peer review. This costs money and is not free. And it is why we have not seen a free model of this supplant journals. This could be done not for profit or government funded (disclosure I work for a non-profit journal publisher) almost none of the expenses of publication are taking in a PDF, archiving it and paywalling it. The expenses are in review, curation and copy editing. For us this expense is millions of dollars a year and is public information. We already have a free tier of publication in repositories like arXiv. There is still value in curation, selection and facilitating peer review and that cost is non zero. The PhD scientists we have reviewing your papers, dealing with correspondence and selecting referees for further review are indeed not working for free. If there were a lot of people that wanted to spend a lot of time a day doing that we would not have to pay publishers for anything.
- lokar 6y ago
  IME, the publisher provides extremely limited support to the academics who do this work (filter/select papers, recruit reviewers, organize reviews, etc). The professors involved are generally doing it as a public service to their field. The publisher provides modest amount of support and support staff, totally out of proportion to what they then charge for access.
- tchalla 6y ago
  > This costs money and is not free I have been a reviewer at Elsevier, Science and many of this journals for a better of the decade. I personally know the editors of many journals including IEEE, ACM, Elsevier, Science etc. They don't get paid for their time. So yeah, the scientists voluntarily review for free. Most journals only archive and index, they do not do anything more than it.