If a two sided market place is functioning well we would expect price sensitivity and market forces to drive efficiencies, using classic economic analysis we might conclude that google operates in a distorted marketplace where one side - the users - pay nothing, and google dominates attention to operate an effective monopoly on the other side - the advertiser side. Using a similar analysis look at what the consequences are for scholarly publishing where both side of the market place are the same people - authors and readers, and the commerical publisehrs are the intermediary. Take into account brand affinity for key journal titles, and provide an anlysis of what an economic view would be of scholarly publishing.
1 | Scholarly publishing as a two-sided (really “same-side”) platform • Platform sides: the very same community—researchers—appear as authors (supply the content) and readers (demand the content). • Intermediary: commercial publishers provide peer-review workflow, brand signalling and discovery infrastructure, setting prices for access (subscriptions or APCs) even though the marginal cost of a digital article is near-zero. • Cross-network effects: the more influential papers a journal attracts, the more readers it gets; the more readers it has, the more attractive it is to authors seeking citations and career credit. These reinforcing loops create high entry barriers and favour concentration. 
2 | Market structure & pricing dynamics
Feature Economic effect Evidence Industry concentration Big-Five publishers now control ≈ 61 % of all articles indexed in Web of Science (up from 52 % in 2018).  Inelastic demand Faculty insist libraries keep “must-have” titles; cancelling is politically costly, so average subscription prices still rise 5-6 % p.a. despite flat library budgets.  High operating margins Elsevier’s STM division regularly posts ~37 % margins and lifted 2024 operating profit to £3.2 bn—higher than most Big-Tech units.   Pay-to-publish shift Global APC spend almost tripled 2019 → 2023 (to $2.5 bn). Median APCs ≈ $2 k (gold OA) and ≈ $3.2 k (hybrid); Elsevier “transformative” deals impute ~ $3.4 k per paper.   
3 | Brand affinity and prestige economics • Reputational lock-in: Top-tier titles (Nature, Lancet, Science, Cell, etc.) confer career capital; authors will tolerate slow review cycles, high rejection rates and hefty APCs for the prestige premium.  • Brand extension as rent extraction: Publishers multiply spin-off titles (“Nature X”, “Cell Reports”) to monetise the parent brand and capture spill-over submissions.  • Multi-homing limits: An individual manuscript can appear in only one journal; authors therefore compete, not publishers. Readers/libraries must cover the full bundle, so bargaining power sits with publishers.
4 | Consequences of the distorted marketplace
Outcome Mechanism Dead-weight loss & access barriers Digital marginal cost ≈ 0, but subscriptions/APCs price many institutions and the public out, shrinking potential readership and slowing knowledge diffusion. Double payment by the public purse Researchers (often on public grants) supply content & peer review for free, while their institutions buy it back at monopoly prices. Publisher surplus, not innovation Super-normal profits reduce pressure to modernise peer-review or metadata infrastructure; consolidation continues via acquisitions. Open-access paradox APCs shift the bill to research funders and risk excluding unfunded scholars; transformative deals (e.g. University of California–Elsevier) divert subscription spend but cement incumbent dominance.  Regulatory & policy pushback National initiatives (Plan S deadlines, Australia’s open-access library proposal) and calls for “diamond OA” try to realign incentives and curb market power.  
5 | How a textbook economist would view it 1. Platform pricing: Publishers apply the classic two-sided-market playbook—zero (or negative) price to authors for submission time, extraction of high fees from the paying side (libraries or funders), now also charging the author side via APCs once prestige is established. 2. Network-effects barrier: Prestige journals enjoy steep first-mover advantages; new entrants struggle without an impact-factor signal even if they under-price. 3. Market failure: Because decision-makers (researchers) are insulated from prices paid (by libraries/grants), ordinary price signals cannot discipline the platform, enabling monopoly pricing and chronic excess returns. 4. Regulatory options: • Antitrust investigations into bundling and confidentiality clauses (already raised in the EU).  • Procurement consortia to raise counter-vailing buyer power. • Decoupling evaluation from venue (e.g., DORA principles) to erode prestige lock-in. • Public or mission-driven infrastructure (diamond OA, preprint servers, overlay journals) to restore competitive pressure.
