The Demise of the Big Deal in Scholarly Publishing?
Posted on March 15, 2011 by kcarlson | No Comments
Claudio Aspesi — an analyst based at the sell-side research firm Sanford Bernstein — predicts a difficult future for Reed Elsevier, particularly for its scholarly journal business. He also predicts the demise of the Big Deal, the business model in which scholarly publishers sell access to multiple journals by means of a single electronic subscription.
In a report published last year Aspesi warned that a combination of the global financial crisis and the rise of the Open Access (OA) movement would impact negatively on the revenues of scholarly publishers. Yet, he said, Reed Elsevier appeared to be “in denial on the magnitude of the issue potentially affecting scientific publishing”.
A year later Aspesi appears even more gloomy. In his most recent report he has downgraded Reed Elsevier to “underperform”, and warns that the widely-used “Big Deal” arrangement, is becoming “unsustainable in the current funding environment.”
While the Big Deal may have worked well as a solution for over a decade, he says, we can expect to see research libraries start cancelling their contracts — a development that will “lead to revenue and earnings decline”.
Speaking to me last week Aspesi repeated his belief that Reed Elsevier is in denial. “[I]f management has a Plan B, they have certainly kept it under wraps, and everything they have said supports my current view that they are in denial”, he told me.
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