UK Government plans to make research funded by tax payers money to be made available for free online. It will be great for citizens but terrible news for medical journal’s publishers. Some of them may lose up to 60 percent of their profits, an analyst warns.

In July 2012, three UK education research councils and the European Commission announced stipulations that future medical research partly funded by taxpayers money must be made more open-access.

Berstein Research‘s Claudio Aspesi writes in a research note:

“It could drive the profitability of the journal business of Elsevier down by as much as 60%

“Elsevier journal revenues would be under significant threat because the article processing charges it would earn for many of its publications are unlikely to prove anywhere near what the company needs to be revenue neutral…

“We think the risk posed to the Elsevier business model is substantial. We believe investors are underestimating the disruption that both the EC and even the UK policies could pose to the business model of Elsevier…

“A collapse of the profitability of Elsevier would be catastrophic for Reed Elsevier.”

Do you think making research publications done by public money open-access will be good for scientific world or catastrophic for publishers?