Donald King presents some interesting data in this month's D-Lib Magazine.
Based on King's data, my calculations for U.S. systemic annual savings from a full switch to open access via article processing fees can be conservatively estimated at $3.4 billion per year.
King argues for an open access system via article processing fees, fully paid by the federal government. It is noteworthy that King's estimate is that this would cost, in a worst-case scenario, an increase of less than 1% of what the U.S. federal government spends on research grants right now. King acknowledges the unlikelihood of this scenario. Average cost-per-article of $1,500 and $2,500 U.S. scenarios are employed; the additional cost for 100% funding of articles would be $427 million (at $1,500 per article) or $712 million (at $2,500 per article). King estimates that academic and special libraries could, together, save an estimate $4.1 billion per year.
While this particular scenario is unlikely, this analysis is a most welcome addition to the growing body of literature illustrating the substantial cost savings possible with a full shift to open access.
It is not clear whether King has factored in the existing page charges paid by U.S. federal funding agencies as a portion of grants; it seems reasonable to assume that these costs would disappear.
One reason this is a very conservative estimate is because the vast majority of OA publishers do not charge article processing fees; these journals may well have more efficient business models and/or alternative sources of revenue.
With respect to the model - federal government funding - as King points out, the money is there, in academic library budgets - along with expertise in negotiating and scholarly communication. The best bet for academic libraries to ensure that the savings go to emerging library priorities such as building and preserving digital collections, is to take the lead in the shifting economics from subscriptions to open access. This scenario is far more likely, and better for the libraries.
Full citation to King's article: King, D. W. (2010). An approach to open access author payment. D-Lib Magazine, 16(3/4) Retrieved from http://www.dlib.org/dlib/march10/king/03king.html.
This post is part of the Transitioning to Open Access series.