Watch This Multi-Billion-Dollar Industry Evaporate Overnight

Imagine an industry where a few companies make billions of dollars by exerting strict control over valuable information -- while paying the people who produce that information nothing at all.

That's the state of academic, scientific publishing today. And it's about to be blown wide open by much more open, Internet-based publishers.

This will unfold over the next few years. It will become a classic case study in technological disruption.

Academic journals are a multi-billion-dollar industry worldwide -- maybe $10 billion annually. It's dominated by a handful of publishers: Elsevier, with $3.2 billion in revenues in 2012, and Springer, with $1.1 billion in the same year.

Both companies boast margins in excess of 35 percent, thanks in part to their low cost of content production. Scientists who want to publish the results of their research submit their manuscripts to these publishers' journals (free); other scientists review those papers to assess their credibility and quality (free); and then the journals publish the papers, selling subscriptions to universities and corporations who need them (definitely not free).

Journal subscriptions are an enormous cost for academic libraries. As of 2012, Harvard University was spending $3.75 million annually on journal subscriptions. Other, less-well-funded libraries spend hundreds of thousands a year, and have had to drop many subscriptions because the costs are so high -- and rising.

"Right now it's very hard for anyone outside academia to read research, because it's so expensive," says Richard Price, the founder of Academia.edu, one of the online publishers that's seeking to disrupt this market. Instead of charging exorbitant subscription fees, Academia.edu provides access to its papers for free. All you need to do is register.

I talked to Price earlier this week, just as Academia.edu passed the 10 million user mark. Ten million is a lot, given that Price estimates there are only 17 million academic researchers affiliated with scholarly institutions worldwide. (That total includes grad students.) There's another large number of scientists who do academic research but for corporations, but nobody knows exactly how many.

Not every person registered on Academia.edu is an academic. Some are just interested lay people signing on to check out a single paper. Price says venture capitalist Marc Andreessen is one such user, having registered recently to do some research. Still, that's a big number relative to the available market.

There are other "open" publishers of academic papers, like the Public Library of Science, or PLOS, which has published 84,000 papers to date. Arxiv.org, which focuses on physics and hard sciences, has published 940,000 papers. Academia.edu has published 2.9 million. The numbers are not exactly comparable, though, since PLOS papers are peer-reviewed, while Arxiv.org and Academia.edu don't review their papers before publication, which lowers the barrier to entry significantly.

Taken together, these online publishers represent a significant threat to traditional journal publishers like Elsevier because they reach more people and cost nothing. The only remaining value that traditional publishers offer is the imprimatur they provide: The articles they publish have been peer-reviewed and are thus presumably more reliable.

But even that imprimatur is under attack. The "reproducibility crisis" in academic publishing refers to the fact that a huge proportion of published research, particularly in medical fields, is based on results that cannot be reproduced by other researchers. In one study, a tiny 6 percent of scientific findings in cancer research were reproducible. In my opinion, if their research isn't reproducible, then the other 94 percent is essentially worthless.

Price thinks he can address the issue by rethinking the peer-review system and having Academia.edu members review papers after publication. In this somewhat super-charged take on commenting, the most credible papers would get reviewed (and endorsed) by thousands of qualified scientists instead of just a handful. He acknowledges that the company hasn't quite cracked that nut yet, though.

Price also hasn't quite figured out how to make money from Academia.edu's millions of members and papers. He figures that once the site reinvents peer review, it can charge universities and corporations for access to the short list of most-credible papers in any given field. If Academia.edu publishes 60,000 papers on cancer treatment, knowing which 6,000 have received the most favorable ratings from qualified reviewers would be a valuable thing. But for now, that's just a dream.

Arxiv.org is similarly revenue-free: It's operated by Cornell University Library and supported by grants. PLOS is a nonprofit, with revenues of $38.8 million in 2012, primarily from publication fees charged to authors.

Indeed, Academia.edu, PLOS, and Arxiv.org are doing something remarkable: They're mounting a full-frontal assault on a multi-billion-dollar industry and replacing it with something that makes much, much less money.

They're far more efficient and fairer, and they vastly increase the openness and availability of research information. I believe this will be nothing but good for the human race in the long run. But I'm sure the executives of Elsevier, Springer, and others are weeping into their lattes as they watch this industry evaporate.

Maybe they can get together with newspaper executives to commiserate.

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Dylan Tweney is the editor-in-chief of VentureBeat. Read more about tech disruption on VB:

• Academia.edu slammed with takedown notices from journal publisher Elsevier
• Meet Academia.edu, a startup that wants to publish every science PDF online
• Techtainment is taking down Hollywood. Here’s what the disruption will bring
• Navy SEAL’s advice: Training is the way to deal with disruption

Top photo: St. Louis University, via Flickr