In July, three UK education research councils and the European Commission announced stipulations that future research partly funded by taxpayers – much of which is currently published through subscription journals – must be made more open-access. The UK government has labelled research “paywalls” “deeply unhealthy”, and wants to free up availability.

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.”

Reed Elsevier’s share price has gone on rising through the recent announcements due to healthy recent results…

Open-access models may be largely confined to the UK unless Europe forces member states to adopt similar policies. But, with the U.S. also planning similar moves, the publishers will need to adapt.

In May, science minister David Willets told journal publishers gathered at a Publishers Association conference:

“I realise this move to open access presents a challenge and opportunity for your industry, as you have historically received funding by charging for access to a publication,” Willetts told publishers.

“Nevertheless, that funding model is surely going to have to change … To try to preserve the old model is the wrong battle to fight. Look at how the music industry lost out by trying to criminalise a generation of young people for file sharing.”

Many researchers were already revolting against health and science journal publisher Reed Elsevier for selling bundles of journals containing their work, rather than individual journals, to libraries. Tens of thousands of people signed a petition.

Alongside Elsevier in the Reed Elsevier stable is Variety publisher RBI. Bernstein thinks Reed Elesvier, which aborted a planned RBI disposal during the worst of the downturn, should break itself up but that it is more likely to retain an RBI that continues to down-size itself.

Disclosure: Reed Elsevier is an investor in paidContent parent GigaOM through its Reed Ventures arm.

The answer: scientific research.

More specifically, large amounts of scientific work is funded by government agencies — yet the results end up hidden behind paywalls. Money from the public purse is used to pay academics to undertake investigation and write up the results, before academic journals take over copyright and sell access to the work for profit. Citizens are effectively being asked to pay twice for any information: first to fund the research, then to access it.

Over the last few years, a growing movement has been pointing out this illogical situation and campaigning for what’s known as “open access”: unfettered availability to research that’s funded by the public purse. And on Monday that movement appears to have won a significant victory, with the British government announcing that it would make open access a condition of any public funding in future.

Science minister David Willetts said in an announcement that the new system would be implemented by 2014, meaning that any research that uses public money could no longer be locked away.

“Removing paywalls that surround taxpayer funded research will have real economic and social benefits. It will allow academics and businesses to develop and commercialise their research more easily and herald a new era of academic discovery. This development will provide exciting new opportunities and keep the UK at the forefront of global research to drive innovation and growth.”

This may be one of the most significant victories for the open movement so far — and advocates will certainly be hoping that other governments, including the U.S., follow suit sooner rather than later.

It’s all part of a sea change happening in science towards openness, a move that’s taking place in large part because of the internet.

Just as the net has disrupted other industries, so it’s starting to make science more collaborative, more accessible and more democratic. My colleague Mathew Ingram has documented much of this conversation, and I’ve written about it before too, talking to startups like ResearchGate, which is trying to turn the stuffy world of research upside down by helping scientists collaborate.

And last year I covered the story of open science, talking about the work of Timothy Gowers, a mathematician at the University of Cambridge who has been one of the lightning rods for openness.

There are many interpretations of what open science means, with different motivations across different disciplines. Some are driven by the backlash against corporate-funded science, with its profit-driven research agenda. Others are internet radicals who take the “information wants to be free” slogan literally. Others want to make important discoveries more likely to happen. But for all their differences, the ambition remains roughly the same: to try and revolutionise the way research is performed by unlocking it and making it more public.

Gowers later led a boycott against the publisher Elsevier which drew in some 12,000 academics, who all objected to the company’s approach.

So, after all that, a victory — if a relatively small one.

Before anyone gets too excited, however, it’s also worth noting that this change is not without pain. As The Guardian notes, this process itself doesn’t come free — and may eat into already-strapped science budgets.

Though many academics will welcome the announcement, some scientists contacted by the Guardian were dismayed that the cost of the transition, which could reach £50m a year, must be covered by the existing science budget and that no new money would be found to fund the process. That could lead to less research and fewer valuable papers being published.

Disclosure: Reed Elsevier, the parent company of science publisher Elsevier, is an investor in GigaOmniMedia, the company that publishes GigaOM.

Scientist photograph copyright Shutterstock / damicoangie

The news will prove unpopular with academic publishers, which license and peer-review researchers’ work and charge libraries to make it available.

“As taxpayers put their money towards intellectual enquiry, they cannot be barred from then accessing it,” science minister David Willetts said in a speech to the Publishers Association on Wednesday (transcript).

“They should not be kept outside with their noses pressed to the window – whilst, inside, the academic community produces research in an exclusive space.”

A group led by Dame Janet Finch will shortly advise the government on how to accomplish Willett’s aims online. But Willetts revealed it is likely to moot a “green” option, which would see journal publishers granted a short exclusive window on publishing publicly-funded research, and a “gold” option, under which the research would be openly available from the start.

“I realise this move to open access presents a challenge and opportunity for your industry, as you have historically received funding by charging for access to a publication,” Willetts told publishers.

“Nevertheless, that funding model is surely going to have to change … To try to preserve the old model is the wrong battle to fight. Look at how the music industry lost out by trying to criminalise a generation of young people for file sharing.”

Many researchers were already revolting against health and science journal publisher Reed Elsevier for selling bundles of journals containing their work, rather than individual journals, to libraries. Over 11,000 people have signed a petition.

Wresting exclusivity away from journal publishers could destroy some of their business value.

The UK is currently creating a portal, Gateway To Research, to provide links to published publicly-funded research and some of the data sets which underpin them. Jimmy Wales is advising on format standards.

Willetts acknowledged journals provide an important peer-review role but revealed himself to be an apparent opponent of publishers charging for content online:

“Perhaps I might speak from the experience of writing my own book, The Pinch, on fairness between the generations.

“It was very frustrating to track down an article and then find it hidden behind a pay wall. That meant it was freely accessible to a professional in an academic institution, but not to me as an independent writer.

“That creates a barrier between the academic community and the rest of us, which is deeply unhealthy.”

The UK government is aligned with the European Commission, which has previously said it wants to see more free access to publicly-funded research and more open data, and claims the US Committee on Economic Development is moving in the same direction.

International consensus on the moves would be important else UK researchers could find themselves giving away their research to the world online whilst having to pay to access research from other countries, Willetts said.

Disclosure: Reed Elsevier Ventures is an investor in GigaOM, the publisher of paidContent.