6 | Bottom line
Scholarly publishing today fits the economic profile of a highly concentrated, two-sided platform with weak price discipline, reinforced by the career incentives around journal prestige. Classic market forces therefore fail to deliver efficiency: prices drift upward, access is rationed, and incumbents reap monopoly profits. Re-balancing the system likely requires institutional interventions—policy, procurement, and incentive reform—rather than expecting competitive forces to self-correct.
that is an interesitng perspective, given that the total cost of publihsing is about 2% of the overall cost of research, how would you design a marketplace that also allowed for raising significant capital to invest in infrastrucre, the current capitalistic model has enabled springer nature, elsveier and others to raise and deploy hunderds of millions of pounds in funding for developing the systen
Below is a sketch of a “next-gen scholarly-exchange” that keeps the cost of publishing around today’s ≈ 2 % of global R & D spend yet can still marshal — and transparently deploy — large pools of capital for infrastructure. Think of it as a platform-commons rather than a classical publisher.
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1 Why capital is needed and how big the gap really is
Item Current annual spend Comment Global R & D outlay (2023) ≈ US $ 2.75 trn  Baseline “100 %” STM journal & database revenues ≈ US $ 12–13 bn  ≈ 0.45 % of R & D Elsevier group tech spend US $ 1.9 bn yr⁻¹ (across RELX)  Shows scale a for-profit can finance Springer Nature recent refinancing € 2.5 bn credit line ahead of IPO  Debt markets happy to lend against subscription cash-flows Large open infrastructure budgets (benchmarks) arXiv FY 24 expenses US $ 6.8 m  ; OpenAlex five-year grant US $ 7.5 m  Orders of magnitude cheaper than commercial stacks
Take-away
Even 0.5 % of R & D (a quarter of today’s 2 %) yields ≈ US $ 13 bn per year — already the size of the whole STM market. So capital requirements are tractable; the real design problem is governance and incentive alignment.
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2 Design principles for a healthier marketplace
Principle Economic rationale Separate content certification from content hosting Breaks the prestige lock-in: authors can “multi-home” by getting their work certified by one or more evaluation services while it sits in a neutral repository. Open, modular service layers Any entity (start-up, university press, big publisher) can compete for well-defined workflow contracts (peer-review management, XML/HTML conversion, data stewardship). Competition happens inside the platform rather than between bundled giants. Transparent cost-plus pricing Each micro-service bids its cost plus capped margin; price signals become visible to funders and libraries. Long-term revenue pledges from funders & institutions Turns today’s volatile subscription budgets into predictable annuity streams that can back bond issuance. Prestige by performance metrics, not legacy brand Article- and author-level indicators (usage, replication badges, open-data compliance) replace journal impact factor as the career currency.
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3 How to raise serious capital without re-creating a monopoly
3.1 Open Infrastructure Fund (OIF) • Members: national research agencies, major private funders, library consortia. • Commitment: 0.15 % of their annual R & D expenditure paid into OIF for 10 years. At current R & D levels that’s ≈ US $ 4 bn yr⁻¹. • Bond programme: OIF issues AA-rated 10-year Scholarly Infrastructure Bonds. At a 4 % coupon, a US $ 4 bn annual revenue stream comfortably services ≈ US $ 30 bn in upfront capital, enough to build and continuously refresh global-scale platforms.
3.2 Marketplace mechanics 1. Universal deposit mandate: every funded paper goes to an insured, mirrored repository cluster (think “arXiv-scale but discipline-agnostic”). 2. Service auctions: • Quarterly reverse auctions for each workflow layer (editor assignment, peer review logistics, formatting, long-term preservation). • Winners sign 3-year framework contracts with transparent KPIs; poor performers are replaced in the next round. 3. Certification tokens: • Authors buy low-cost evaluation “tokens” (covered by grants) that can be spent on any certified review/overlay-journal provider. • Overlay providers compete on speed, selectivity and editorial reputation, not on exclusive access to content. 4. Brand portability: prestigious editorial boards can spin up an overlay quickly; their halo comes from the board’s curation, not from ownership of the content pipeline.
