1 INTERNET AND FREE ACCESS TO SCHOLARLY PUBLICATIONS Jean­Philippe Rennard Grenoble Graduate School of Business Jp at rennard.org This is a draft version of a paper to be published in, Khosrow­Pour, M., Encyclopaedia of E­Commerce, E­Government and Mobile Commerce, IGR, 2006. Abstract: The mean price of scholarly journals is now three times higher than it was in the mid­1980s. In the meantime, the development of Internet and of informal exchanges between researchers progressively led to the Open Access Initiative which aims at freely disseminating scientific publications. This article introduces to the consequences of this evolution and presents the path toward a new economic model of scholarly publications. ``If I have seen further it is by standing upon the shoulders of giants.'' The famous statement of Sir Isaac Newton demonstrates that the progress of science relies on the dissemination of discoveries and scientific knowledge. Even though scientific progress is not strictly cumulative (Kuhn, 1970) information sharing is the heart of this progress. Nowadays, scientific knowledge is mainly spread through scholarly journals, that is, highly specialized journals where quality controls and certifications are achieved through peer­review. The first section of this article will present the specificity of the current economic model of scientific publications. The second section will introduce to the open access movement and to its emerging economic model. THE ECONOMIC MODEL OF SCIENTIFIC PUBLICATIONS The growing complexity of modern science induces a growing need of knowledge dissemination media. The number of academic journals is very difficult to estimate since the classification is not always accurate, but according to the ``Ulrich's International Periodicals Directory'' (http://www.ulrichsweb.com) there were about 164,000 scientific periodicals in 2001 in all disciplines (see Chart 1). 2 Chart 1: Number of periodicals published worldwide (`000s) 1998­2001 Source: Ulrich's International Periodicals Directory The largest publishers like Elsevier­Reed, Blackwell or Wiley own most of these journals. Over the last twenty years, commercial firms ---especially the largest ones--- have raised prices at a rate which cannot be justified by increase in cost or quality (McCabe, 2000). The evolution of the median cost of serials is summarized in Table 1; it is now three times higher than it was in the mid eighties. Table 1: Evolution of the Median Value of Serial Unit Cost, 1986­2003 Year Serial Unit Cost Annual percentage changes Cumulative percentage changes 1986 $ 89.77 N/A N/A 1988 $ 117.25 10.94% 30.60% 1990 $ 134.09 4.18% 49.36% 1992 $ 173.67 13.93% 93.46% 1994 $ 200.85 6.67% 123.72% 1996 $ 222.89 3.95% 148.28% 1998 $ 245.05 ­1.97% 172.96% 2000 $ 303.19 12.30% 237.73% 2001 $ 282.54 ­6.81% 214.72% 2002 $ 296.50 4.94% 230.27% 2003 $ 283.08 ­4.53% 215.32% Source: Association of Research Libraries 152 154 156 158 160 162 164 166 1998 1999 2000 2001 3 Former president of the University of California recently stated: ``University librarians are now being forced to work with faculty members to choose more of the publications they can do without.'' (Atkinson, 2003, p.1, original emphasis). As a consequence, Chart 2 shows that, in the USA, acquisition expenditures have tremendously grown and that part of the budgets had to be reallocated from monographs to journals. Chart 2: Monograph and Serial Costs in ARL Libraries, 1986­2003 Source : ARL Statistics 2002­2003. The rise of journals prices has a multiple origin, one of the most important being provisions to invest in electronic publications (Chartron & Salaun, 2000). Paradoxically, electronic publication, which should reduce costs, is one cause of cost increase. These provisions are nevertheless insufficient to explain the current prices. Elsevier­Reed gross­profit margin is estimated 32% (Wellen, 2004). Such ``Microsoft like'' margins are very unusual and demonstrate the inefficiency of the scientific publication market. There are four main reasons to this