The global market for science, technology and medicine scholarly publishing has been described as inelastic. There is perhaps no better proof than the financial reports of the scholarly publishing industry for 2008. At a time of global economic crisis, two of Reed Elsevier's divisions just reported INCREASED PROFITS.
Together, Elsevier and LexisNexis together earned over $1.5 billion US in profit in 2008, according to Elsevier's 2008 Preliminary Results, available for download from the Elsevier website. Let me emphasize - this is PROFIT, not revenue.
Libraries - negotiating tip. What does a 33% profit mean? One way of looking at this: if Elsevier decreased prices 33% for all customers around the world, they would still be doing just fine, breaking even. If Elsevier decreased prices for all customers around the world by 20%, they would still be making an extremely healthy profit of 13%. Why not demand a 20% cut, and redirect the funds to support for open access?
2008 Elsevier Revenue: 1,700 million pounds sterling (over $2.4 billion US)
Adjusted operating profit: 538 pounds sterling (over $814 billion US)
Adjusted operating margin: 33%
Elsevier revenue was up 4%, profits, 11%
2008 LexisNexis Revenue: 1,950 million pounds sterling (close to $2.8 billion US)
Adjusted operating profit: £513 (735 million US)
Adjusted operating margin: 26%
LexisNexis revenue up 13% from previous year, profits up 18%
This post is part of the Essential Efficiencies series.