3.3 Additional revenue levers to attract private investors
Stream Why investors care Analytics & decision-support APIs (grant-portfolio dashboards, reproducibility scores) High-margin SaaS fees not subject to APC politics. Data-licensing tiers for pharma/tech Non-exclusive licences sold at commercial rates create growth upside while basic access stays free. Managed AI-training corpus with provenance tracking Growing demand for legally clear, well-annotated corpora makes this a premium product line.
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4 Governance & safeguards • Bicameral board: 50 % research-community seats (elected), 50 % funder/library seats; super-majority required for fee increases. • Open-source mandate: any code developed with OIF money released under permissive licence after 24 months. • Transfer pricing cap: internal service providers (including legacy publishers) must offer at or below their lowest external customer price. • Exit ramp: if commercial publisher X can truly deliver a workflow component cheaper & better, it can win the auction — but loses exclusivity and bundle leverage.
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5 Economic impact compared with status quo
Metric Today’s commercial oligopoly Proposed commons-market Effective market power Big Five control > 60 % of output No single integrator; competitive auctions every 3 yrs Capital formation Equity + private debt (e.g. € 2.5 bn Springer facility) Infrastructure bonds backed by public/funder pledges Price discovery Hidden in “Big Deal” bundles Transparent per-service bids; libraries see true unit costs Dead-weight loss High — access barriers, duplicate effort Low — universal free read & publish, marginal cost pricing Innovator entry Hard (must build full stack) Easy (plug a better tool into an open API) Long-run cost share of R & D ≈ 2 % and drifting upward Target < 1 % after amortising bond repayments
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6 What changes for each stakeholder? • Researchers – immediate open access, multiple competing venues for prestige, cash-free at the point of use. • Libraries/funders – swap unpredictable subscription negotiations for a predictable infrastructure levy with direct governance rights. • Private publishers & start-ups – can thrive as service vendors or overlay brands, but lose rent from captive bundles. • Public – barrier-free access; tax money no longer pays twice for the same research.
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Bottom line
A well-designed platform-commons financed by modest, predictable levies and backed by bond markets can raise Springer- or Elsevier-scale capital without handing perpetual monopoly rents to any one firm. The economics work because the underlying cost is tiny relative to global R & D, yet the social return on an open, interoperable infrastructure is enormous.
what is preventign the political will to make something like this happnen, how does one manage the fact that publishing is international, but access to things like bond markets require one central government to act as broker, and furthermore, the huge diversity of geogrpahincal needs supports a distributed systesm, e.g. other markets outside of publisning don't have central open structures as outlined in this proposal
Below is a candid look at why the political stars have not yet aligned for a global “open-scholarly-infrastructure” bond, and how the two biggest sticking-points you raised—international scope and the need for a distributed system—could be managed without recreating the very monopolies the sector hopes to escape.
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1 What is blocking the political will?
Friction Why it matters in practice Collective-action dilemma Each funder or ministry spends only a fraction of its R &D budget on publishing, so the personal payoff for any single actor is small while the coordination cost is high. Incumbent publishers exploit this by negotiating country-by-country “big deals.” Perverse incentives in tenure & grant review Researchers still earn career credit from where they publish, not how open it is. As long as Nature or Cell confer outsized prestige, the academic lobby presses libraries to keep paying the incumbents. Incumbent lobbying & switching risk Elsevier, Springer Nature and Wiley remind finance ministries that abandoning big deals could stall domestic research output. Few ministers want to risk a headline about “Government bungles access to cancer research.” Fragmented national budgets The cash needed to service a supra-national bond would come from thousands of mostly flat library or grant budgets, negotiated on annual cycles. No treasury wants to pledge a thirty-year annuity without clear domestic control of spend. Uneven global capacity Low- and middle-income countries fear being locked into a scheme they can’t afford or control; high-income countries fear free-riding if they shoulder most of the bill.
