Today’s issue of Nature includes a particularly damning news story about the financial troubles facing the Public Library of Science, a publisher of several prestigious open access journals. In the article, Nature describes PLoS’s difficulties and heavily stresses its continued reliance on philanthropic grants.

The Public Library of Science (PLoS), the flagship publisher for the open-access publishing movement, faces a looming financial crisis. An analysis of the company’s accounts, obtained by Nature, shows that the company falls far short of its stated goal of quickly breaking even. In an attempt to redress its finances, PLoS will next month hike the charge for publishing in its journals from US$1,500 per article to as much as $2,500….

But although PLoS Biology has achieved an impact factor of 14.7, a more than respectable score for a relatively new journal, an analysis of PLoS’s accounts shows that the financial side of the business looks less rosy. As a US non-profit charity, PLoS must file its annual accounts to the Internal Revenue Service. Nature consulted these via GuideStar.org, a database that contains information on 1.5 million US non-profit organizations.

The figures show that PLoS lost almost $1 million last year. Moreover, its total income from fees and advertising currently covers just 35% of its total costs. And although this income is increasing — from $0.75 million in 2003-04 to $0.9 million in 2004-05 — it lags far behind spending, which has soared from $1.5 million to around $5.5 million over the past three years….

“This demonstrates once again the fragility of the author-pays model,” says David Worlock, chairman of the London-based publishing consultancy Electronic Publishing Services. (Worlock has worked with a number of publishing companies including Nature Publishing Group.) “It’s a real giveaway if they are now saying that they will always need some philanthropic funding.”…

When PLoS launched, other publishers expressed scepticism over its sustainability, arguing that the $1,500 fee was unrealistically low for covering the costs of producing a high-quality journal. PLoS rejected this argument as coming from journals with a vested interest in maintaining the reader-pays status quo. It said the $1,500 figure was realistic and was based on a business plan thrashed out with publishing experts. “Four years further on, we know a lot more,” says Patterson.

It’s not surprising that the article’s tone is so harsh (and that its bias is readily apparent), since Nature and the other commercial publishers have resisted the open access movement, something that threatens to undermine their profit making ability. Although PLoS is still trying to get up off the ground and reach the break-even mark, it has only been publishing for less than three years, and it has largely been a success, with its flagship journal PLoS Biology already earning the impressive impact factor of 14.7.

Still, it’s worrying to see such a large gap between PLoS’s earnings and expenses, and it’s important that PLoS takes decisive action to address this situation, since all of academia’s eyes are watching every up and down of the tangible symbol of the open access movement.

PLoS began with incredibly ambitious goals. Although the idea of forming a successful open access publishing organization would have surely been intimidating enough, PLoS went a step further by trying to compete directly with the top scientific journals in various fields. So far the results have been positive, but there’s a long way to go to prove the staying power of open access.

PLoS has quite a bit working against it, and, unfortunately for PLoS, there’s little room for failure, as Nature’s response shows.