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2 “Who issues the bond?” — Financing options that don’t require a single state guarantor 1. Multilateral special-purpose vehicle (SPV) Blueprint: the Green Climate Fund or the vaccine-finance vehicle IFFIm. Mechanics: a not-for-profit SPV issues AA-rated bonds backed by legally binding forward-purchase agreements from a basket of funders (e.g. NSF, UKRI, Deutsche Forschungsgemeinschaft, Wellcome). Each commitment is domestic-law enforceable, so no one state carries the entire credit risk. 2. Quasi-sovereign anchor + “blended finance” Blueprint: the European Investment Bank’s digital-infrastructure window. Mechanics: the EU (or another regional bloc) provides a first-loss guarantee; philanthropic foundations add junior capital; private investors buy senior tranches. This raises the coupon slightly but avoids a global treaty. 3. Tokenised revenue-share notes Blueprint: World Bank’s “blockchain bonds.” Mechanics: participating institutions pre-pay five years of infrastructure fees and receive tradable tokens that amortise as services are consumed. This suits mission-driven investors but keeps the deal off government balance-sheets.
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3 Reconciling global reach with distributed needs
Publishing already operates via distributed, domain-specific communities; infrastructure can mirror that reality.
What stays central What stays (or becomes) local Core protocols & identifiers (DOIs, ORCID, metadata schema). Repository nodes in national clouds (e.g. India’s National Digital Library, Brazil’s SciELO). Governance charter (oversight board, open-source mandate). Editorial overlays: disciplinary societies or regional journals decide their own acceptance bars. Payment clearing house for service auctions. Value-add analytics tuned to local languages, grant codes, compliance rules.
The EU’s European Open Science Cloud already pilots such federated governance: a tripartite board (Commission, member states, research organisations) sets interoperability rules, but data stay on local infrastructures  .
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4 Precedents that show international, open structures can scale
Sector Institution Key design clue Internet governance ICANN Multistakeholder board, contracts fund operations; no single-state control. Cross-border payments SWIFT Member-owned cooperative; fees underwrite continuous platform upgrades. Particle physics CERN 23 member states guarantee contributions; hosts pan-EU bonds for capital projects. Open knowledge UNESCO Open-Science Recommendation 193 states adopted common principles in 2021—proof that normative consensus is achievable .
These entities show that where interests align, durable global bodies without hegemonic control are possible.
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5 How to build momentum despite the headwinds 1. Use existing policy levers. The U.S. OSTP memo mandates immediate public access by 2026 for all federally funded work; Europe and China have analogous goals  . Aligning compliance tooling is a low-risk first tranche for a shared infrastructure fund. 2. Flip “transformative” Big Deals into escrowed revenue streams. Plan S stops subsidising such deals after 2024 . Re-route that money—already earmarked in budgets—into the bond-service pool instead of renewing hybrid contracts. 3. Demonstrate early wins in one region. Germany’s Projekt DEAL showed that libraries will pool bargaining power when benefits are clear . A regional pilot issuing, say, a €500 m bond to federate repositories across the D-A-CH countries could prove the model before scaling. 4. Offer differentiated on-ramps for the Global South. Tiered fees, waived in-country hosting costs, and revenue-sharing on data-licensing help remove the “rich-country club” stigma. 5. Treat brand and evaluation as separate businesses. Let Nature, eLife or a brand-new African overlay journal compete for certification tokens; their prestige economics stay intact, but they no longer dictate the plumbing.
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Bottom line
Political gridlock stems less from technical hurdles than from misaligned incentives and the fear of bearing a disproportionate share of a global public good. Yet the financing question need not be hostage to a single sovereign: multilateral SPVs, blended-finance stacks, or tokenised pre-payments can all tap bond markets while preserving a distributed, culturally adaptive infrastructure. The ingredients—policy momentum (OSTP, UNESCO), regional pilots (EOSC, DEAL) and workable finance archetypes—already exist. What is missing is a coalition prepared to link these pieces and lock in pledges for a decade-plus horizon. Once even one region proves that model, the rest of the world has a template to copy rather than a leap into the unknown.